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Mrs Theresa Villiers (Chipping Barnet) (Con)
Stephen Hammond (Wimbledon) (Con)
The Secretary of State for Exiting the European Union (Mr David Davis)
The Chancellor and I are both determined to ensure we get the best possible deal for our financial services sector—a crucial part of our economy—and not just for the City of London but for the country more widely. Two thirds of financial services jobs are outside the capital, including 150,000 in Scotland. We are determined to ensure that this UK-wide industry continues to thrive. The Chancellor and I have met to discuss this, and, as one would expect, agree that financial services will be of great importance in these negotiations, that we must remain in a position to attract the brightest and the best in the global battle for talent, and that we will seek the best possible terms of trade for our financial services in the European market. We are also working together to maximise opportunities for financial services arising from our exit from the European Union. We have already met representatives of the financial services industry and expect to do so again as we shape our negotiating position.
Mrs Villiers
Will my right hon. Friend make securing agreement on a transitional period for financial services an urgent priority for Brexit negotiations to avoid the risk that firms feel they have to start making decisions to change their businesses now based on a worst-case scenario because compliance obligations mean that they cannot wait to see what the final deal will look like?
Mr Davis
We are seeking to ensure a smooth and orderly exit from the European Union, and it would not be in the interests of either side—Britain or the European Union—to see disruption. To that end, we are examining all possible options, as one would expect. We are approaching these negotiations in good faith and with good will towards our negotiating partners—we hope the same applies in reverse—focused on the mutual interests of the UK and the EU, including financial stability. I would say that having London as the No. 1 global financial centre sitting at the heart of the global capital markets is not just in the UK’s interest but in the European Union’s interest. I am confident that everyone will see the value of not undermining that.
Stephen Hammond
In his answer to my right hon. Friend the Member for Chipping Barnet (Mrs Villiers), the Secretary of State talked about all possible options. Yesterday in the Treasury Committee, I asked the Chancellor whether he accepted the likely need for transitional arrangements. Has my right hon. Friend met regulators to discuss systemic risk, and major financial institutions to discuss loss of business, if those transitional arrangements are not put in place?
Hilary Benn (Leeds Central) (Lab)
We look forward to hearing from the Secretary of State once the new Select Committee has been established. May I press him on transitional arrangements, which are absolutely fundamental to the task in hand? He will be only too well aware that uncertainty about our future trading relationships, including for the financial services industry, is the major concern of business. Can he give the House an assurance that if we have not been able to negotiate a new trade and market access agreement with the European Union by the end of the article 50 process, the Government will seek a transitional arrangement, because if they do not say that now the business uncertainty will continue, and businesses may begin to take decisions because they do not know what the future holds?
Mr Davis
I congratulate the right hon. Gentleman on his new post. I am very pleased that he is the Chairman of the Brexit Committee, and look forward to a great deal of discussion with him on these subjects. He is quite right—we have to treat as absolutely central to what we do maintaining the stability of the City but also of the European financial markets, which have been a little fragile over the past few years. We will therefore do anything necessary. In the financial sector, as in other sectors, at the point of exit from the European Union, all the standards, conventions and regulations will be identical, so the transition should be capable of being managed very clinically. We will do everything necessary to maintain that stability.
Mr Pat McFadden (Wolverhampton South East) (Lab)
Can the Secretary of State confirm, in relation to press reports earlier this week, that the Government may in future pay the European Union, in some form or another, for access for financial services? Is it the Government’s position that under no circumstances will they in future pay for market access for financial services?
Mr Davis
I do not comment on leaks. I am not going to comment on that newspaper report or, indeed, on its veracity or otherwise. On the accountability of Government activity, I said during last week’s debate that I want to be as accountable and open as possible with the House of Commons, but the Labour party accepted enthusiastically the amendment to the motion, which said that we would do nothing to undermine or prejudge our negotiating position, and that is what we will do.
Mr Philip Hollobone (Kettering) (Con)
Rather disgracefully, the Treasury did its best to play a prominent role in the remain campaign, including the release of a highly dodgy dossier predicting economic doom and gloom. Is my right hon. Friend confident that the Treasury has now caught up with the result of the referendum and that it is singing from the same page as his Department?
Mr Davis
I am afraid that I do not agree with my hon. Friend. The simple truth is that the Treasury is looking at all the options, just as we are. Forecasts of the sorts that he described are contingent entirely on the assumptions that are put under them. If a lot of deleterious assumptions are made, they will result in a deleterious outcome. If serious policies are introduced to correct any of the risks and maximise the opportunities, they will result in a very much better outcome, and that is what we will do.
Ms Tasmina Ahmed-Sheikh (Ochil and South Perthshire) (SNP)
The Secretary of State has said that he does not want to discuss leaks, but it is important that we get factual information out there. According to the Financial Times, the Government are to spend billions on keeping the City of London in the single market. Will the Secretary of State confirm what steps he is taking to ensure that the people of Scotland get a similar deal?
Mr Davis
As I have said, I do not comment on leaks, but what I will say is this: I said at the beginning that a very large number of financial services jobs are outside London and many of them are concentrated in Scotland. It has been a fundamental part of Scotland’s advantage down the years to have strong financial services, and we will do every bit as much to protect Scotland as we will to protect London.
Stephen Timms (East Ham) (Lab)
Tens of thousands of jobs in Britain depend on euro-denominated clearing. The United States has secured equivalence for its clearing houses. How confident is the Secretary of State that euro-denominated clearing will be permitted in the UK after we have left the European Union?
Mr Davis
The right hon. Gentleman identifies a very important point, as I would expect from him, and that is certainly one of our major aims. I reiterate the point that I made to the new Chairman of the Brexit Committee: we start at the point we leave with absolute equivalence, because we meet all of the requirements at that point, and I would seek to ensure that that was maintained.
Keir Starmer (Holborn and St Pancras) (Lab)
The discussions on financial services are intended, as I understand it, to build consensus on the Government’s plans. Eight days ago, the Government gave a clear commitment from the Dispatch Box that
“there should be a transparent debate on the Government’s plans for leaving the EU”.—[Official Report, 12 October 2016; Vol. 615, c. 414.]
Yesterday I wrote to the Secretary of State to ask a very simple question: when will the plans be made available? That is an important question because we need time to debate and scrutinise the plans before article 50 is invoked, and no doubt the new Brexit Committee will want to see them. The Secretary of State replied promptly to my letter, but failed to answer that central question, so I ask him again: when will the Government plans for leaving the EU be made available to this House?
Mr Davis
I could not have been clearer that I consider engagement with Parliament on the process of exiting the EU to be of paramount importance. That was the whole thrust of my speech in last week’s debate and of everything I said previously to various Select Committees and to the House. That is why I supported the Opposition’s motion last week that
“there should be a full and transparent debate on the Government’s plan for leaving the EU”.
That was the hon. and learned Gentleman’s wording.
It has always been our intention that Parliament should be engaged throughout. However, the House also agreed a vital caveat that such a process must respect
“the decision of the people of the UK when they voted to leave the EU on 23 June and does not undermine the negotiating position of the Government”.
There will be a balance to be struck between transparency and good negotiating practice, and I am confident that we can strike that balance. Over the course of the coming—[Interruption.] Whether it is six months or less, I do not know, but over the course of the coming period before the triggering of article 50, much information will be put out and I think that the House will be in no doubt about our aims and strategic objectives.
Keir Starmer
The question was: when will the plans be made available? For the second time, it has not been answered. The plans are important not only so that this House can hold the Government to account, but so that some certainty can be provided. There has been so much evidence of uncertainty. I met representatives of the Council, Commission and Parliament in Brussels yesterday, and it is absolutely clear that the Prime Minister’s words about Brexit at her party conference have been widely interpreted as an indication that she wants the UK to leave not just the single market, but the customs union. I have no doubt that that will come up in her discussions in Brussels this evening, but will the Secretary of State assure the House that that is not the Government’s starting position for the article 50 negotiations?
Mr Davis
Actually, it is a good example of the reason why we are taking our time to come to a conclusion on this. [Laughter.] No, these matters have serious implications, whichever way we go with them. Being inside the customs union gives some advantages but cuts off, to some extent, free trade areas around the rest of the world. Being outside the customs union creates some handicaps but opens up those other benefits. That decision is not part of what the Prime Minister has said to the European Union.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
The Secretary of State for Exiting the European Union (Mr David Davis)
The Government continue to undertake a wide range of analysis covering all parts of the UK to inform the UK’s position for the upcoming negotiation with the European partners. A key part of that understanding is the differences across the UK. The Welsh economy has particular strengths in aerospace, automotive, higher education, electronics, steel and agriculture, for example. It is important that we understand the impacts and the opportunities for all parts of the Welsh economy.
I visited Cardiff on Tuesday this week, when I met the First Minister and the Finance Minister, and I am grateful to them for giving me time on their Budget day. I also met university vice-chancellors in a separate meeting. Wales has a particular reliance on a range of EU funding—more so than much of the rest of the UK—on which the Chancellor has already offered a number of guarantees.
Jonathan Edwards
As the Secretary of State will be aware, the Welsh economy produces a substantial trade surplus of more than £5 billion per annum as a result of our membership of the single market, the customs union and the associated 53 international global trade deals. The UK as a whole, on the other hand, has a massive deficit of nearly £120 billion. Does the Secretary of State acknowledge, therefore, that the Government’s favoured policy of leaving the single market, the customs union and the associated 53 international global trade deals—a hard Brexit—will have a significant effect on Wales?
Mr Nigel Evans (Ribble Valley) (Con)
Many businesses in Wales are wondering how EU directives that have been signed but not yet enacted—some may not be enacted until 2017 or 2018—will impact on them. At what stage will the Government say that directives are no longer applicable in the UK?
Mr Davis
My hon. Friend makes an important point, which goes to the heart of the previous question about maintaining stability and confidence. We have said in terms that the great repeal Act will put into domestic law all the acquis as it exists at the point at which we depart. Everything that is in European law at that point goes into British law.
Nick Smith (Blaenau Gwent) (Lab)
In Blaenau Gwent, the successful dips company Zorba Foods faces a bigger bill for bringing its ingredients into the country. With petrol prices going up, the falling pound is making every step of the journey to the dinner plate much more expensive. What are the Government doing to help businesses that are faced with a steep increase in costs and families who are faced with higher food bills?
Mr Davis
It is not the place of the Government to judge what is the right and wrong exchange rate. The hon. Gentleman is quite right to say that the exchange rate has gone down quite notably, but that gives both advantages and disadvantages. It has already changed, for example, the success of various industries in exports and some other domestic industries. We hope—more than that, we intend—that the balance will work out to everybody’s advantage in the long run.
Mrs Cheryl Gillan (Chesham and Amersham) (Con)
Yesterday, I was delighted to hear the Under-Secretary of State for Wales confirm that the Treasury will underwrite the approximately £110 million that is due to come from the EU regional development fund for the electrification of the valleys lines in Wales if that money has not come through before we exit the European Union. In his discussions with the First Minister, was the Secretary of State able to give him greater clarity about all the funds that come into Wales from the EU? Businesses require that stable background against which to operate.
Mr Davis
My right hon. Friend picks up on a very important point. Wales is more dependent on European funding at the moment than many other parts of the country. One of the set of things the Government have done to protect people from any instability is to underwrite very quickly—the Treasury undertook to do this in August—the existing structural funds. The Welsh Government were cognisant of that and welcomed it, particularly as they—as I said, I visited them on budget day—were able to make their budgets balance. From that point of view, the Government will continue to look at any areas where financial risk is induced as a result of our departure and the possible severance of EU funds as we leave.
Nigel Mills (Amber Valley) (Con)
Nigel Huddleston (Mid Worcestershire) (Con)
The Secretary of State for Exiting the European Union (Mr David Davis)
Since the referendum, the Government have met companies from every sector of the British economy, including tourism, to discuss the risks and opportunities. I believe that as we build an ever more outward-facing, agile economy, with firms trading more widely across the world, there is enormous potential for the UK to be an even better place to do business. We are meeting representatives of business regularly, and the detailed analysis shared with us by many of them is informing the preparations for the negotiations.
On tourism specifically, foreign visitors contribute £22 billion to our economy, and the industry as a whole supports some 1.6 million jobs. A record 3.8 million people visited the UK in July. My right hon. Friend the Culture Secretary has met industry leaders to discuss our exit from the EU, and we debated this matter in Westminster Hall last week. As the Prime Minister has said, we are confident our exit presents opportunities for growth in tourism, and we will work closely with the industry to realise this.
Nigel Mills
Businesses in Amber Valley say that what would help them most in deciding what investment to make in the coming years is some clarity about what our overall trading position with the EU will be. They are nervous that waiting two and a half years for that will not be helpful. When does the Secretary of State think they will be able to understand at least what the big picture will be?
Mr Davis
At the strategic level, businesses should be able to understand that very clearly now. We have some very clear strategic aims: we will respect the views of the British people—I know my hon. Friend campaigned on our side—to bring back control over our laws and bring back control of immigration; we will aim to maintain our consideration of security exactly as it is now; and on the market front, we are seeking the most open possible market with the European Union.
Nigel Huddleston
I thank the Secretary of State for his comments about engaging with the tourism industry. As he said, we are achieving record visitor numbers and record spend. To sustain this growth, should we investigate marketing the UK even more aggressively overseas, taking advantage of the weak pound, with increased budgets for VisitBritain, for example?
Mr Davis
I congratulate my hon. Friend on the excellent debate he held last week, and indeed on his excellent speech on this subject. He is right that the industry continues to thrive, with 3.8 million people visiting the UK. I am quite certain—I am sure he will look at Hansard later—that my right hon. Friend the Secretary of State for International Trade will take up his point about promoting Britain abroad as a place to visit.
Mr Ben Bradshaw (Exeter) (Lab)
Does the Secretary of State agree with the International Trade Secretary that we should leave the European customs union, or with the Business Secretary and the Chancellor that we should not do so?
Emma Reynolds (Wolverhampton North East) (Lab)
The Secretary of State talks about a smooth transition, but the truth is that businesses are concerned we will have to fall back on WTO rules. Our European partners have so far refused to say that they will enter trade talks alongside our article 50 negotiations. What will the Government and the Secretary of State do to avoid the cliff edge in March 2019, when we leave the EU, of our falling out of the EU single market and back on WTO rules?
Mr Davis
The hon. Lady says that our European partners have said that. Some of them have said it, but that was some time ago, and they are now starting to read what article 50 actually says. Article 50 implies that there will be parallel negotiations. That is what we will have because, as she quite rightly says, we need to conclude them within two years to avoid any cliff edge.
Lucy Frazer (South East Cambridgeshire) (Con)
Mr Davis
My hon. and learned Friend might remember that I said in my conference speech that to take part in the global competitive economy we have to win the global battle for talent, too. My task is to bring back to the UK the right to decide who can come to Britain; the Government’s task will be to exercise that right in the national interest. Clearly, it will not be in the national interest to restrict the movement of talent—the free movement of brainpower, as it were—so she can be confident that we will not be limiting highly intelligent, highly capable people’s access to universities.
Stephen Gethins (North East Fife) (SNP)
Will the Secretary of State tell us what assessment his or any other Department has made of the impact of leaving the EU on the economy, and when he will make that available to this House?
Mr Davis
We currently have in place an assessment of 51 sectors of the economy. We are looking at those one by one, but the aim at the end is that this will inform the negotiating approach so that no one gets hurt. Given the hon. Gentleman’s context, I should mention that we are also doing that assessment in a way that will throw up whether something has an impact on the individual nations of the United Kingdom, as well as on the UK as a whole.
Stephen Gethins
I obviously welcome that new information from the Secretary of State, but the Fraser of Allander Institute has already told us that this will cost up to 80,000 jobs in Scotland alone. The CBI, the British Chambers of Commerce and the Institute of Directors have warned about the impact of limiting freedom of movement. They have done their homework, Secretary of State. You did not do your homework during the Vote Leave campaign, when you had a blank piece of paper to campaign on. If the Secretary of State is going to Scotland, he will need to do better than that. When will that assessment be published?
Mr Speaker
I have always done my homework, and I strongly resent any suggestion to the contrary.
Mr Davis
I venture to suggest that if you did your homework, Mr Speaker, you would not have it marked by the hon. Gentleman.
I have not seen the Fraser of Allander report, so would be grateful if the hon. Gentleman directed me to it. One thing about these reports is that they all base themselves on single assumptions. We need to look at those assumptions to see whether they are realistic, and that is what we will do. There have been a large number of forecasts of the effect of Brexit. Some are very pessimistic about certain aspects of policy that we do not intend to allow to happen. I will look at that particular report carefully and talk to him about it after I have done so.
Matthew Pennycook (Greenwich and Woolwich) (Lab)
The US Chamber of Commerce, which represents companies with investments in the UK worth almost $600 billion, warned our ambassador in Washington last week that to retain and attract those investments in the years ahead we will require access to the single market. Will the Secretary of State tell the House whether he accepts the figure I have given and, if he does not, how much US business investment he thinks will be at risk if this Government do not secure access to the single market?
Mr Davis
One reason—although only one—why we are seeking to maintain the most open and barrier-free access possible to the European market is to encourage foreign direct investment. We have had discussions with a number of countries, including the US; indeed I met a US congressional delegation that came here whose members were very enthusiastic about Brexit. There are many views about this.
Wayne David (Caerphilly) (Lab)
The Minister of State, Department for Exiting the European Union (Mr David Jones)
The Chancellor has already announced that the Government will guarantee EU structural and investment funding signed before we leave the EU. In addition, when UK organisations bid directly and competitively for EU funding for projects, that funding will be guaranteed by the Treasury if the bids are won before our departure. Those guarantees will extend to 2020, effectively the end of this Parliament.
Wayne David
The Minister has quoted part of what the Chancellor said, but he also said that finance will be guaranteed to bidders
“whose projects meet UK priorities”.
Does that imply that the UK Government will try to change agreed priorities for EU expenditure?
Mr Jones
No. Over the coming months the Government will consult all interested parties—including the devolved Administrations, who clearly have an interest in this policy—to ensure that future funding commitments represent value for money and are in line with our strategic priorities.
Mr David Nuttall (Bury North) (Con)
Does my right hon. Friend agree that one great advantage of the UK leaving the EU is that it will give us greater flexibility over how we spend our regional aid, and that as we will no longer be paying as a net contributor to the EU, we will have more money to spend on these schemes?
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
Mike Wood (Dudley South) (Con)
Peter Grant (Glenrothes) (SNP)
The Parliamentary Under-Secretary of State for Exiting the European Union (Mr Robin Walker)
I congratulate my hon. Friend the Member for South Basildon and East Thurrock (Stephen Metcalfe) on his election as Chair of the Science and Technology Committee.
We had a very good debate on this matter yesterday and it was clear that Members on both sides of the House wanted to provide reassurance. The Government fully intend to protect the status of EU nationals already living here and the Prime Minister has been clear on that point. We expect UK citizens’ rights in other EU member states to be protected in return. I find it hard to imagine a scenario where, in negotiations, that is not the outcome. At every step of the negotiations, we will seek to ensure the best possible outcomes for the British people at home and overseas.
Stephen Metcalfe
To follow on from the question asked by my hon. and learned Friend the Member for South East Cambridgeshire (Lucy Frazer), the Government have made clear their desire to control the borders and the fact that free movement cannot continue as it is now. However, will my hon. Friend reiterate that a degree of free movement will be necessary to protect key areas of our economy such as science and technology, and in particular research collaboration?
Mr Walker
I absolutely recognise my hon. Friend’s point and the need to strike that balance. As the Secretary of State said in his conference speech, to which he has already referred, pulling out of the European Union does not mean pulling up the drawbridge. He said:
“We will always welcome those with the skills, the drive and the expertise to make our nation better still. If we are to win in the global marketplace, we must win the global battle for talent. Britain has always been one of the most tolerant and welcoming places on the face of the earth. It must and it will remain so.”
This is particularly true in areas such as science and technology. The UK is a science superpower and we intend to make sure it stays that way.
Mr Walker
My hon. Friend raises an important point. Clearly, this is something that we will want to secure in the negotiations. We are working on the basis that what is fair to UK citizens in the EU should also be fair to EU citizens in the UK. We will certainly be looking to protect the interests of British pensioners as we go through this process.
Peter Grant
The most recent census indicates that 1,588 of my constituents were born in other EU countries. From personal experience, I know that they include doctors, dentists, teachers, nurses, home care workers, residential care workers, pupil support assistants and many more. Why are the Government already able to give unilateral guarantees about the remaining rights of bankers but unable to give the same guarantees to my constituents?
Paul Blomfield (Sheffield Central) (Lab)
The Minister is seeking to brush away concerns about this issue. Last month, the British Chambers of Commerce reported that 41% of companies said that their staff had expressed uncertainty about their future. Across the country, EU staff in our universities, who make up 15% of academics and contribute hugely to our research, are reconsidering their position. NHS England’s chief executive is so concerned that he has called for early reassurance about the future of EU workers. Will the Government simply resolve this uncertainty by committing to implement the decision of this House on 6 July and acting with urgency to give EU nationals currently living in the UK the right to remain?
Mr Walker
As I said in yesterday’s debate, the Government recognise the enormous contribution that EU citizens make to our health service, our universities and business. We want to ensure that their rights are protected, but we need to do so through the process of negotiation and agreement.
Alex Salmond (Gordon) (SNP)
Will the Minister now answer the question from my hon. Friend the Member for Glenrothes (Peter Grant)? Why was the Chancellor yesterday, in front of the Treasury Committee, able to give an unambiguous guarantee about the travel and residential rights of bankers that he is not prepared to give to our hard-working fellow European citizens?
Mr Walker
When the right hon. Gentleman intervened on me in yesterday’s debate, I had a sneaking suspicion that he might be, perhaps inadvertently, misrepresenting the comments of the Chancellor to the Select Committee. Having read the transcript, it is clear that the Chancellor was making it clear that his role was to advocate on this in the policy discussions to come with the Home Office and other Departments. He was not doing as the right hon. Gentleman says.
John Nicolson (East Dunbartonshire) (SNP)
The Minister of State, Department for Exiting the European Union (Mr David Jones)
Immigration is a reserved matter. However, we are working closely with the Scottish Government and we will get the best possible deal for all parts of the United Kingdom as we leave the EU. We will give the Scottish Government every opportunity to have their say as we develop the negotiating strategy.
John Nicolson
During the European Union referendum, the former Justice Secretary, the right hon. Member for Surrey Heath (Michael Gove), said that Scotland could decide its own immigration policy in the event of Brexit. Was that proposal defenestrated at the same time as the former Minister?
Mr Jones
As I have indicated, immigration is a reserved matter, but as I have also indicated, we will continue to have discussions with all the devolved Administrations, including the Scottish Government, and there will in due course, as the matter develops, be discussions about where powers should lie.
Wes Streeting (Ilford North) (Lab)
The Parliamentary Under-Secretary of State for Exiting the European Union (Mr Robin Walker)
London is a great global city and we expect it to continue to be so. I am sure that the hon. Gentleman will join me in welcoming the record-breaking jobs figures for London that were published yesterday—I think they show the lowest rate of unemployment in London in our lifetime. The Secretary of State has already met the Mayor of London and we expect to hold meetings with regions across the UK to ensure that their views are taken into account.
Wes Streeting
I am sure the Minister welcomes the LondonIsOpen campaign led by the Mayor of London, so will he give a commitment today that he will look with an open mind at the case being developed by London’s business community for a work permit system for London that would enable us to continue to recruit the best and the brightest talent from around the world?
Mr Walker
The precise way in which the Government will control the movement to the UK of EU nationals and people from around the world is something that we will be working on with the Home Office. We will certainly take into account representations from London and other devolved areas, but we clearly need to come up with a policy that works for the whole of the UK.
Mr David Burrowes (Enfield, Southgate) (Con)
I am holding a Brexit forum next month with local businesses in my constituency involving interests ranging from information technology to the creative industries, retail and property. What is the Minister’s advice to those local businesses about engaging with Brexit? Is it to embrace the challenges and opportunities presented, or is it to follow the lead of the Opposition that is full of pessimism and denial?
Mr Walker
My hon. Friend is absolutely right that we need to make sure that we embrace the full range of challenges and opportunities in the Brexit process, and we need to engage with business through that process. It is excellent that my hon. Friend is holding a forum and it is good that he is listening to businesses in his constituency. That is certainly something that we as the Department will be doing all around the country.
Tulip Siddiq (Hampstead and Kilburn) (Lab)
The Government’s shocking record on tackling air pollution is well documented, with almost 10,000 associated deaths in London in just one year. Given that the Government regularly flout EU regulations on air pollution even now, what assurance can the Minister give me that once we exit the European Union, they will not simply abandon all legal protection on air pollution in the capital and, indeed, in the country more widely?
Mr Walker
The Government are firmly committed to improving the UK’s air quality and cutting harmful emissions. That is why we have committed more than £2 billion since 2011 to increase the uptake of ultra-low emission vehicles, to support greener transport schemes and to set out a national plan to tackle pollution in our towns and cities.
Tom Brake (Carshalton and Wallington) (LD)
I have visited the Institute of Cancer Research. It wants to develop a London cancer hub, which I hope the Government will support, and, if that development happens, it expects to be able to develop two new cancer drugs in five years. One of its concerns is that 30% of its postgraduates come from the European Union. What guarantees can the Minister give that these essential London workers will be able to continue in post, and indeed that the institute will be able to recruit from the EU in the future?
Mr Walker
I refer the right hon. Gentleman to my earlier answer to the Chair of the Science and Technology Committee. We want to continue to attract the brightest and the best, and we will certainly make sure—I have already engaged with cancer charities and a wide range of voluntary organisations—that we take concerns into account as we have conversations with the Home Office and other Departments about the UK’s future immigration policy.
Ms Margaret Ritchie (South Down) (SDLP)
The Secretary of State for Exiting the European Union (Mr David Davis)
The Prime Minister is clear that we want the most open and free access possible. All countries have access to the single market; the question is on what terms and to what extent. We are seeking a bespoke outcome on terms of trading with and operating within the European market. As one of the world’s largest economies, we are confident that we will negotiate the right deal for England, Scotland, Wales and Northern Ireland. We are acutely aware of the significant trading links between Ireland and Northern Ireland, and we are determined to ensure a smooth transition. Disruption is in no one’s interest.
Ms Ritchie
The Secretary of State’s answer suggests that nothing has yet been set in stone. With that in mind and given the importance of membership of the single market to the all-Ireland economy, will the Secretary of State commit to exploring ways in which Northern Ireland can remain in the single market, because of its importance to our business, in the eventuality that Britain leaves?
Mr Davis
What I will commit myself to—I have already committed to this—is extensive work to ensure that we keep an open border between the north and the south, maintain the common travel area, and maintain the most effective open market that we can achieve. Within that, I do not intend to specify any particular outcome at this point.
Mr Steve Baker (Wycombe) (Con)
The remain campaign was perfectly clear that we have to leave the single market. [Hon. Members: “Do you mean the leave campaign?”] No, I mean the remain campaign. Are not the really important questions whether the French wish to sell us wine without tariffs, whether the Germans wish to sell us cars without tariffs, and whether the whole of Europe wishes to continue its current level of access to the City?
Mr Davis
My hon. Friend makes a very important point. When the Prime Minister is at the European Council tonight and tomorrow, she will reiterate what we have said many times already: we want an outcome that is successful for both the United Kingdom and the European Union. As my hon. Friend suggests, if the UK and the EU do not achieve an open, free and barrier-free trading relationship, it will be harmful to many European countries and harmful to European financial stability, and no one wants that.
Helen Goodman (Bishop Auckland) (Lab)
Were we to leave the customs union, the businesses exporting 44% of our exports to the EU would face extra costs for compliance with the rules of origin, which the OECD estimates at 25%. Does the Secretary of State not agree that membership of the customs union is even more important than membership of the single market?
Mr Davis
As I said earlier, these matters are assessed very carefully, but perhaps the hon. Lady should look at various other countries around the European Union, although they are all smaller than us, so they are not really good models. There is Turkey, which is inside the customs union and outside the single market; there is Norway, which is inside the single market and outside the customs union—actually it manages to trade with Sweden very easily—and there is Switzerland, which is outside both the customs union and the single market. What we are looking for is the best balance to achieve the best outcome.
Mr Peter Bone (Wellingborough) (Con)
Obviously the Minister cannot speculate on how the negotiations will go, but the one thing we do know is that we have already had a Brexit dividend. With the pound falling by 15.2% against the euro, our exports are so much cheaper and our imports are so much more expensive that more jobs will come into this country and more goods will be produced here, which is a very good thing.
Mr Davis
It is not for this Minister, at any rate, to comment on what is the appropriate or right level of the pound. However, as my hon. Friend says, this has its disadvantages in terms of the effect on inflation, but some serious advantages in terms of our trading capability, and those are much bigger even than the tariffs that people talk about.
Several hon. Members rose—
Mr Speaker
Order. I would call the hon. Member for Rutherglen and Hamilton West (Margaret Ferrier) if she were standing, but she is not, so I will not.
Margaret Ferrier
Mr Davis
What I can undertake to do is to ensure that we secure the freest and most open possible trading arrangement with Europe. That is what matters, not titles such as “single market”, “hard Brexit” or “soft Brexit”—all those amazing terms that people come up with. We want the maximum possible access, which will encourage job growth, wealth growth and revenue growth in this country.
Philip Davies (Shipley) (Con)
Membership of the single market means accepting EU laws, having to accept rulings from the European Court of Justice, probably still making contributions to the EU budget, and accepting free movement of people, all of which flies in the face of what the British people voted for in the referendum. Is not the only question of principle that is at stake the question of whether the EU wants to continue its tariff-free trade with the UK or if it wants to commit economic suicide?
Neil Parish (Tiverton and Honiton) (Con)
The Parliamentary Under-Secretary of State for Exiting the European Union (Mr Robin Walker)
The UK has been a leading player on environmental policy, setting the international agenda on climate change, as demonstrated by the Prime Minister’s commitment to ratify the Paris agreement as soon as possible. As recently announced, Britain will take back control of its laws through the great repeal Bill. Any changes to our environmental regulations after that time will be for the Department for Environment, Food and Rural Affairs and this House to decide. The UK will continue to be a leader on international environmental co-operation.
Neil Parish
The European directive on bathing water has actually been part of a very good environmental law—water companies have cleaned up our beaches throughout the country, including the south-west—so can we rest assured that we will not row back on environmental laws that are good? Not all environmental laws from Europe are bad.
Mr Walker
I can see my hon. Friend’s point that it is in the UK’s interest to ensure that we have the cleanest possible bathing water. That issue will be something for future debates perhaps with DEFRA, but we will ensure that we maintain at least the standards that we have maintained in the past. I remind him of our manifesto commitment to be the first generation to leave the environment in a better state than we inherited.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Is the Minister not aware that on environmental issues—waste, water and energy—we have such close relationships throughout Europe and we are very dependent on the high level of its technology and co-operation with us? Many people in that sector have read Matthew Parris’s article describing Brexit as the worst decision this country has made since Suez. Does the Minister agree with that view?
Alistair Burt (North East Bedfordshire) (Con)
Mr Walker
Absolutely. I can assure my right hon. Friend that there is close co-operation between my Department and DEFRA and indeed there have been a number of productive meetings between Ministers in our Department and agricultural interests, including the National Farmers Union and agri-business representatives from the whole of the UK.
Angela Smith (Penistone and Stocksbridge) (Lab)
The Secretary of State for Exiting the European Union (Mr David Davis)
A large component of the people who voted to leave the EU could be characterised as the British industrial working class. It is no part of my brief to undermine their rights—full stop. As a Government, we have been clear that we will do nothing to undermine workers’ rights. All law in this area at the time of exit will be brought under UK law as part of the great repeal Bill, ensuring continuity.
Angela Smith
The 2000 part-time workers regulations implemented the EU directive that guarantees that the rights of part-time workers are equal with those of their full-time colleagues. Will the Secretary of State guarantee that those rights will not be removed or diluted in any way when the UK leaves the EU?
Mark Durkan (Foyle) (SDLP)
On that point, employment law is a devolved matter in Northern Ireland, so under the great repeal Bill will that competence be automatically devolved, or will it be held in some sort of holding room here before it is devolved?
Mr Davis
The hon. Gentleman raises an important point. That is why I said last week when we were talking about the great repeal Bill that we will have extensive discussions with all the devolved Administrations to ensure that each appropriate piece of law goes to the right place.
Tommy Sheppard (Edinburgh East) (SNP)
The Parliamentary Under-Secretary of State for Exiting the European Union (Mr Robin Walker)
We have engaged with a number of higher education institutions, including groups such as Universities UK. Over the next few months, the Department will continue to engage with key stakeholders in business and civil society, including universities, through a series of round tables, bilaterals and visits throughout the UK. We have been clear we want to create an environment in which the UK as a whole can continue to be a world leader in research, science and tertiary education.
Tommy Sheppard
There are 4,512 students at the University of Edinburgh from other EU countries and several thousand other EU nationals engaged in research, teaching and administration at the university. I ask Ministers again: do they not realise that the refusal to guarantee the status of those people in our community is placing in jeopardy much of the work of that great institution and is causing unnecessary anxiety in our community?
Mr Walker
I refer the hon. Gentleman to the answers I gave earlier on the Government’s full intention to secure the rights of EU citizens in the UK and UK citizens in the EU. The Government recently announced that EU students applying for a place at an English university or further education institution in 2017-18 will continue to be eligible for student loans and grants for the duration of their course, and I believe the Scottish Government have made the same guarantee.
David T. C. Davies (Monmouth) (Con)
The Secretary of State for Exiting the European Union (Mr David Davis)
The Prime Minister has made it clear that she will trigger article 50 by the end of March 2017. It is in everyone’s interests that we take time to establish a UK approach and clear objectives for negotiations. Equally the Prime Minister has been clear that there will be no unnecessary delay. We have also been clear that we will trigger when the time is right for Britain and we will certainly, where possible, give people and businesses in Britain and other European countries the time to consider for themselves what the outcome will amount to. That is what we are doing.
David T. C. Davies
Does my right hon. Friend agree that this Government are absolutely right to deliver the Brexit that 17.2 million people voted for, and to do it in a responsible fashion that allows it to deliver the great deal for Britain that we know it is going to deliver?
Sir William Cash (Stone) (Con)
Is my right hon. Friend aware that in the last 24 hours the House of Lords has reported that there should be a vote in this House
“to debate and approve the negotiating guidelines, at least in outline”?
Does he accept that Parliament as a whole, including the House of Lords, has to not only respect, but also accept, the verdict of the British people and furthermore that it is for this elected House to determine its own procedures, standing orders and votes?
Anna Soubry (Broxtowe) (Con)
As my right hon. Friend will know, a very important court case has been heard in the High Court in the last week. What plans has he drawn up, including legislation, in the event that he loses that case and that therefore it will be this place, including the House of Lords, that will trigger article 50, not the Government using the royal prerogative?
James Berry (Kingston and Surbiton) (Con)
The Secretary of State for Exiting the European Union (Mr David Davis)
Last week I updated the House on our progress towards leaving the EU. I have been clear that the Government’s overarching aims are bringing back control of our laws to Parliament, bringing back control of decisions over immigration to the UK, maintaining the strong security co-operation we have with the EU, and establishing the freest possible market in goods and services with the EU and the rest of the world.
The great repeal Bill will end the primacy of EU law. It will minimise uncertainty and return sovereignty to the institutions of the United Kingdom, because that is what the referendum was all about—taking control.
We will work to ensure the UK’s exit from the EU serves the interests of the whole country, from citizens to businesses. We will reap the opportunities exit provides all over the world and deliver an orderly and smooth transition, but I have been clear, as has the Prime Minister, that we will not be providing a running commentary on the negotiations; that would not be in our interests. Parliament will however be fully and properly engaged, as will the devolved Administrations.
We want to build a national consensus around our position and discuss our options with a range of stakeholders. Last week, I committed to a series of debates so that the House can air its views and we look forward to engaging with the new Select Committee. I congratulate again the right hon. Member for Leeds Central (Hilary Benn) on his election as Chair of that Committee.
James Berry
From the Mill bakery next door to my constituency office to the wards of Kingston hospital, thousands of EU citizens work and live in Kingston, and they are very welcome. What process does my right hon. Friend have in mind for ensuring their rights are protected post-Brexit, as well as the rights of British ex-pats living in the EU, something that none of the 27 Heads of State is yet to guarantee?
Mr Davis
As the Under-Secretary of State for Exiting the European Union, my hon. Friend the Member for Worcester (Mr Walker) has made clear already, we want to be able to guarantee the rights of all those European migrants in the UK. Many of them are already in the position of having indefinite leave to remain, or will have by the time we leave in two and a half years’ time or thereabouts, so we are talking about a small fraction of those people, but nevertheless we take this incredibly seriously and we will seek to get the agreement with the other European countries that we will uphold their rights and British citizens’ rights abroad as soon as possible.
Jenny Chapman (Darlington) (Lab)
I don’t know about you, Mr Speaker, but the British people have had enough of being misled over these issues. Will the Secretary of State tell the House and the country whether his plan—as it evolves—will involve this country agreeing to continue to make payments to the European Union after we have left it?
Jenny Chapman
I look forward to being able to ask the Secretary of State a question with a straight face in anticipation of getting a straight answer. Could he perhaps try to tell the House and the country how much he estimates will need to be spent on settling legacy commitments prior to the completion of Brexit? The Financial Times estimates—this is not a leak; it is an analysis—that our historical liabilities could cost up to £20 billion.
Mr Davis
I have no trouble keeping a straight face when dealing with the Opposition. I am afraid that, from time to time, they do things that are seriously not in the country’s interests. Let me quote a rather more authoritative source than the Financial Times. The European Commission has guidelines on how it handles negotiations and what it puts in the public domain beforehand. It states:
“The negotiations and their texts are not themselves public. This is entirely normal for trade negotiations, not just those involving the EU. There are several reasons for this. A certain level of confidentiality is necessary to protect EU interests and to keep chances for a satisfactory outcome high. When entering into a game, no-one starts by revealing his entire strategy to his counterpart from the outset: this is also the case for the EU.”
The Opposition are trying to put us in a disadvantaged position with the European Union, and that is not in the national interest.
Sir Desmond Swayne (New Forest West) (Con)
The Minister of State, Department for Exiting the European Union (Mr David Jones)
My right hon. Friend raises an important point. Many hon. Members are seeking to identify the challenges associated with exiting the European Union, but there will also be a great number of opportunities, not least because we will be in charge of our own affairs and our own trade policy. For that reason, my Department and the Department for International Trade are engaging regularly with businesses not only in the United Kingdom but around the globe.
Tulip Siddiq (Hampstead and Kilburn) (Lab)
Mr David Davis
Most EU funds will be guaranteed post-departure by the Treasury, as we said in August. After that, the decision will be one for the British people, the British Parliament, the British Government and the relevant Department. I am sure that they will take on board what the hon. Lady has said.
Nigel Adams (Selby and Ainsty) (Con)
The Parliamentary Under-Secretary of State for Exiting the European Union (Mr Robin Walker)
Absolutely. We do not think that there is any doubt about that. London has once again been ranked as the No. 1 global finance centre in 2016. The next highest ranking EU location was not even in the top 10. Being part of the EU market is partly responsible for our ranking, and we are looking to maintain the best possible terms of trade with the EU market, but that is not the only factor. London clearly leads the world with the depth and expertise of its labour force, the breadth of its knowledge, services and infrastructure and its wide array of links to markets around the world. It is in the interests of the UK and the EU that that should continue.
Dr Roberta Blackman-Woods (City of Durham) (Lab)
Mr Walker
The hon. Lady makes an important point. As I said earlier, we want the UK to remain a scientific superpower. We have already seen significant guarantees from the Treasury in the lead-up to 2020. It will be in the interests of future UK Governments to ensure that we remain one of the world’s scientific leaders.
Scott Mann (North Cornwall) (Con)
Mr David Jones
My hon. Friend makes an extremely important point. As I indicated previously, the Chancellor has effectively guaranteed structural funding to 2020. It is important that such programmes deliver value for money and to that end the Government will liaise closely with the devolved Administrations and local authorities such as Cornwall Council.
Alison McGovern (Wirral South) (Lab)
Given the Secretary of State’s answer to Question 1 on financial services, I am sure he is well aware that Merrill Lynch has 1,000 staff in Chester and that Santander has more than 1,000 staff in Bootle. However, he has staff only in London and Brussels. Will he therefore commit to base staff from his Department in every region of England so that businesses can share their views directly with them?
Mr David Davis
This is not about the allocation of staff. If I put one staff member in every region, only one will be left in Whitehall. The simple truth is that we have been around from Belfast to Blackburn to the port of Tilbury and many other places in the UK and will continue to do so throughout the process, both up until the point at which we trigger article 50 and thereafter.
Mrs Maria Miller (Basingstoke) (Con)
Mr Davis
I reiterate that my Department’s task is to bring decisions back to the United Kingdom so that the British Government and the British Parliament can make them in the interests of the United Kingdom. My right hon. Friend can be absolutely sure that those interests will not be interpreted into somehow denying staff to the NHS—just the reverse.
Alan Brown (Kilmarnock and Loudoun) (SNP)
The Secretary of State said yet again that there will be no running commentary on the negotiations. Yesterday, the Chancellor announced plans to protect financial services workers over other EU nationals. Did the Secretary of State agree that strategy with the Chancellor or is it just proof that the Government do not have a clue what they are doing?
Several hon. Members rose—
Mr Speaker
The hon. Member for Stafford looks very happy. Presumably, like me, he is celebrating Arsenal’s 6-0 victory last night.
Jeremy Lefroy (Stafford) (Con)
I am, Sir. Will the Secretary of State reassure many factories in the west midlands and my constituency that the smooth, tariff and hassle-free operation of supply chains is of the utmost importance to him?
Nick Thomas-Symonds (Torfaen) (Lab)
In a written answer to me yesterday, the Secretary of State for Wales talked about the full engagement of the devolved Administrations in Brexit negotiations. The best way to protect Wales’s interests would be to put the First Minister in the Government’s negotiating team. What good reason is there not to do so?
Mark Pawsey (Rugby) (Con)
Companies in the supply chain to the motor industry, such as Automotive Insulations in my constituency, have benefited from multinational investment in the sector in recent years. What recent discussions have taken place to reassure the sector that the UK is a great place in which to invest?
Kirsty Blackman (Aberdeen North) (SNP)
People in Scotland are scared about being left on a relatively small island without the protection of the EU and with perpetual Tory Governments in charge of employment law. Will this Government commit to fully devolving employment law so that we can better protect our workers?
Mr Davis
I have to say that it was this Minister who gave the commitment that we would not undermine or in any way reduce the protection available to British workers’ employment rights in all the nations of the United Kingdom. Tomorrow, I am meeting Mike Russell, the Scottish National party’s representative, in Glasgow to discuss this sort of thing.
Fiona Bruce (Congleton) (Con)
Will Ministers reassure farmers in my constituency that in reviewing agricultural and environmental regulations they will have at the forefront of their minds the need for our farmers to produce the high-quality food that they do in a profitable way, just as any other business does?
Mr David Jones
My hon. Friend makes an extremely important point, and of course one benefit of leaving the European Union is that not only will we be able to adhere to stringent environmental requirements, but we will be able to design those so as best to suit the needs of this country and the agricultural industry.
Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)
Both Nissan and Jaguar Land Rover have made it clear that access to the single market is crucial to their future investment decisions in this country. What discussions has the Minister had with those companies to give them reassurance that access to the single market is the Government’s highest priority?
Mr David Davis
More important than me, the Prime Minister had a meeting with Nissan only this week, and the communiqué that came out after it was extremely positive on both sides.
Martin Vickers (Cleethorpes) (Con)
Brexit has been widely welcomed by leaders of the fishing industry in the Grimsby-Cleethorpes area. The industry was badly let down in the original negotiations in the 1970s. Can my right hon. Friend assure me that that will not be the case on this occasion?
Mr David Jones
My hon. Friend makes an extremely important point. The interests of the British fishing industry are at the forefront of the Government’s mind. Indeed, we have already had meetings with the Scottish fishermen and had round-table meetings at the Department for Environment, Food and Rural Affairs.
Several hon. Members rose—
Jim Shannon (Strangford) (DUP)
In Northern Ireland, my constituency has some of the best export businesses in agri-food and fishing, and they need attention. Minister, may I invite you to my constituency to hear what they have to say?
Business of the House
(7 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Valerie Vaz (Walsall South) (Lab)
Will the Leader of the House give us the forthcoming business?
The Leader of the House of Commons (Mr David Lidington)
The business for next week will be as follows:
Monday 24 October—Second Reading of the Health Services Medical Supplies (Costs) Bill.
Tuesday 25 October—Second Reading of the Criminal Finances Bill.
Wednesday 26 October—Opposition day (10th allotted day). There will be a debate on Concentrix, followed by a debate on Yemen. Both debates will arise on an Opposition motion.
Thursday 27 October—A motion to approve the first report 2016-17 from the Committee of Privileges, followed by a debate on a motion on the Youth Parliament Select Committee report on young people’s mental health. The subject for this debate was determined by the Backbench Business Committee.
Friday 28 October—Private Members’ Bills.
The provisional business for the week commencing 31 October will include:
Monday 31 October—Second Reading of the Cultural Property (Armed Conflicts) [Lords] Bill.
Tuesday 1 November—Consideration of Lords amendments.
Wednesday 2 November—Opposition day (11th allotted day). There will be a debate on an Opposition motion. Subject to be announced.
Thursday 3 November—Business to be nominated by the Backbench Business Committee.
Friday 4 November—Private Members’ Bills.
I should also like to inform the House that the business in Westminster Hall for 17 and 24 November will be as follows:
Thursday 17 November—A debate on the first report from the Environmental Audit Committee on soil health.
Thursday 24 November—A debate on the first report from the International Development Committee on UK implementation of the sustainable development goals.
Valerie Vaz
When I was first appointed to this job, I was told, “There’s no power.” I am therefore pleased that after I raised the issue of Marmite last week, we got a result by the end of the day. Bob Dylan has been awarded the Nobel prize for literature but has not contacted the academy, so we say to Bob, “Please contact the academy.” I thank the hon. Member for Perth and North Perthshire (Pete Wishart) for his kind comments last week. As a composer, perhaps he can spot the subliminal messages to Bob.
We are governed by a Government of urgent questions and, if we are lucky, statements. Now we are to have a statement on the crisis in the funding of pharmacies. However, it took an urgent question by my hon. Friend the Member for Barnsley East (Michael Dugher), which you granted, Mr Speaker, to get the Minister to come to the House today. May I ask the Leader of the House, why a statement and not a debate? The Minister responsible has said that the Government have proposed a way to reduce the £2.8 billion currently paid to the sector, but that the Pharmaceutical Services Negotiating Committee has rejected it. In February, the Health Secretary said that
“pharmacists have a very important part in the future of the NHS.”—[Official Report, 11 February 2016; Vol. 605, c. 1775.]
So why the cuts?
On 25 April, the Health Secretary commended the important role
“that pharmacies can play in solving absolutely any problem that the NHS faces.”—[Official Report, 25 April 2016; Vol. 608, c. 1170.]
And in July this year, he said that
“this is the right moment to rethink the role of pharmacies, and consider whether we can be better at tapping into the incredible skills that pharmacists have as trained clinicians, which I do not think we make the most of.”—[Official Report, 5 July 2016; Vol. 612, c. 733.]
So why the cuts? The Health Secretary is a jokerman. If it’s all good, why is he cutting the budget for the sector, much of which is made up of small businesses on which many communities rely as a lifeline?
For the second time this week, we have government by urgent question. Only last week I mentioned the reversal of the economic policy of the right hon. Member for Tatton (Mr Osborne), and here comes another reversal. May we have a full debate, not just a statement or an urgent question, on the sale of annuities? Dragged to the House on a U-turn so spectacular that we cannot see around the bend, the poor Minister responsible said that after extensive research, it was clear that a secondary market would not be able to offer this scheme. There were many unanswered questions. For instance, when did the Government first do the extensive research? Did the former Chancellor not look at the evidence in March 2015, or was this just a means of stimulating the economy using people’s hard-earned savings while pursuing austerity measures? The answer, Mr Speaker, is blowin’ in the wind.
Will the Leader of the House make a statement to explain what the Secretary of State for International Development meant when she said that the Government cannot reveal their hand on negotiations to exit the EU because one does not do so when one plays poker? Poker, Mr Speaker? Are the Government gambling with the lives of the British people? Even Margaret Thatcher had a negotiating position. It was “No, no, no”, or “I want a rebate”. The Government say that they cannot reveal a negotiating position; we say that that is basic accountability. The only answer from the Government is that a hard Brexit’s a-gonna fall.
The debate or statement on airport expansion in the south-east, which was scheduled for next week, has now been postponed yet again. The Prime Minister made her intentions clear, but only in a response to the hon. Member for Bedford (Richard Fuller) at Prime Minister’s questions. She said that
“this Government will take a decision, but then a formal process has to be undertaken. The Government will identify their preferred site option. ?That will go to a statutory consultation, and then the Government will consider the results of that consultation”.—[Official Report, 20 October 2016; Vol. 615, c. 802.]
I think that is Davies part 2. What of the timetable for implementation—the second part of the question that was not answered—and the further work on noise pollution, environmental issues and compensation from Davies part 1? Will those take place? Members of the Cabinet are on different sides of the debate—they are all tangled up in blue.
I want to place on record my thanks to the former Prime Minister and his wife Samantha for their unstinting support for epilepsy charities, much of which goes unnoticed.
Tomorrow, we remember the 50th anniversary of the Aberfan disaster in which 114 children and 28 adults lost their lives. I hope that wherever a flag is flown in our one nation tomorrow, it will be at half-mast.
Our colleague, friend and supporter of the vulnerable, Jo Cox, gave great service to her country through her public service, and so rightly deserves a plaque in this Chamber.
Jean, Gordon and Kim Leadbeter and Brendan Cox should not have had to bury their daughter, sister and wife, and her adored children should not have had to grow up without their mother. Our love to them all. May she rest in peace.
Mr Lidington
May I first deal with the two very serious points that the hon. Lady raised at the end of her remarks? I am sure that every single Member of the House will want to mark the appalling tragedy in Aberfan when the anniversary is commemorated tomorrow. None of us can ever forget—even if we were fairly young children at the time—the searing impact of the photographs and news coverage of what happened there. The images and the visible grief of the families are still clear in the memory. So too, as my right hon. Friend the Prime Minister said yesterday, is the fact that those who might have been able to prevent the tragedy in the first place did not act in fulfilment of their responsibilities and did not, until forced to do so, own up to their responsibilities until we had an independent inquiry some years later.
Solidarity with Aberfan will unite the House, as will sympathy with the family of our late colleague, Jo Cox. I know that the matter of the commemorative shield is very high on your agenda, Mr Speaker. I pay tribute to the Parliament choir, which exists as an all-party parliamentary group and, with the agreement of Jo’s family, has commissioned a new choral composition that will be performed in her memory at a forthcoming concert.
On the political points, I was not sure whether the hon. Lady was complaining about there having been too many urgent questions. I felt that there was a certain retrospective character to her comments. On pharmacies, as she knows, there will be a statement by the Under-Secretary of State for Health, my hon. Friend the Member for Warrington South (David Mowat), after business questions this morning, in which he will set out in detail the Government’s approach to community pharmacies. It is very important that we ensure not just that the money going to the national health service is sustained and increased, as the Government are doing, but that every last penny that goes to the NHS is spent to give patients the best possible value. We need to look at community pharmacy within primary, secondary and tertiary health care to ensure that we get the best possible value out of every penny of precious NHS funding that is spent.
On the hon. Lady’s point about the sale of annuities, as my hon. Friend the Economic Secretary to the Treasury said yesterday, the Government made a thorough and honest assessment of the prospects for a genuine market in secondary annuities, and we reluctantly came to the conclusion that to have gone ahead with the measures originally envisaged would not have been of benefit to the very group of consumers who were looking to a secondary annuities market to provide them with some relief, because the products were simply not going to be available to give them the additional safeguards and opportunities that they were seeking.
I struggle to understand the Opposition’s position on the negotiating position that the Government are adopting for the forthcoming European Union negotiations. I would have thought that whether we are talking about politics, business or any other walk of life, if we are about to start a very important and wide-ranging negotiation, the last thing that we should do is advertise the detail of our negotiating position so that the people with whom we are negotiating can see everything spread out in front of them. The Opposition need to wake up and realise that the people who would be most delighted if they got their way are the people with whom we will be negotiating across the table.
Finally, on the hon. Lady’s point about airports, as the Prime Minister said, the Government will make an announcement in the near future about which of the options proposed in the Davies report we will adopt. The Davies report said that any of the three options that it proposed would be deliverable and sustainable. The Government will, of course, comply with the requirement of statutory consultation following that announcement, which the Labour Government put in place. That helps to account for the delay about which she is now complaining.
I have to say that if there is one thing that is blowin’ in the wind this morning, it is the coherence of the Labour party’s ideas about policy. I do not know whether Labour Members are sleeping well at night, but it is very clear to me that there is no place they’re going to.
Several hon. Members rose—
Mr Speaker
Order. As usual, a very large number of hon. and right hon. Members are seeking to catch my eye. As colleagues will know, my normal practice is to call everybody on these occasions, but there are exceptions. Today, there is a statement on community pharmacy to follow, and there are two very heavily subscribed debates to take place under the auspices of the Backbench Business Committee. Therefore, it may not be possible to call everyone today, but if I am to have any chance of doing so, there is a premium upon brevity, which will be brilliantly exemplified by Mr Philip Davies.
Philip Davies (Shipley) (Con)
May we have a statement urgently from the Government about the farce of allowing the child refugees into the country? The Home Office has admitted that two thirds of successful applicants as child refugees are actually adults. Today, Jack Straw has said that we need to do better on age checks, as the right hon. Member for Birmingham, Hodge Hill (Liam Byrne), did when he was the Immigration Minister. That is a serious concern to many of our constituents. May we have an urgent statement on what the Government are going to do to make sure that the child refugees are actually children?
Mr Lidington
We do work closely with the French authorities to ensure that all those applying to the UK do actually qualify under the Dublin arrangements, which include the requirement for children to be under 18. We have to carry out the checks in a way that complies with High Court judgments on the matter. As my hon. Friend knows, the British Dental Association has taken the view that to carry out X-rays of claimants’ teeth would not be a reliable indicator of age, as well as being, in its view, unethical.
Pete Wishart (Perth and North Perthshire) (SNP)
May I also thank the Leader of the House for announcing the business for next week? I join him and the shadow Leader of the House in the tributes to Aberfan. Today is a very special day, with the by-election in Batley and Spen, and we recall all the horrific events around the murder of Jo Cox.
Today, we find that the Prime Minister is off to Brussels for her first trip with EU leaders since she became Prime Minister. She is advocating something I think she describes as a “smooth Brexit”. May I suggest that, in our debates, we get our terms absolutely right for Brexit? We have hard Brexit and soft Brexit. I want to suggest crispy Brexit, soggy Brexit and maybe “I can’t believe it’s not Brexit.”
The serious point is that we still have not had a debate in Government time on their plans to leave the European Union. We have had one in SNP time and one in Labour party time. We heard the Lords EU Committee say yesterday that the issue must be properly debated and scrutinised, and even suggest that we have a debate in advance of article 50 being triggered. So can we now—I am going to ask the Leader of the House this every week—have solid plans and proposals for when this House will get to debate what the Government intend to do?
The redrawn boundaries for Scottish Members of Parliament were produced this morning, and they would reduce the number of MPs from Scotland from 59 to 53. SNP Members would like to reduce that number to zero when we gain our independence and sovereignty, but in the meantime, while we are still here, I would like the opinion of the Leader of the House on one issue—I saw that he was in the debate briefly yesterday. How can it possibly be right that, in these Houses of Parliament, we now have more parliamentarians appointed by a Prime Minister than elected by the people? He is making that worse.
Finally, tomorrow we have the private Member’s Bill tabled by my hon. Friend the Member for East Dunbartonshire (John Nicolson) on a very important issue. The “Turing Bill” seeks to posthumously pardon thousands of gay men who were caught up in all the anti-homosexual legislation. However, we have heard that the Government are withdrawing support for it, in favour of an amendment in the House of Lords. It should be here in the Commons that the issue is properly considered, by elected Members. All that the Government’s action will do is lead to the withdrawal of support and further undermine the credibility of private Members’ Bills. Will the Leader of the House rethink that decision and make sure that the Government support the private Member’s Bill tomorrow?
Mr Lidington
There have already been many opportunities to hold Ministers to account for the Government’s approach to the European negotiations. We have just had questions to my right hon. Friend the Secretary of State for Exiting the European Union, who has also made a number of oral statements to the House about that since the referendum.
I am slightly surprised that the hon. Gentleman should appear to denigrate the importance of Select Committees in this House and the other place. It is simply wrong to believe that only a debate in plenary session qualifies as scrutiny. In my experience, having served as a Minister for more than six years, Select Committees can often be much more demanding on Ministers in terms of preparation and thinking through one’s policy. We should respect the importance of those Committee hearings. My right hon. Friend the Prime Minister will give an oral statement next week about the European Council, and that will provide yet another opportunity for such questioning.
On the hon. Gentleman’s point about his hon. Friend’s Bill, the Government very much share his wish to see pardons given to people who were convicted of consensual homosexual acts when those were criminal offences. The Government are proposing that we should legislate both to provide posthumous pardons for people who are now deceased and to make it clear that those who are still living can apply under a statutory deregistration scheme for their conviction to be deleted from the record, so that they would then qualify for a pardon. The reason we cannot support his hon. Friend’s Bill is that it does not take account of the need, in respect of people who are now living, to check that the offence of which they were convicted was genuinely consensual and did not involve, for example, a sexual offence against a minor, which would still be a breach of the criminal law today.
Several hon. Members rose—
Mr Speaker
What is now required, in each case, is a short question without preamble and a characteristically pithy reply from the Front Bench.
Amanda Milling (Cannock Chase) (Con)
Last week, Briggs Equipment celebrated its 10th anniversary. To mark this occasion, it held an event where I got to meet 14 new apprentices. Will my right hon. Friend join me in congratulating Briggs on its anniversary and wish the new apprentices the best of luck with their new careers; and may we have a statement on the Government’s 3 million apprenticeship target?
Mr Lidington
I am delighted to hear the news from my hon. Friend’s constituency. The Government regard their 3 million apprenticeship target as a key element in increasing the skills and productivity of our nation. As the evidence from her constituency shows, sensible businesses realise that developing apprenticeship schemes is in their own commercial interest as well.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
Last year, the UK received £5.6 billion from the European Investment Bank for investing in skills, housing, schools and infrastructure across the country. With the UK currently languishing at the bottom of the G7 productivity league table, may we have an urgent debate on the impact of leaving the European Union and potentially losing our stake in the European Investment Bank on the UK’s productivity, and the Government’s plans to address this?
Mr Lidington
All these things will of course be elements in the negotiations. The Government have made it very clear that their industrial strategy is intended to address the very deep-seated, long-running productivity problem that we have.
Sir David Amess (Southend West) (Con)
Will my right hon. Friend find time for a debate on returning veterans with mental health issues? I recently met representatives from Care after Combat, which has a very good success rate in turning round the lives of people who unfortunately end up in prison.
Mr Lidington
The Government want to do all within our power to make sure that those who have served, and currently serve, in the armed forces have the best possible access to treatment for mental health problems, and that appropriate action is taken to prevent people from developing them in the first place. I can assure my hon. Friend of the commitment of Defence Ministers and Health Ministers to what he advocates.
Ian Mearns (Gateshead) (Lab)
I thank the Leader of the House for confirming the time allocation for the Backbench Business Committee on 3 November. Is there any element of protection for the time allocated on 27 October to the debate on the Youth Parliament’s report on young people’s mental health? May I also ask for an indication of any time allocations for Monday 7 November and Tuesday 8 November? I am surprised, by the way, that the hon. Member for Perth and North Perthshire (Pete Wishart) forgot to mention ready Brexit, but not to worry.
Mr Lidington
The time next week will be protected. I shall write to the hon. Gentleman about the other dates.
Mr Peter Bone (Wellingborough) (Con)
I remember the days when Labour Members used to complain about how much time we spent on Europe. Really, Minister, is it not about time that we stopped banging on about Europe and just got on with it?
Mr Lidington
I note my hon. Friend’s advice that we should stop banging on about the subject. If that is a belated addition to his birthday wish list, I would be happy to oblige. As a Government, we need to prepare our negotiating position thoroughly and then get the best and most ambitious deal possible on behalf of all the people of the United Kingdom.
Lilian Greenwood (Nottingham South) (Lab)
The Letters Page, a literary journal that invites submissions in the form of hand-written letters, is edited by the author Jon McGregor and creative writing students at the University of Nottingham. It is usually published three times a year as a downloadable PDF file, but the eighth edition is due to appear on 2 November in print as a limited edition boxset. Ahead of next Tuesday’s Nottingham in Parliament Day, will the Leader of the House join me in congratulating The Letters Page on that momentous event, and does it not further confirm Nottingham’s status as a UNESCO city of literature?
Mr Lidington
I am delighted to hear about the literary creativity of the hon. Lady’s constituents and of the people of Nottingham. It is good to hear that the great literary tradition of D.H. Lawrence has not been extinguished but is alive and flourishing today.
Mrs Cheryl Gillan (Chesham and Amersham) (Con)
Sepsis currently claims about 44,000 lives in the UK every year. May we have a statement on the Government’s newly announced public awareness campaign, so that we can establish how Public Health England plans to work with experts such as the UK Sepsis Trust to make sure that the campaign is as successful as possible?
Mr Lidington
Everyone in this House will want to take note of recent shocking cases where people have not had sepsis diagnosed early enough for effective treatment to be given. It is, clearly, deeply unsatisfactory that there should be any such case. Health Ministers will certainly want to ensure that there are improvements where they can be achieved, and I will draw their attention to my right hon. Friend’s request for a debate.
Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP)
May we have a debate on palliative care? Kilbryde hospice in my constituency was recently opened by the First Minister of Scotland. It is a crucial resource for those most in need at the end of their lives, and such facilities should be supported right across the United Kingdom.
Mr Lidington
I, like the hon. Lady, demonstrate support when I can for the palliative care services in my constituency. One of the important improvements in attitudes towards healthcare in recent years is the acceptance that people who are in the final stages of their lives are entitled to be treated not just for their physical symptoms, but with the respect and dignity that is due to the whole person.
Mr Stewart Jackson (Peterborough) (Con)
Last week, I hosted a meeting of my constituents in St Michael’s Gate in Peterborough, many of whom will be evicted shortly as a result of a deal between Peterborough City Council and the north London estate agent, Stef & Philips. They will be replaced by homeless people from the council’s homeless list, so may we have a debate on housing benefit regulations and the dubious and morally repugnant business model that prioritises housing benefit income for these people, rather than the interests of my long-standing constituents?
Mr Lidington
I am concerned to hear about what is happening in Peterborough. If my hon. Friend would care to provide me with the details, I will draw them to the attention of the responsible Minister straightaway.
Paul Flynn (Newport West) (Lab)
The total number of deaths caused in America by the side effects of opioid drugs has now grown to a larger figure than the total number of people killed there by road traffic accidents, guns and terrorism. Given that the use of those drugs is increasing in this country, and given that our usage of them amounts to a third of that throughout the continent of Europe, may we debate the terrible dangers that result from medicines that are more deadly than the maladies?
Mr Lidington
The hon. Gentleman has looked at drug use and drugs policy for many years, so I listen with some respect to what he says. There will be the opportunity to question Home Office Ministers about this on 31 October, and I suggest that he take advantage of that opportunity.
Mr Ian Liddell-Grainger (Bridgwater and West Somerset) (Con)
May we have time in this Chamber to debate the rural economy? There is never enough time in Back-Bench debates or in Westminster Hall to discuss the rural economy, which will be vital to the United Kingdom when we leave the European Union. May we therefore have time to do so in this Chamber?
Mr Lidington
Although there will be opportunities to question my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs and her Ministers, my advice in the short term, given the number of hon. Members from all parts of the House who represent rural or partly rural constituencies, is to make an application to the Backbench Business Committee, because there should be strength in numbers.
Alex Salmond (Gordon) (SNP)
May we have a debate on the international freedom of the press, just in case the BBC faces the closure of its Moscow bureau bank accounts by a state-owned bank in Russia—something that happens in authoritarian states but would never, ever happen in a liberal democracy such as the United Kingdom?
Mr Lidington
We all want to keep a close eye on action that the Russian authorities may take towards free media and, for that matter, civil society organisations inside their own territory. There is a history of the Russian authorities causing difficulties for journalists, broadcasters, civil society organisations and the British Council. That is something to be deplored at every opportunity.
Mrs Anne-Marie Trevelyan (Berwick-upon-Tweed) (Con)
Following my debate in Westminster Hall yesterday on the Ministry of Defence future accommodation model, I have been inundated with concerned messages from military families overnight. Will the Leader of the House therefore support my request for a wider debate in the House on the future and security of military housing provision for our armed forces families, as part of our commitment to the armed forces covenant?
Mr Lidington
My hon. Friend spoke, as she always does, with great vigour and on the basis of significant knowledge in the debate yesterday. She will have had an answer at the end of the debate from the Under-Secretary of State for Defence, my hon. Friend the Member for Milton Keynes North (Mark Lancaster), who has responsibility for veterans. The Government will publish its proposals for defence estates later this year, and that, I am sure, will provide Members with further opportunities to debate this subject.
Sue Hayman (Workington) (Lab)
The Swansea bay tidal lagoon project would pave the way for £15 billion of investment in tidal lagoons, including one planned for the Solway firth in my constituency that could provide electricity for 1 million homes. We need tidal power as part of our future clean energy. When the Government’s review of tidal lagoon technology reports next month, may we have a ministerial statement in support of that technology?
Mr Lidington
As the hon. Lady says, the results of that review are due to be reported in the next few weeks. I will make sure that my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy is aware of her request for a statement on the matter. I am sure that there will be opportunities in the House to debate these matters and for her to raise her concerns.
Mr David Nuttall (Bury North) (Con)
May we have a debate on the process used to review the green belt? In Greater Manchester, the call for developers to submit expressions of interest in building on the green belt has resulted in vast swathes of green-belt land becoming the subject of speculation. That is causing great distress and anxiety for thousands of residents.
Mr Lidington
The Government’s national planning policy framework makes it clear that green-belt land should be used for development only in the most exceptional circumstances. If a local authority wants to make such a case for exceptionalism, it has to provide the justification for that when it submits its draft local plan for examination in public, at which point an independent inspector tests rigorously the arguments that the local authority has made. These matters are, rightly, dealt with at arm’s length from central Government Ministers, but that is the procedure that my hon. Friend and his constituents might want to look at.
Tom Brake (Carshalton and Wallington) (LD)
Will the Leader of the House find time for a debate or possibly a ministerial correction on the subject of how difficult, or otherwise, it is for EU countries to export to Norway? In an earlier exchange, the Brexit Secretary said that it was very easy for Sweden to export to Norway. However, I am indebted to L. Alan Winters, professor of economics, who has said that one of the messages from a conference held in Sweden earlier this week was that
“Swedish exporters find exporting to Norway far more troublesome than exporting within the EU.”
Mr Lidington
The right hon. Gentleman will have other opportunities to challenge my right hon. Friend the Secretary of State for Exiting the European Union. I must say that I may be responsible for many things, but commercial relations between Sweden and Norway are not one of them.
Mrs Maria Miller (Basingstoke) (Con)
Will the Leader of the House, in his unique role, review the Government’s approach to their responses to Select Committee reports and speed them up? The Women and Equalities Committee has been waiting since May for a response to its gender pay gap report, and before that we waited four months for a response to our important report on transgender people.
Mr Lidington
I am grateful to my right hon. Friend for giving me notice of her question. I have looked into this matter. The report she mentions involves the responsibilities of a number of Departments, and I think that she received a letter from the Minister for Women and Equalities to alert her to the fact that there would probably be a delay in making a response. However, I share my right hon. Friend’s disquiet, and I certainly do not regard it as defensible that her Committee should have had to wait so much longer than the normal period. I will draw her concern to the attention of the Ministers responsible, and I hope that we will be able to provide her Committee with the Government response to which it is entitled as rapidly as possible.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Fifty years ago, I was a newly appointed young lecturer at Swansea University, and I remember the deeply dark and wet day of Aberfan and the deaths of all those children. May I associate myself with the comments that have been made about keeping them in our thoughts? We should have a discussion in the House about how we look after the people involved—the families, the supporters and the communities—when such tragedies happen. It took a long time to respond positively to that terrible tragedy.
Mr Lidington
The hon. Gentleman makes a very fair and reasonable point. As he rightly says, it is often some time after the immediate period of shock and grief that the full traumatic impact of what people have lived through and what they have lost bears down on them. An effective response has to involve not just statutory services but—this is often most effective—friends and neighbours in the neighbourhoods where the people themselves live. I suspect there are lessons that can be learned from successes and failures in responding to various tragedies that have taken place over the years. I hope that he has the opportunity, possibly through the Backbench Business Committee, to raise that matter in the future.
Pauline Latham (Mid Derbyshire) (Con)
May we have a debate, in this Chamber in Government time, on endangered species? Please will the Leader of the House not suggest Westminster Hall? I have tried applying for a debate there on rhino poaching for many weeks, and I have not been successful. This is a very important subject for the future of the world. I want my grandchildren and their generation to be able to see animals that are endangered.
Mr Lidington
I agree with my hon. Friend. With Environment, Food and Rural Affairs and Foreign Office Ministers in the lead, the Government are taking on the role of being one of the foremost international champions of better arrangements to protect not just endangered species but, crucially, the habitats necessary for their survival. As she knows, effective agreements require international consensus to work. That is what we are seeking through CITES—the convention on international trade in endangered species—and the international organisations that have a role in this area.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
Ten of my constituents are caught up in the Concentrix debacle with the tax credit office. In the past 24 hours, the tax credit office has called me about four cases, saying that it is shutting down the complaints on those cases prior to mandatory reconsideration being complete. May we have a debate about the tax credit office complaints procedure, because such an action breaches that procedure?
Mr Lidington
As I have said, there will be a debate on Concentrix in Opposition time next week. On the constituency case, if the hon. Gentleman wants to get the details to me later today, I will send them straight to the Financial Secretary.
Stephen Hammond (Wimbledon) (Con)
The UK financial services sector employs 2 million people and is our largest exporter and our largest generator of tax revenue. Will the Leader of the House find time for a debate in this Chamber on the industry’s importance to the UK economy and, indeed, to the Government’s framework for transitional arrangements, so that we can thrive post-Brexit?
Mr Lidington
This may be something my hon. Friend is able to raise in the forthcoming debate on industrial strategy, but I am happy to join him in recognising the importance of the sector to the UK economy. I am sure that there will be opportunities, whether under business arising through the Department for Exiting the European Union or through the Department for Business, Energy and Industrial Strategy, to reinforce the importance of the message he has given the House.
Chris Stephens (Glasgow South West) (SNP)
May we have a debate in Government time on the Government’s response to the public consultation on reforms to the civil service compensation scheme? With more than 3,000 responses and 98% against the reforms, may I impress on the Leader of the House the concerns that many Members have on behalf of constituents who have delivered public services throughout the whole of their working lives?
Mr Lidington
I want to put on the record the Government’s admiration for the way in which public servants of all grades and in all parts of our public services go about their duty. We have to recognise that, but we also have to recognise that pension schemes, like every other aspect of public expenditure, have to be paid for by taxpayers out of money taken by Government from their earnings. As the hon. Gentleman says, a consultation has been going on; Ministers will consider that consultation and respond in due course.
Mr David Burrowes (Enfield, Southgate) (Con)
May we have a debate about services for vulnerable women, which I learned yesterday are being cut because they are not gender neutral? Women’s charities made the point to me that the biggest risk factor for domestic violence is being a woman—domestic violence is not gender neutral. Will the Leader of the House and the Government acknowledge that this is an issue not of access to trousers or toilets but of vulnerable women’s access to services, which must not be sacrificed on the altar of gender neutrality?
Mr Lidington
If my hon. Friend will let me have some of the details upon which he has based his question, I will draw them to the attention of my right hon. Friend the Secretary of State for Education, who has responsibility for the Government Equalities Office.
Mr Speaker
Order. What is needed now are questions in single short sentences. If those are forthcoming they will be heard; if not, they will not be.
Nick Thomas-Symonds (Torfaen) (Lab)
I associate myself with the remarks made about Aberfan and about my late friend and colleague Jo Cox.
On Saturday I will be attending the Remission Possible ball in honour of my young, inspirational constituent Emily Clark, who sadly died from cancer earlier this year. May we have a debate on the particular needs of young cancer patients when they suffer that terrible disease?
Mr Lidington
I associate myself with the expressions of sympathy and support for Emily’s family and friends over this appalling loss. As a Government we need to make sure that the NHS works hard on policies that are more effective in preventing, identifying, diagnosing and treating cancer in children and young people. That should be the case for all cancers, but we should be aware of how heartbreaking such cases are.
Patrick Grady (Glasgow North) (SNP)
Are the Government preparing for a Division on tomorrow’s private Member’s Bill, or are the Whips lining up compliant, obsequious Back Benchers to try to talk it out?
Mr Lidington
On—of all subjects—private Members’ business, I have no idea whether people will seek to divide the House and whether Tellers will be appointed. The hon. Gentleman will have to indulge in the pleasures of delayed anticipation.
Nick Smith (Blaenau Gwent) (Lab)
Farmers in Blaenau Gwent are being forced to deal with antisocial behaviour from packs of off-road bikers, so may we have a debate on the impact of off-road biking and people riding roughshod over our countryside?
Mr Lidington
I would deplore the behaviour that the hon. Gentleman has described. Many off-road bikers observe the law and accept their responsibility, when enjoying their pastime, to respect the rights and economic interests of the people who manage and live in the countryside. I hope that the particular problem he described can be sorted out locally with effective work by the police and local authorities, but I am sure that he will find opportunities to raise the matter further in the House if that is not possible.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
Yesterday colleagues and I met the Immigration Minister to discuss plans to build a new short-term immigration detention centre in my constituency while the Dungavel facility is closing. That would result in moving detainees hundreds of miles—
Mr Speaker
Order. I do not want a speech read out, I want a one-sentence question.
Gavin Newlands
May we have a debate on the UK Government’s detention policy, which results in the UK detaining more people than anywhere else in Europe?
Mr Lidington
There will be Home Office questions on Monday 31 October. The hon. Gentleman may have the opportunity to raise his concern then.
Jim Shannon (Strangford) (DUP)
Yesterday, I met Reverend Yunusa Nmadu from Christian Solidarity Worldwide. He said that Boko Haram continues to kidnap and brutally assault thousands of young Christian girls and marry them off. Will the Leader of the House agree to a statement or debate on this matter?
Mr Lidington
The British Government are doing all they can to support the Nigerian authorities, both in getting the return of the girls who have been abducted and ensuring there is effective action against the scourge of Boko Haram.
Margaret Ferrier (Rutherglen and Hamilton West) (SNP)
England has witnessed a truly alarming rise in hate crimes against ethnic minorities and foreign nationals, and a 147% spike in homophobic attacks since the referendum. May we have a serious debate in Government time to discuss not only the problem but the action required to address it?
Mr Lidington
This matter has been raised with me during, I think, the past two business questions. I again say that I condemn, as do I think Members of all parties and on both sides of the referendum, the type of attack and abuse that the hon. Lady describes. It has no place whatever in our politics.
Steven Paterson (Stirling) (SNP)
The Government have committed to a national shipbuilding strategy by the time of the autumn statement. Will the House have the opportunity to debate that, given the disgraceful delay in ordering the Type 26 frigates?
Mr Lidington
The Type 26 frigates are being built because there is a United Kingdom Royal Navy placing those orders in Scottish shipyards—something a separate Scotland would be unable to promise. There will of course be many opportunities in this House to debate industrial strategy and to look at shipbuilding as one element of it.
Peter Grant (Glenrothes) (SNP)
Will the Leader of the House tell us when he intends to schedule the promised urgent debate on the floor of the House on the proposed Canada-EU Comprehensive Economic and Trade Agreement?
Alan Brown (Kilmarnock and Loudoun) (SNP)
Convicted criminal Lord Hanningfield left jail and returned to a job for life in another place. He was then back up in court in July this year for similar offences. Why did the parliamentary authorities step in and tell the court that it was a matter for them to address rather than the court? Will the Leader of the House commit to reform?
Mr Lidington
All this was debated yesterday, when we had a debate on the House of Lords. I do not think I have anything further to add to what my hon. Friends said on that occasion.
Community Pharmacy in 2016-17 and Beyond
Thursday 20th October 2016
(7 years, 6 months ago)
Commons ChamberRead Full debate Housing Standards (Preparation and Storage of Food by Tenants in Receipt of Universal Credit or Housing Benefit) Bill 2016-17 View all Housing Standards (Preparation and Storage of Food by Tenants in Receipt of Universal Credit or Housing Benefit) Bill 2016-17 Debates Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for Health (David Mowat)
With permission, I would like to make a statement on the future of community pharmacy. In December 2015, the Government set out a range of proposals for reforming the sector. Our intent was to promote movement towards a clinically focused pharmacy service that is better integrated with primary care and makes better use of pharmacists’ skills. I now wish to update the House on the outcome of this consultation and the measures we intend to take forward.
Let me be clear at the outset. The Government fully appreciate the value of the community pharmacy sector. There are now more than 11,500 pharmacies, an increase of over 18% in the past decade. Indeed, the overall pharmacy spend has increased by 40% over the past decade and now stands at £2.8 billion per annum. However, we do not believe that the current funding system does enough to promote either efficiency or quality; nor does it promote the integration with the rest of the NHS that we, and pharmacists themselves, would like to see.
The average pharmacy receives nearly £1 million per annum for the NHS goods and services it provides, of which about £220,000 is direct income. It includes a fixed-sum payment—the establishment fee—of £25,000 per annum which is paid to most pharmacies, regardless of size and quality. This is an inefficient allocation of NHS funds when 40% of pharmacies are now in clusters of three or more, which means that two fifths are within 10 minutes’ walk of two or more other pharmacies. There are instances of clusters of up to 15 pharmacies within a 10-minute walk of each other. When the overall NHS budget is under pressure and we need to find £22 billion in efficiency savings by 2020, it is right that we examine all areas of spend and look for improvements.
The measures that we are bringing forward today have at their heart our desire more efficiently to spend precious NHS resources. Community pharmacy must play its part as the NHS rises to this challenge. I am today announcing a two-year funding settlement. In summary, contractors providing NHS pharmaceutical services under the community pharmacy framework will receive £2.687 billion-worth of funding in 2016-17 and £2.592 billion in 2017-18. That represents a 4% reduction in 2016-17 and a further 3.4% reduction in 2017-18. Every penny saved by this re-set will be reinvested and reallocated back into our NHS to ensure the very best patient care.
Furthermore, separately commissioned services by NHS England, clinical commissioning groups and local authorities will not be affected by this change. I want to see this commissioning of services to continue to grow. From 1 December, we will also simplify the outdated payments structure; introduce a payment for quality so that for the first time we will be paying pharmacies for the service they provide, not just for the volume of prescriptions they dispense; and relieve pressure on other parts of the NHS by properly embedding pharmacy for the first time in the urgent care pathway.
As we continue the path of reform, we will be informed both by the review of community pharmacy services being carried out by Richard Murray of the King’s Fund and by other stakeholders such as the Royal Pharmaceutical Society. NHS England is investing £42 million in a pharmacy integration fund for 2016-17 and 2017-18, which will facilitate the movement of the sector faster into value-added services.
Last week, for example, I announced two additional initiatives to improve our offer to patients. First, those who need urgent repeat medicines will be referred by NHS 111 directly to pharmacists—not to out-of-hours GPs as at present. Secondly, NHS England will encourage national roll-out of the minor ailment schemes already commissioned by some CCGs. This is expected to be complete by April 2018.
We are confident that these measures can be implemented without jeopardising the quality of services. In fact, we believe the changes will improve them. To safeguard patient access, we will be introducing a pharmacy access scheme in areas with fewer pharmacies and higher health needs. We are today publishing the list of pharmacies that will be eligible for funding from this scheme. Copies are available on gov.uk and from the Vote Office. The list includes all pharmacies that are more than 1 mile from another pharmacy. Those pharmacies will be protected from the full impact of the reductions.
In addition, we will have a review process to deal with any unforeseen circumstances affecting access, such as road closure. We will also review cases where there may be a high level of deprivation, but where pharmacies are less than a mile from another pharmacy, if that pharmacy is critical for access. This will cover pharmacies that are located in the 20% most deprived areas in England, are located 0.8 miles or more from another pharmacy and are critical for access. Additional funding over and above the base settlement will be made available as needed.
We have already announced NHS England’s proposal significantly to increase the number of pharmacists working directly in general practice. A budget of £112 million has been allocated and will deliver a further 1,500 pharmacists to general practice by 2020.
As Members will know, the Government consulted the Pharmaceutical Services Negotiating Committee and other stakeholders, including patient and public groups. I am grateful for the responses that we received, which reinforced the value of community pharmacy and confirmed its front-line role at the heart of the NHS. The consultation also confirmed that there was a potential for the sector to add even more value. However, we are disappointed by the final response from the PSNC. We endeavoured to collaborate and listened to the committee’s many suggestions over many months, but in the end, sadly, we were unable to reach agreement. Ultimately, the committee’s role is to represent the business interests of its members, and I respect that. My role is to do the right thing for the taxpayer, the patient and the NHS.
Let me end by stating my firm belief that the future for community pharmacy is bright. These vital reforms will protect access for patients, properly reward quality for the first time, and integrate care with GP and other services in a far better way. That is what the NHS needs, what patients expect, and, I believe, what the vast majority of community pharmacists are keen to deliver.
Barbara Keeley (Worsley and Eccles South) (Lab)
I thank the Minister for allowing me advance sight of his statement.
Community pharmacies play a crucial role in our health and social care system: indeed, 80% of patient contact in the NHS is in community pharmacies. The Government’s decision to press ahead with damaging cuts which represent a 12% cut for the rest of the year, on current levels, and a 7% cut in the following year will therefore cause widespread concern and dismay. The public petition that was launched when the funding cuts were first proposed became the largest petition ever on a healthcare issue. It now bears 2.2 million signatures. The message is clear: people want their community pharmacies to be protected.
In the face of unprecedented demands on health and social care services, the importance of local pharmacies is greater than ever. They help to safeguard vulnerable people and signpost them to other services; they are very important to carers; and, crucially, they reduce demand on GPs and out-of-hours services. Do Ministers not recognise the extent of the support that those pharmacies offer, and the impact that their loss will have on communities?
As the Minister said, the Government’s latest funding offer was rejected by the Pharmaceutical Services Negotiating Committee, because it was clear that there was little substantive difference between that settlement and their original proposal in December 2015, and that the outcome would be the same. Earlier this year the Minister’s predecessor, the right hon. Member for North East Bedfordshire (Alistair Burt), said that up to 3,000, or 25%, of community pharmacies could close, and clearly the thousands of remaining pharmacies could be forced to scale down their services. If the Minister does not agree with his predecessor, will he now tell us how many community pharmacies he expects to close as a result of the Government’s cuts? Pharmacies that do survive the cuts will be under significant pressure, which will result in job losses and service reduction. That is putting patient safety and welfare at risk.
The Government’s plans are not only deeply unpopular; they are short-sighted, and will hit the areas with the greatest health inequalities hardest. A study by Durham University has shown that pharmacy clusters occur most in areas of greater deprivation and need. Will the Minister reassure us that the areas of greatest deprivation will not lose pharmacies on which they rely, and will not be disproportionately hit by the cuts? I was not reassured by what he said in his statement.
The cuts will have a significant impact on older people, people with disabilities or long-term illnesses, and, I reiterate, carers, who do not have time to look after their own health and often do not even seek GP appointments. The Minister has said nothing today about releasing an impact assessment. Given that the effect of the cuts is likely to be substantial, with rural, remote and deprived areas most affected, when will we see an impact assessment to justify them?
Community pharmacies help to relieve pressure on our already overstretched health and social care services, and in recent years they have delivered more than 4% of savings for the NHS in cost reduction and quality improvement year on year.
It seems to me that Ministers are ignoring the conclusion of a recent PricewaterhouseCoopers report showing that community pharmacies contribute a net value of £3 billion through just 12 of their services—not all of them; just 12. Therefore, if one in four community pharmacies were to close, that value would be lost and the cost to the NHS would be significantly increased. Has the Minister considered the long-term impact that that will have on other NHS services?
We know that there is concern in many parts of the healthcare sector about these proposals. Can the Minister reassure us that all parts of the health service, including NHS England, support the proposals? Earlier in the week, he said that no community would be left without a pharmacy, but he was then unable to say which pharmacies would close and where. Will he repeat the pledge that no community will be left without a pharmacy?
We recognise the need, as does the Minister, to integrate pharmacy services better with the rest of primary care, but introducing cuts on this scale to community pharmacy services will not improve health services—it will damage them.
David Mowat
Frankly, a lot of that was scaremongering, which does not help what we are doing here and does not help with some of the difficult decisions we have had to make. Those difficult decisions are directed at modernising the service, bringing it up to date, making it much more dynamic in terms of added value and less static in terms of dispensing and all that goes with that.
I will answer some of the specific points that were made. There is a full impact assessment and it will be released immediately after the statement.
The hon. Lady asked about the PwC report. I have said on the record on a number of occasions that the report is an excellent piece of work. It does drive home yet again the value of community pharmacies, which we on the Conservatives Benches and in the Government accept. What it does not address is the extent to which those services could be delivered for less cost to the NHS. That is what I have to address and that is what we have done.
The hon. Lady asked whether NHS England supports the changes we are making. She might have heard the comments made by Simon Stevens, but I will read out, in answer to her question, a quote from the chief pharmaceutical officer of NHS England:
“NHS England, as the national commissioner of community pharmacy services in England, can reassure the public that the efficiencies which are being asked of community pharmacy will be manageable and there is sufficient funding to ensure there are accessible and convenient NHS pharmacy services in every community in England.”
David Mowat
The answer to that question is, I do not know. It is possible that none will close. I do not believe that 3,000 will close. However, I would say this. The average operating margin that the pharmacy makes on the numbers that I quoted earlier is 15%. That is after salaries and rent. The cuts that we are making, or the efficiencies that we are asking for, are significantly lower than that. Of course there is no such thing as an average pharmacy, which is why I cannot guarantee that there will be no changes. What I can say is that, if there are mergers and if there is some consolidation, that demand does not go away—it goes to the other pharmacies in the cluster. To say that those pharmacies will be put under more pressure is plain wrong.
I say again that what we are doing is building an industry that is fit for the future, that is modern and that is adding value in a way it has not been able to do in the past.
Several hon. Members rose—
Mr Speaker
Order. Two points. First, Members who arrived after the start of the statement should not expect to be called. Secondly, there is extensive interest in this important statement—interest that I am keen to accommodate—but as I emphasised earlier there are to follow two heavily subscribed debates under the auspices of the Backbench Business Committee. Therefore, there is a premium upon brevity. We will be led in our brevity mission by one of the most senior and illustrious Members of the House, Sir Alan Haselhurst.
Sir Alan Haselhurst (Saffron Walden) (Con)
Does my hon. Friend the Minister acknowledge that the NHS has become such a part of the nation’s DNA that doctors’ surgeries are frequently overloaded, that absolutely the right way forward is to have a rational, well-spaced network of pharmacies and that that is of particular importance in rural areas?
David Mowat
I do recognise that. My right hon. Friend made the point that the network is well spaced and that rural areas are protected. I would also make the point that, as I said in my statement, we are recruiting a further 1,500 pharmacists into the GP network. They will also play a big part in that integration.
Mr Ben Bradshaw (Exeter) (Lab)
Are not these cuts the latest evidence of the unprecedented financial pressure the national health service is under? Is it not the case that cutting community pharmacy services is the very last place we should begin, as they take pressure off GP surgeries and hospitals and offer an excellent service? The Government should be investing more in them, not cutting them.
David Mowat
This year we invested a further £5 billion in the NHS, three times the rate of inflation. In June the OECD noted we are now above average in terms of NHS and social care spend in the OECD. However much we spend, it is right we look to do it as efficiently and effectively as possible, to modernise this service and make it better for patients, and that is what we are doing.
Anna Soubry (Broxtowe) (Con)
The Minister knows my views: I do not think this 4% cut is a wise move. But I do note—and it is important that everybody reports this accurately—that that money is going to stay within the NHS, so it is not a cut. Can the Minister assure us about any incentives for pharmacies in the delivery of public health measures, notably preventive measures?
David Mowat
I thank my right hon. Friend for that comment and reassure her that for the first time we will be allowing pharmacists to access a quality fund, which means that the average pharmacy could earn up to £6,000 or £7,000 over and above what it gets just for dispensing. The fund will include specific measures around public health.
Dr Philippa Whitford (Central Ayrshire) (SNP)
Thank you, Mr Speaker.
We discussed this on Monday and, as I pointed out, Scotland has had a national minor ailments service, a chronic medicine service and public health prevention for many years within community pharmacies, and we have found them to be very effective. Research showed they could cut 10% of the pressure on GPs and 5% on accident and emergency.
The problem with the Government’s proposal is that it is going to be a bit random; pharmacies are just going to be shutting on the basis that they cannot survive. Should there not be a planned system, to look at and discuss where they should be? It is not just a question of rural or deprived. It is also about transport; a mile away may be a real problem for those who are elderly and frail and for whom there is not a bus going in that direction. I welcome England taking forward these services, but my concern is the way in which it is going to be done; if it is just done due to cuts, it might not give England the answer it really wants.
David Mowat
I thank the hon. Lady for her point. She mentioned Scotland’s minor ailments programme. The announcement I made on that about a week ago was in many ways modelled on the Scottish model, because we know that pharmacies can do much more on minor ailments than at present. That will be commissioned separately from the other things we are talking about today, and paid for separately from the integration fund. We are a little behind Scotland in that regard, and we are going to catch up.
Michael Gove (Surrey Heath) (Con)
I congratulate the Minister on recognising what Labour failed to: that NHS money is taxpayers’ money and the priority should always be patient care, not the profits of private equity firms. May I further congratulate him on making it clear that those living in our most deprived communities will be protected and have services enhanced as a result of this change, and may I invite him to say more?
David Mowat
I will not say much more because of time constraints, but I thank my right hon. Friend for his comments. He is right to remind the House that this sector is quite concentrated towards public companies. That is not to say there are not some individual pharmacists that will be affected, but about 25% of pharmacies are owned by two or three public companies.
Kevin Barron (Rother Valley) (Lab)
I should declare my interest as chairman of the all-party group on pharmacy. I do not want to speculate about closures, as that has been done already, but if we get to a point where it might make sense for pharmacies to merge in different communities, my understanding is that the regulations are not yet in place for that. Is that true, and, if that is needed, when will it happen?
David Mowat
The right hon. Gentleman makes an extremely good point. They are not yet in place, but they will be by 1 December.
Mr Edward Vaizey (Wantage) (Con)
I congratulate the Minister on his statement. It is worth reminding the House that many urban pharmacies are located in clusters and are very close to one another. It is therefore quite right that we should look at how they are subsidised. I am pleased that, as a result of these savings, he will be looking out for rural pharmacies, which are more dispersed. They are the ones that really need the help.
David Mowat
The access scheme to which I referred will apply to rural and urban pharmacies. Indeed, there is more urban than rural in it, but it will protect rural pharmacies in the way my right hon. Friend mentions.
Norman Lamb (North Norfolk) (LD)
There is no escaping the fact that this amounts to a significant cut in prevention services, which is what always happens when the finances of the NHS are under pressure. I absolutely accept the need for reform of the financial incentives involved, to ensure that we get the best outcomes from the money being spent, but surely we should be investing more in prevention in order to ensure that the NHS is sustainable.
David Mowat
The quality system that I have mentioned is about potentially investing more in prevention and linking the best pharmacies—the high quality pharmacies—more closely to local authorities, public health schemes and all that goes with that. I make the point again that there is a requirement for efficiency savings, but we do not believe that they will affect access overall. We do not believe that this will affect the public’s ability to use pharmacies as they do now. This will be part of modernising and digitising the service and providing resources for other parts of the NHS that need them very much.
Alistair Burt (North East Bedfordshire) (Con)
Bearing in mind my responsibility for the difficult equation that my hon. Friend has had to solve by coming to the House this morning, I should like to thank him and welcome his statement, which finally brings clarity to these long discussions. Will he repeat very clearly the Government’s absolute commitment to a strong community pharmacy network and to doing all they can to ensure that the NHS delivers on the essential commissioning of quality services? Looking ahead to the future, now that we have got past this, will he ensure that a good review of community pharmacy services is carried out, so that we can see what value they bring to the NHS? I am sure that, like me, he will find that sector extremely valuable to work with.
David Mowat
I thank my right hon. Friend for his fantastic work with the pharmacy sector. He makes the important point that we are trying to move the sector more into services and added value. The two announcements that I made two weeks ago are part of that, as is the work currently being done by Richard Murray from the King’s Fund. That will inform how we spend the integration money and enable the sector to move more quickly into the sorts of services that my right hon. Friend is talking about.
Sue Hayman (Workington) (Lab)
Allison’s pharmacy in Cockermouth in my constituency helps to promote good health because it has a deep knowledge of the patients and their families. My concern is that, as a small pharmacy, it will be under more pressure from these cuts than the larger ones will be locally. Does the Minister recognise this pressure? Does he also recognise the vital community role that local pharmacies can play?
David Mowat
I repeat that we absolutely recognise the vital role that community pharmacies can play, and we want to make them move towards an even more vital role by providing more services, which is what pharmacies want to do, rather than getting all their money from their dispensing activities, as they do at the moment. High quality pharmacies will be in a position to really prosper in the new world that we are talking about.
Mark Pritchard (The Wrekin) (Con)
I warmly welcome the Minister’s statement. If there are closures, what additional support will be given to the pharmacies that are left, particularly to enable them to take pressure off GPs in the community?
David Mowat
The volume of business is gradually increasing. If a pharmacy in a cluster should close, that business will be redirected to other pharmacies in the cluster. They will then be in a position to expand, take on more people and all the rest of it.
Keith Vaz (Leicester East) (Lab)
I declare my interest as a type 2 diabetic and as chair of the all-party parliamentary group on diabetes. The Minister is wrong to say that Leicester has too many pharmacies. The fact is that the population demands those services. Instead of making these cuts, why does he not spend that £25,000 on diabetes prevention, thus saving the national health service a huge amount of money in the future?
David Mowat
I have never said that Leicester has too many pharmacies. What I said in answer to the urgent question was that one road in Leicester—Loughborough Road, I think—has 12 pharmacies within half a mile, and that is quite hard to justify.
As for the right hon. Gentleman’s other point about diabetes and long-term conditions, I mentioned the King’s Fund work being done by Richard Murray and addressing long-term conditions is the sort of value-added service that pharmacies need to provide in future. The £42 million integration fund that we have set aside will enable that to happen.
Nusrat Ghani (Wealden) (Con)
I welcome the news that this Conservative Government are spending £150 million more a year on pharmacies than the last Labour Government and will be paying pharmacies for not only dispensing prescriptions, but their quality of service. In Wealden, pharmacies have the double whammy of being rural and serving an older community, but they provide much-needed services and home deliveries. What news can the Minister share with me that I can share with pharmacies in Wealden?
David Mowat
The news that I can share is that pharmacies that are more than 1 mile apart from each other, many of which will exist in rural constituencies such as the hon. Lady’s, will be largely protected under the scheme.
Paul Blomfield (Sheffield Central) (Lab)
The Minister was right to describe community pharmacies as the essential front line of the NHS. What assessment has he made of the additional pressures and costs that will be put on other parts of the NHS as a result of this decision?
David Mowat
The King’s Fund study and the £42 million integration fund are directly focused on services and on enabling pharmacies to become more integrated with GPs. In addition, I repeat that 1,500 more clinical pharmacists than we have now will be working for GPs in 2020. That is a huge difference.
Wendy Morton (Aldridge-Brownhills) (Con)
I thank the Minister for coming to the House today and welcome his statement and update. It is right to consider improvements, but in doing so I urge him to ensure that the reforms are part of a broader policy on community pharmacies that seeks better to integrate with the NHS the vital services that they provide.
David Mowat
I give the hon. Lady that assurance. She used the word “integration”, which is right at the core of the proposals, as is modernisation. This is a patient-first initiative and we are going to make it happen.
Toby Perkins (Chesterfield) (Lab)
It is interesting that the Minister keeps referring to the evils of major chains, because it is impossible to listen to his statement and not realise that he is talking about supporting big pharmacies. Smaller pharmacies, which do not have such a wide patient base and do not offer such a wide range of services, will suffer. Does he acknowledge that small pharmacies will close as a result of the changes? Will he say more about where the savings will come from?
David Mowat
The scheme that we are putting into place is blind to ownership, so we will not take into account whether a pharmacy is a Boots, a LloydsPharmacy or something smaller. Given the gross margins that are currently being made by the average pharmacy, including smaller ones, I do not believe that the efficiency savings that we are asking for will cause widespread closures. It is scaremongering to imply that.
Richard Benyon (Newbury) (Con)
Those of us who represent constituencies with both remote rural and urban communities understand the difficult issues that the Minister and his Department have wrestled with. Does he agree that this decision is one that would have to be taken by whichever party was in government at the moment because it is right to ensure that the service is modern, efficient and that it represents security for people in rural communities?
David Mowat
Yes—modern, efficient and oriented towards excellent patient care.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
My constituency lies within the South Tees clinical commissioning group’s area, which is one of the pilots for the roll-out of the minor ailments service. The scheme was brought in due to the closure of minor injuries units at Guisborough and East Cleveland and medical centres at Park End, Skelton and Hemlington —all in my constituency. We are now seeing a shortfall in national vanguard funding for the minor ailments service and lack of GP provision in the region. What on earth is going on with primary care?
David Mowat
I do not wholly understand the thrust of that question. I assume that the hon. Gentleman, like others in this House, is welcoming the fact that we are rolling out a national system on ailments, delivered by pharmacists. As the hon. Member for Central Ayrshire (Dr Whitford) said, that is the future.
Helen Whately (Faversham and Mid Kent) (Con)
The Government are right to require pharmacies to make efficiencies, as the NHS is. I welcome the pharmacy access scheme, which I hope will help my local village pharmacies. I urge the Government and NHS England to press ahead with rolling out the minor ailments service, because it is important to make the most of the skills and capacity of pharmacies, in order to provide valuable services to patients and to relieve the burden on GPs.
David Mowat
I thank my hon. Friend for that comment, and I reinforce what I said earlier: NHS England plans to have this rolled out nationally by April 2018.
Martin Vickers (Cleethorpes) (Con)
I recognise the difficult decisions the Minister has had to make, but rural pharmacies are going to be particularly hit. He has attempted to sweeten the pill with his access scheme, but it is only a two-year scheme. What support will be forthcoming beyond that?
David Mowat
This is the first time ever that we have given pharmacies a two-year planning horizon; usually, these negotiations relate to a one-year period. After the completion of this period, there will be further negotiations, at which point we will take forward what is right to do.
Mr Steve Baker (Wycombe) (Con)
I congratulate the Minister on the way he has sorted out this mess. Is this unnecessary and wasteful clustering of pharmacies not a direct consequence of the former Labour Government’s broken payment model?
David Mowat
I am not sure that takes us forward, but it is right to say that spending NHS money on payments of £25,000 to many pharmacies within half a mile of one other is the wrong way to spend money when we need more in cancer drugs funds, in GP surgeries and in accident and emergency—that is what we need to be doing.
Edward Argar (Charnwood) (Con)
A large number of rural villages and small towns in my constituency are served by individual local pharmacies, which play an important role in the community. I welcome the Minister’s comments about the access scheme. Will he reassure me that small pharmacies in rural areas such as mine will be among those to benefit from the access protections he has outlined?
David Mowat
Yes, I can reassure my hon. Friend on that. Indeed, I can make the specific point that the 25% that make up the largest pharmacies will not be in the access scheme; it is directed more at smaller pharmacies.
Lucy Frazer (South East Cambridgeshire) (Con)
The Minister is right to identify that those areas with fewer pharmacies will benefit from protection, not only because the travel time to a pharmacy will be longer, but because the travel time to all support services will be longer. Will he therefore confirm that pharmacies in my rural constituency will benefit from the access scheme?
David Mowat
I do not have the specifics for my hon. and learned Friend’s constituency in front of me. We have published the full list and it is in the Vote Office, and I am sure that when she has a look at it she will find that some pharmacies in her area are protected.
Sir Desmond Swayne (New Forest West) (Con)
It is right to protect services by being more focused, but is there any other kind of commercial retail enterprise to which Government hand an establishment fee of £25,000?
David Mowat
Not that I know of, but there may well be. The facts are that the £2.8 billion that we currently spend is for services and for disbursing £8 billion-worth of drugs. It is a valuable service, but it is right that we look to see that that money is spent effectively and as effectively as in other parts of the NHS. It is the Government’s job to make sure that every penny that we give the NHS provides maximum value for patients.
Nigel Mills (Amber Valley) (Con)
May I declare an interest, in that my wife is a community pharmacist? I should therefore probably be cautious in welcoming this statement, for obvious reasons. Will the Minister confirm that the proposals to have a hub-and-spoke model, which would have been even more damaging to community pharmacies, are not part of this step forward?
David Mowat
I can confirm that no part of what we are talking about today is in respect of the hub-and-spoke model that my hon. Friend talks about.
Mr Speaker
I am most grateful to the Minister and to colleagues for their helpful co-operation in facilitating progress on this important matter.
Bill Presented
Housing Standards (Preparation and Storage of Food by Tenants in Receipt of Universal Credit or Housing Benefit)
Presentation and First Reading (Standing Order No. 57)
Frank Field, supported by Jeremy Lefroy, Caroline Flint, Dr Philippa Whitford, Sir Edward Garnier, Stephen Timms, Caroline Lucas, Sir David Amess, Tristram Hunt, Sir Peter Bottomley, Ruth Smeeth and Helen Jones presented a Bill to require landlords of tenants in receipt of universal credit or housing benefit to ensure that their rented accommodation meets minimum standards for the hygienic storage and preparation of food; contains adequate appliances, equipment and utensils for the cooking of food; and for connected purposes.
Bill read the First time; to be read a Second time on Friday 4 November, and to be printed (Bill 79).
Backbench Business
(7 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text
BHS
(7 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Speaker
I should inform the House that I have selected amendment (a), in the name of Mr Richard Fuller and others. In a moment, I shall ask the right hon. Member for Birkenhead (Frank Field) to move the motion. May I just emphasise that there are 14 Back-Bench Members who wish to contribute to the debate, and so even those who are not subject to a time constraint in any formal sense will doubtless wish to tailor their contributions to take account of the level of interest in the House?
Frank Field (Birkenhead) (Lab)
I beg to move,
That this House notes the recent joint Report by the Business, Innovation and Skills and the Work and Pensions Committees on BHS; endorses that Report’s criticisms of the governance of the company and of the holding company, Taveta Investments Limited; believes that the sale of the company to Retail Acquisitions Limited for £1 was clearly not in the interests of British Home Stores’ employees and pensioners; notes the failure of Sir Philip Green over many years to resolve the deficit in the BHS pension fund; and calls on him to fulfil his promise to do so forthwith.
May I thank the Backbench Business Committee for giving us the opportunity to have this debate? I do so on behalf of both the Work and Pensions Committee and the Business, Innovation and Skills Committee, because we are debating a two-Committee report.
In light of what you have just said, Mr Speaker, may I say that I know there will be lots of people wanting to intervene and, more importantly, wanting to contribute to the debate? While I am, of course, more than happy to take interventions, if those interventions could be ones that are genuinely inquiring or critical of me, I would be really happy for them to be fielded—no pun intended; sorry. On behalf of the two Committees, may I also thank our advisers and staff, including Adam Mellows-Facer and Chris Shaw, who were the two key people who guided our work?
I am mindful of your comments, Mr Speaker, and anxious that everyone can get in during this three-hour debate. I have four themes to touch on. First, what do I see as the main findings of our joint report, which was agreed unanimously? Secondly, from the base of a successful BHS in the initial stages, what was Sir Philip Green able to achieve? Thirdly, I want to comment on what I see as this sad, slowly unfolding Greek tragedy. Fourthly, because the work of this House is never done, what lessons might we draw from the report for our future agenda? In saying that, I do not wish to say anything—I am sure that this is true of other Members who wish to contribute—that will draw attention away from the central concern of this debate: the 11,000 workers who cruelly lost their jobs; the 20,000-plus pensioners who are now in real doubt about what size pension they will get, even though they contributed to a set promised pension; and how the public’s mind is affected by these operations, if they are an accurate representation of how we earn our wealth.
On the first theme, what do I see as the main findings of the report? Members will have their own views, and it will be great if they do as that will help us to build up a more comprehensive picture for the people who are following this debate. My first view, which was never knocked in any of our Committee proceedings, including our meeting with Sir Philip Green, is that literally nothing happened in BHS or Arcadia, and perhaps in much else besides, without Sir Philip Green deciding directly, or without people knowing what his mind was and that they would get his approval. Obviously I never knew Napoleon—given my age, Members might think that I could have touched the hem of the garment of Napoleon—but in my mind’s eye, this was a character most like the Napoleon whom I read about in history books when I was at school. As there is always pressure for history to be rewritten, particularly from those who think it treats them unfairly, it is important to remember that when Sir Philip acquired BHS, it was a relatively prosperous business that had a pension scheme in surplus. The idea that somebody, out of the goodness of their heart, was charging to the rescue of some mega-failing of British industry is not borne out by the facts in our report or those that anybody else has published.
Nick Thomas-Symonds (Torfaen) (Lab)
In light of the fact that the pension fund was left at the end with a £571 million deficit and the conduct of Sir Philip Green that my right hon. Friend has described, must we also look more broadly at corporate governance to determine how an individual was able to behave in such a way in this country?
Frank Field
That is a wonderful point to which I shall draw attention. I hope my hon. Friend and others will catch your eye, Mr Speaker, to develop that point.
John Glen (Salisbury) (Con)
I pay tribute to the right hon. Gentleman for how he conducted the inquiry on a cross-party basis. Given his depiction of Mr Green as a Napoleonic figure, does the right hon. Gentleman share my concern that although Mr Green came to the Committee in June and asserted that he would fix the problem, several months later that does not appear to have taken place? Mr Green is reported in the media as saying that he will do so in the next couple of days, but the situation is very irregular, given the authority that he seems to have.
Frank Field
Again, that is an incredibly relevant point, and it links to the previous one. We were certainly left with the impression that the problem would be sorted shortly. There is no concrete proposal on the table to bring justice to the pensioners, and a question of corporate governance is raised about how someone can take over a company with its pension fund in surplus and a good order book. An interesting aspect of Sir Philip’s evidence to us was that he said he could have annuitised all the pension liabilities when he took over BHS, but decided not to do so. Had he done so, we would not be in this position today.
Mr Dennis Skinner (Bolsover) (Lab)
Only a small point: this Napoleon thing has reared its head. I had always thought that Sir Philip Green was more of a Maxwell. He had the money and he had the yachts. He had the workers and he robbed them of their pensions. It is almost a parallel.
Frank Field
Sir Philip has threatened to sue me over my comments about that. I am still waiting for the writ to arrive. I long to be in court to have a trial by jury, but that will be for another day.
I return to what I see as the main findings. There was some pretty important engineering going on from the early years in respect of the profitability of the company. We were much amused in Committee when Sir Philip said that his business prowess extended to halving the cost of coat hangers. It would have been more interesting, of course, for him to have told us about his secret share dealing with one main supplier who during those early years, because they were party to BHS decisions, knew the costs of other orders for which tenders were coming in and was therefore able to bid accordingly.
I maintain that thanks to that measure, Sir Philip was able to get perhaps artificially low supply costs, boosting BHS profits during that period, so it looked even more profitable than it was. That individual shareholder, as I say, was involved in a secret share deal. When he came to sell his shares, he managed to sell them for £90 million. Going on from there, we know that this played a key part in allowing £400 million in dividends to be taken from BHS, which most observers would not necessarily have seen as anything extraordinary.
The next stage of this sorry saga—my second theme—is, what was Sir Philip able to achieve from that BHS base? Gaining ownership—control—of BHS allowed him to acquire the group of companies known as Arcadia. From Arcadia, he managed to sponsor a huge gearing operation. Was it £2.6 billion? Was it £2.9 billion? However, the key thing about the ownership of Arcadia, which came only from what appeared to be the adequate —or more than adequate—running of BHS, was that there were huge sums of money sloshing around Arcadia. All too soon, £1.3 billion of money geared—loans acquired—on Arcadia through a number of companies found its way up to Lady Green.
Charlie Elphicke (Dover) (Con)
I thank the right hon. Gentleman for giving way on this important point. Is that not the heart of the issue? The ability of corporate bandits to asset-strip in this way, leaving employees, pensioners and deferred pensioners in the lurch, is one of the key things that needs reform. It is one of the key reasons why people feel this country works for the Philip Greens of this world, rather than the working-class kids of Dover, Deal, Doncaster and Darlington.
Frank Field
Not for the first time, the hon. Gentleman reads my mind, because I wish to go on to that issue. Despite all the razzmatazz and so on, there was nothing that the Committee could find—no evidence of this was presented to the Committee—that showed that Sir Philip Green was king of the high street. He was, and is, a very successful traditional asset stripper, and I think that many people will want to develop that aspect of the debate.
Many of the workers in Arcadia must feel that they may stand ready to be pushed into the same hole as the BHS pensioners and workers. However, I think that a check has been put in place, and how that has happened is rather interesting. There was one of those wonderful moments during our hearings when one thinks, “Why is somebody telling me that?” Dominic Chappell—this triple bankrupt who was largely a creation of Sir Philip Green—told us that he had first refusal should the Arcadia group come up for sale, but that the only restraint was that Topshop would not be sold as part of that next sell-off. Of course, Topshop remains the crown jewels of Arcadia. It is the part of the Arcadia group that Sir Philip Green tried to take into America, and he succeeded. However, we now know that Sir Philip has had to sell part of his stake in Topshop to a company called Leonard Green—no relation whatsoever. It is inconceivable that that American financier would have agreed to buy into Arcadia without having the power to lock the tills, so the idea that the Arcadia companies, and particularly Topshop, will see moneys moving from them to the Green family has clearly been stopped.
Why, the House might ask, if that is the only part of Sir Philip’s empire that is making money, did he sell? It comes back to those mega-loans of between £2 billion and £3 billion. Recently, they have had to be refinanced. Given what our Select Committees have brought out, I think that Sir Philip had real difficulty finding a refinancing champion and had to give access to the crown jewels—Topshop—to refinance those loans, half of which probably went very quickly through a network of companies up to Lady Green and the Green family.
Let me move on to my third theme: the Greek tragedy that has unfolded before us. Sir Philip has many times made the criticism of me that I am biased and that in the very first interview that I gave on this issue on the “Today” programme, when I was asked the straight question of whether I thought he should lose his knighthood, I said yes. Now, perhaps I should not have been a politician—maybe I should have dissembled—but I actually answered based on what I then thought the evidence was, although I much wanted evidence to overthrow that original view. However, whether I had held that view either publicly or privately, as to the idea that the two Select Committees that this House selected to represent it on business and on work and pensions matters could somehow be manipulated by me—fine chance.
Mr David Winnick (Walsall North) (Lab)
My right hon. Friend should consider the criticism of him made by Green as a badge of honour. He and I differ on a whole host of subjects, but he and my hon. Friend the Member for Hartlepool (Mr Wright), who chairs the other Committee, have carried out their duties with distinction, and that should be recognised by the House.
Frank Field
I do not have time to go down that road, but I am really grateful to my hon. Friend. He always emphasises how much we disagree when he is agreeing with me, but I hope that does not mean that we both have re-selection problems coming down the tracks.
However, let me get back to this theme of Greek tragedy. We are dealing with a man who has tremendous wealth—it is difficult to comprehend what wealth he has. Yet, we know that he could have paid up—paid a modest amount, compared with that wealth base of £3.5 billion or whatever it is—and walked away smelling of roses. Not only that, but he would have helped the House, through our Committee system, to begin to set the debate about how we face the whole challenge of pension deficits—that new era into which we have come. That would have helped to answer the question raised by my hon. Friend the Member for Torfaen (Nick Thomas-Symonds): what lessons was Sir Philip drawing vis-à-vis corporate governance? In all those things, he could have been setting the debate. On pension deficits, and on the reform of private companies in particular, he has had nothing to say, but he could have helped us to lead the debate.
Charlie Elphicke
Is not that the heart of the issue? Philip Green says he is sorry, but it comes across as crocodile tears, because he will not put his money where his mouth is. He ought to make recompense.
Frank Field
Indeed. Whatever the legal issues, there is a mega, mega, mega-moral responsibility.
Let me conclude my third theme of this Greek tragedy. Here we see—we have seen him before us in this place—a man who has everything in life and risks losing everything important in life: his standing and how his friends regard him. He does so because he seems somehow unwilling to surrender a modest part of his mega-fortune, but that modest part would make such a difference to those pensioners who are still awaiting their fate.
I turn to my fourth theme: what is being tested through our report, starting with our debate today? First, Members will have a chance to comment on how two of their Committees have carried out their work. I really hope that Lord Pannick’s rather appropriately named report, which would begin the Americanisation of our Committee system in which we would have no role, because all the lawyers would just take over and we would sit there like puppets, will be strongly resisted. I know other Members will want to talk about this “judgment”, but Lord Pannick’s report has shown that if you pay a lawyer, and they are friends of yours, they will come up with the opinion you want. That report does nothing for the legal profession. It is interesting that within moments of publishing this supposed report, Lord Pannick had to admit that he was very close friends with two of the key players whom we examined in this undertaking.
There are clearly questions about the Pensions Regulator that people will touch on today and the Work and Pensions Committee will look at. Are the organisation’s legal powers up to the increasing challenge that it faces? Does it have the right staff? Is it run with the right culture, and if not, what needs to change? Of course, the latter would be much more difficult to deal with than changing legal powers or getting the right staff.
What are the lessons for the Government? My hon. Friend the Member for Torfaen (Nick Thomas-Symonds) has already mentioned one lesson, which I have now learned—perhaps I should have done so long ago. I had somehow thought that private companies govern the future destinies of only a few employees at a time. Wow, was I wrong about that, considering Sir Philip Green’s empire in BHS, with all those 11,000 jobs destroyed, and the jobs at stake in Arcadia? My hon. Friend’s point about corporate governance is mega. It is a theme that fits in with the Prime Minister’s wish that in trying better to protect the vulnerable, soft underbelly of British society, we must look at how capitalism behaves in this country.
I have two more brief points. First, how do we ensure the independence of the bodies that are put into operation to try to recover the assets of a company that has gone down like BHS? Very important questions have been raised in respect of the recovery operation for BHS. Secondly, if we needed to address the staffing, powers and approach of the Serious Fraud Office, given that we are still waiting to know how it is going to respond, how would the appropriate Committee, and then this House, do so in a non-threatening way?
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
My right hon. Friend is making a very good speech. He touched on the professional advice that was given to Sir Philip Green. Part of that issue is the ongoing problem that we have with how the big consultancies operate in our country—Grant Thornton in this case, and in others—and the fact that the Serious Fraud Office increasingly depends on those consultancies.
Frank Field
The quicker I finish, the quicker my hon. Friend the Member for Hartlepool (Mr Wright) will be able to deal with that matter and how his work on it has evolved.
This is the first time that I have stood before the House since I was elected Chairman of one of its Select Committees. I thank the House for electing me to that position. Despite the hard work, it has been a pleasure, particularly in relation to the work in which we, as comrades, have been involved during this inquiry.
Richard Fuller (Bedford) (Con)
I beg to move an amendment, at the end of the Question to add,
‘; and, noting that Philip Green received his knighthood for his services for the retail industry, believes his actions raise the question of whether he should be allowed to continue to be a holder of the honour and calls on the Honours Forfeiture Committee to recommend his knighthood be cancelled and annulled.’
I am fortunate to follow such a gracious speech by the right hon. Member for Birkenhead (Frank Field), and to move the amendment standing in my name and the names of 113 other Members of this House.
I took part in the inquiry into British Home Stores not only as a member of the Business, Innovation and Skills Committee but as someone who believes passionately in the good that business can do. I have seen in my own life, and in countries around the world, that the force of market economies helps everyone. It helps people who want to earn a living and build a future for themselves and their families, and it creates a stable basis for broader freedoms in society to take hold.
However, in the course of our weeks of inquiry it became apparent to me that when we look at British Home Stores in particular, and at corporate governance in this country more generally, we see that all the rules that help set the stage for our market economy presume that with the freedoms given to people who have enormous power over thousands of their fellow citizens, when times are tough, or when push comes to shove, those people will do not just the legal thing but the right thing—the honourable thing. To some people, “honour” may seem an unusual word to use with regard to business, but in an effective business, ultimately, honour is all that one has. A person can amass a great fortune, but in such turbulent times for the market, they can lose it in a day, and all they are left with is their honour. Underpinning the amendment is the need to gauge, from the specifics of our parliamentary inquiry into British Home Stores, not whether Sir Philip Green’s actions were legal but whether they were honourable. That is pertinent because he received his honour for services to retail.
In the course of our inquiry, a core issue was pensions. The right hon. Member for Birkenhead spoke in detail, as will other Members, about the shortcomings that have led to British Home Stores pensioners facing the prospect of lower pensions and the taxpayer facing the prospect of having to pick up the tab for the difference.
Another issue was the role of advisers. It was bizarre that among a fleet of well-paid advisers on a transaction, apparently the only voice that mattered was that of the adviser who said they were not an adviser. That may be okay if a person is dealing with just themselves and their family, but when they are dealing with people who are going to get up on Monday to try to earn a living in a shop, advice is important. We saw many times that the role of advisers was not just in giving advice; it was also in conveying an impression that this person was a person of substance. In an enterprise with £600 million of revenue, 11,000 employees, and responsibility for putting money into the pensions of 20,000 people, surely those running it should be people of substance—people with experience. What goes through the mind of a knight of the realm in saying that those livelihoods and those futures should be consigned to a three-time bankrupt? What goes through the mind of the owner of such a substantial business in thinking that the problems that he has faced, and found quite challenging, can more easily be solved by someone with zero experience of the industry that they are about to take on?
Margaret Ferrier (Rutherglen and Hamilton West) (SNP)
I was contacted by email by a constituent, Irene, who shared the following:
“I have two friends that worked in BHS in Glasgow and they are devastated at what has happened to them and their pensions. They worked there for years and don’t have much chance of getting another job or being able to build up works pension...This has happened to my friends and their colleagues all because he risked his worker’s pensions while he made huge profits. I feel that we most certainly should not be honouring people like that.”
Does the hon. Gentleman agree with Irene, and me, that this man does not deserve his honour after what thousands of hard-working people across the UK have endured?
Richard Fuller
I am very grateful for the hon. Lady’s intervention, and I absolutely agree. I would say to people who worked for British Home Stores and want to be sure that we are dealing with issues that are tangible for them, and who are perhaps worried that the knighthood is a separate question, that we are debating those tangible issues. We are talking about what happened to their pensions and the fact that many people lost their jobs. Nevertheless, a symbolic, but still quite tangible, step that we can take in this House is to conclude that, as the hon. Lady says, such behaviours do not merit the continuation of an honour.
In their response this week, Lord Pannick and his colleague talked about governance issues. We were shocked to see that the response said that it was technically not the responsibility of the board of a holding company to attend even a meeting that disposed of a subsidiary, with all those livelihoods attached to it. Not doing so may not have been illegal, but for Lord Grabiner not even to have attended the meeting where the business was disposed of to a three-time bankrupt strikes me as calling into question the character of the members of the board. What went through their minds so that they did not think that was the right thing to do? They were not supposed to sign people into the wilderness with the brush of a pen, and for a Lord to do that points again to the fact that honour has to mean something in the behaviour of our businesses.
I want the Government to consider some further points. I do not have an answer on the question of the payment of dividends when there are pension deficits, but we need to look at it. Another issue to consider is transparency in large private companies, compared with that in public companies. Should the role of chairman continue to be precisely the same as that of other directors, or should the chairman have a greater role and responsibilities? What are the responsibilities of advisers?
Colleagues in the House have spoken to me privately and said that they may well agree that Sir Philip Green is no longer deserving of the knighthood, but they are not sure that the House has a role to play in that. Respectfully, I disagree. We are here to assert a view on the opinion of the people, and I think it is perfectly valid that we should consider the issue in the context of our report. It is on our work that we are expressing a view. We do not make the final decision, but it is worthy and honourable for this House to have a view about Sir Philip Green. Over the summer, Sir Philip has had the opportunity to find his moral compass and do the right thing. In the absence of that, the House has no option but to support the amendment and the motion.
Mr Iain Wright (Hartlepool) (Lab)
It is a genuine pleasure to follow the hon. Member for Bedford (Richard Fuller), who played such an important part not only in the BHS inquiry but in all other inquiries carried out by the Business, Innovation and Skills Committee. I am really proud of the work carried out by the members of my Committee and the Work and Pensions Committee. We came together extremely well to work forensically and diligently on the hundreds of hours of oral evidence and to consider thousands of pages of written evidence. It is significant that the final report was agreed unanimously, without a single vote being required. Such work was made possible only because of the professionalism and hard work not only of the members of the Committees but of their Clerks. I am very proud of the report and stand by every single word.
What came out of the evidence was a story of massive contrasts and of huge inequality—of tens of thousands of low-paid workers, and those trying to get by in retirement on a small pension, losing out because of the greed of a very small number of people who enriched themselves and gorged on BHS to the tune of millions of pounds.
BHS folded this year, a year after Sir Philip Green sold it to Dominic Chappell, but its demise was on the cards a lot earlier than that. In the three-year period between 2002 and 2004, BHS Group paid dividends of £423 million, even though operating profit for that period was significantly less than that amount, at £325 million. In 2004, BHS Group had dividends of £199.5 million, which exceeded the group’s operating profit of £137 million for that year. The dividends of £199.5 million also coincided with a long-term loan of £200 million being taken out that year.
That dividend policy is revealing, and it set the scene for the eventual demise of the company. The payout to shareholders—predominantly the Green family—did not reflect a corporate turnaround and good transformation in business. BHS did not have the cash flow or the profits to fund the dividend. It denuded the company’s reserves and, in the case of that final dividend in 2004, had to be funded by a long-term loan.
Sir Philip could say, quite reasonably, as he did to the Committee, that he received dividends for only a short period of time early on in his period of ownership. It was a long time ago, that is true, but the dividend policy is crucial to understanding the whole sorry business of BHS and the wider lessons that we need to learn.
Green was to enrich himself, his family and his friends at the expense of long-term and sustainable growth for the company. Certainly profits were made, but they were more akin to a short-term sugar boost than a nutritious diet that aided the long-term health and strength of the business. Upon taking over the company, he was able to cut costs—an achievement that should not be easily dismissed—but he was never able to boost turnover throughout his ownership of BHS. So much for the king of retail.
It is true that Sir Philip Green owned the company for a total of nearly 15 years, and that he retained ownership a full decade after taking the last dividends. In that regard, he cannot be described as a short-term corporate raider. But raid the company he did, and his ability to do so meant that he was then in a financial position to obtain the debt to acquire Arcadia and, through the same modus operandi that he operated at BHS, pay his family the biggest corporate dividend in British history. He took the rings from BHS’s fingers, beat it black and blue, starved it of food and water and put it on life support, and then he wanted credit for keeping it alive.
BHS’s balance sheet was made considerably weaker during Sir Philip Green’s tenure of the company. His extraction of value early on in his ownership made the company less able to innovate, to retain a market share or to have a competitive place in the retail market that would allow the firm to generate profits and be in a better position to survive the growing pension deficit. That drip-drip decline provided the backdrop to Sir Philip’s wish to sell the business.
It would be difficult to come up with a more unlikely or incredible knight in shining armour than Dominic Chappell. He was a former bankrupt, with no experience either in retail or in running a company of any sort of comparable size to BHS. He was introduced to the deal by a convicted fraudster for whom he was carrying out driving duties. He boasted that he had senior retail figures on board for key roles in the new business, when that was not the case. He stated that he would be investing his own money in the deal and that he had £120 million of working capital available, when that was not true. His own investment bankers walked away when they discovered that he had lied about the nature of the deal.
Yet the due diligence carried out by the myriad advisers on the transaction did nothing to stop or even pause the deal. There was a remarkable amount of group-think among the supposedly independent advisers. Grant Thornton received four times the fee that it normally receives from similar transactions. Retail Acquisitions Ltd did not have the means to pay advisers for their services unless the deal with BHS went through. The fact that RAL did not have the cash to pay the invoices, let alone to provide the working capital for a loss-making £600 million business with a half-a-billion-pound pension deficit, should have rung alarm bells up and down the City as to whether the engagement should have been taken on. The fact that it did not clearly gives rise to questions about whether impartial advice was provided, or whether blind eyes were turned to ensure that the fees would be paid through a successful transaction, regardless of whether the company toppled over soon after that.
Goldman Sachs provided Sir Philip with “preliminary observations” and was not paid. The lack of any clear letter of engagement showed appalling levels of informality, given that tens of thousands of jobs were at stake. As the hon. Member for Bedford said, the fact that Dominic Chappell was able to say that Goldman Sachs was on board gave his bid credibility. There is a certain irony in the fact that the firm that was not paid, that had an ambiguous role in the transaction and that claimed that it was merely providing preliminary observations was the only one that really expressed concern about the transaction, noting that
“there were risks attached to the proposal in light of the lack of retail experience, the bankruptcy and the highly preliminary nature of the proposals and so on and so forth”.
Goldman Sachs’ attitude to document management seemed to be on a par with that of a dodgy and ramshackle cowboy operation, rather than that of supposedly the world’s premier consulting firm. If that approach was deliberate, in the belief that an informal approach to the transaction would exonerate it of any involvement, it was wrong. Although it was ultimately not responsible for the decisions taken—that was the responsibility of Sir Philip Green—its involvement mattered. It was up to its neck in it, even to the extent of offering a £40 million credit facility.
The risk to their reputation should have made those advisers think again. Much store is placed on the high-quality advice given by such advisers—certainly, in the case of BHS, the use of such prestigious names gave parties credibility and legitimacy when they should have had none.
This was all made possible by weak and incompetent corporate governance. We on the Committee saw opaque structures, overlapping board membership of a complex web of companies and ineffective leadership at board level. Lord Grabiner, chairman of the ultimate selling company, played no effective part. He was not present at, or even invited to, a meeting of the Taveta board that took the ultimate decision to approve the sale of BHS to Chappell. Lord Grabiner showed no curiosity in the deal. He was docile and demonstrated no effective scrutiny, challenge or leadership. That was indicative of a culture, common in corporate governance scandals, in which a domineering, overbearing and bullying individual was able to get away with things with little, if any, challenge.
That is a key reason for the Select Committee’s decision to undertake an inquiry into corporate governance. Given our experience with BHS, we want to look at whether company law is sufficiently clear on the role of executive and non-executive directors and whether their duties are the right ones. We are examining how the interests of shareholders and other stakeholders are balanced, and how decisions of boards could be better scrutinised and open to challenge. Given BHS’s status as a private, non-listed company, how should we align the corporate governance arrangements and requirements between listed and private companies more clearly, so that it is not in the interests of chief executives or directors to take firms private to hide them from effective scrutiny and transparency?
It may be argued that the Green family, as ultimate shareholders, could do whatever they wanted with BHS, and they did. But a company with tens of thousands of workers and former employees dependent on its long-term viability cannot be run as a personal fiefdom or a massive piggybank—even though BHS was run in that way—and corporate governance rules and regulations should, no doubt, be adapted to reflect that.
The duties of directors are somewhat vaguely defined. Section 172 of the Companies Act 2006 states that a director of a company must promote the success of that company in such a way as to have regard for
“the likely consequences of any decision in the long term…the interests of the company’s employees…the need to foster the company’s business relationships with suppliers, customers and others”
and
“the desirability of the company maintaining a reputation for high standards of business conduct”.
Mr Sheerman
The BHS employees who lost their jobs in towns such as Huddersfield say to me, “Why is it that the advisers, consultants and auditors who did not do their job in the banking crisis are, all this time later, still not doing their job as auditors and professional people?”
Mr Wright
As the hon. Member for Bedford mentioned, we need to look at more than just reputational risk. A lot of deals go through simply because such advisers are involved. Is that good enough?
To return to my point about directors, can anybody look at BHS and say that the spirit and the intention of section 172 of the 2006 Act were being enforced? In companies legislation, directors are equal in status, but in the corporate governance code, chairs and leadership are given much more priority. Given the shocking absence of leadership or challenge from Lord Grabiner, who was truly hopeless, and the weak and impotent corporate governance operating here, there is a strong case for enshrining the requirements of the code in legislation.
As the hon. Member for Bedford said, Sir Philip received his knighthood for services to retail. During our inquiry, however, it became increasingly evident that he was not particularly good at retail at all. True, he was able, in the early days, to sniff out a corporate bargain and cut costs to boost profit. There is nothing wrong with that; that is not a criticism. But during his ownership, he did not boost BHS’s turnover, he lost market share to more nimble and even to not-so-nimble competitors and he failed to anticipate the online retail revolution. By failing to innovate and invest in the brand, he made BHS—an important anchor in the high street—look like a remnant of the 1970s and 1980s in a cut-throat, competitive sector, where grabbing the customer’s attention and retaining their loyalty are paramount.
Sir Philip lacked the success, the ingenuity and the business acumen of the likes of Charlie Mayfield, whose John Lewis group responded well to the internet and whose employee ownership model genuinely motivates staff. He could not match the virtues of Zara, which has increased market share through its superfast turnaround from design to manufacture and shop, which is based on the use of customer data and local suppliers, the rapid turnover of stock and an innovative online platform. Based on company performance, people such as Charlie Mayfield and the founder of Zara, Amancio Ortega, should, it seems to me, be classed as the true kings of modern retail—not Sir Philip Green.
BHS is one of the biggest corporate scandals of modern times. I am sure that the whole House has sympathy for the thousands of workers and pensioners who have lost their jobs and seen their pension benefits reduced as a result of greed, incompetence and hubris. The reputation of business has been tarnished as a result of that greed. The vast majority of businesses are not run and managed in such a way. It would be wrong to tar all businesses with the same brush, but it is vital that this mess is sorted.
Mr George Howarth (Knowsley) (Lab)
I am grateful to my hon. Friend for the cogent way in which he has presented his argument. I have no difficulty in supporting the motion, which is in his name and the name of my right hon. Friend the Member for Birkenhead (Frank Field) and others. In principle, I agree with the amendment in the name of the hon. Member for Bedford (Richard Fuller) and others. My only question—my hon. Friend may be able to help me with this—is whether now is the right time to accept the amendment, or whether it should be left in abeyance until some of the other issues have been sorted out.
Mr Wright
Parliament will have its view on the knighthood. There is an urgent need to make sure that the pension problem is sorted. Sir Philip Green appeared before us on 15 June and said that he would sort it, but we are now four months beyond that. He is meant to be the consummate deal maker, who can buy and sell companies worth billions of pounds in a couple of days. If he is intent on sorting this, why has it not been done already? Regardless of what Parliament decides today, and regardless of the route taken by the honours forfeiture committee in respect of the knighthood, he has got a duty to sort this. Even at this late stage, Sir Philip should make amends for this whole sorry story and put right the wrongs that he engineered.
Several hon. Members rose—
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. Before we proceed with the debate, it is obvious to the House that we have a short time this afternoon. I expect this debate to finish at about half-past 2. I do not want to put a time limit on such an earnest, decent and well-mannered debate, and I hope that Members will restrict themselves to some seven minutes. If everyone who has indicated that they wish to speak does so for about seven minutes, everyone will get a fair and equal chance. If not, I will impose a time limit.
Jeremy Quin (Horsham) (Con)
It is a pleasure to follow the wise words of the hon. Member for Hartlepool (Mr Wright), and it was a pleasure to serve with him on the joint Committees. May I associate myself with the remarks that he and the right hon. Member for Birkenhead (Frank Field) have made about our hard-working Committee Clerks throughout the process?
When the news of BHS broke, I felt bad about the loss of a high street icon, desperate for the employees affected—including those in my constituency—and very concerned about the pensioners involved. I have a confession to make to the House, however. My gut reaction was that a Committee inquiry would simply rake over the ashes of a sad event, with little to be gained. I was initially not convinced that the inquiry would be productive, but I was persuaded to take part. I am glad that I did, and I am glad that this inquiry has taken place, because we can lay concerns before the House.
The largest concerns, for me, are not particularly about the trading circumstances leading to the demise of BHS—although it seems, as the hon. Member for Hartlepool has said, as though there was little magic around the revitalisation of BHS’s margins in the early years of its ownership by Sir Philip Green. Dividend payments, generous as they were and exceeding profits as they did, may or may not have undermined BHS through underinvestment. That would be hard to prove, but it is a perfectly sensible question to pose.
Ian Blackford (Ross, Skye and Lochaber) (SNP)
Should we not be raising questions if any company pays out dividends in excess of its free cash flow? That should ring alarm bells, and perhaps there should be a test that companies need to meet if they behave in such a way.
Jeremy Quin
The hon. Gentleman, as so often, reads my mind. If he is a little patient, he will hear me make a similar point later in my speech.
On the period during which very generous dividends were paid, directors cannot be expected to have the gift of prophecy, but they can be expected to understand the fundamental trends driving the underlying profitability and sustainability of their business. I am far from convinced that that was the case in this situation. The most serious questions, as raised by the hon. Members for Hartlepool and for Torfaen (Nick Thomas-Symonds), are about the corporate governance of large private companies with millions of employees and pensioners.
Unlike my feisty friend, my hon. Friend the Member for Bedford (Richard Fuller), I intended not to refer to the individuals directly concerned in the sad demise of BHS, but to focus on the more general lessons to be learned. I am afraid that I have been drawn back to the circumstances of BHS after reading the joint legal opinion produced for Taveta Investments Ltd by learned counsel last night. As the right hon. Member for Birkenhead said, the two lead QCs make a point of saying that they are friends of the chairman of TIL. I hope that their report, which is considerably longer than the report of the joint Committees that it analyses, was not unduly costly. The report basically starts by saying, “Let’s pretend this is not a parliamentary inquiry, but some other kind of inquiry. Would that type of inquiry be set aside by the courts?” Having set up an irrelevant question, the opinion produces an irrelevant answer.
Michelle Thomson (Edinburgh West) (Ind)
Does the hon. Gentleman agree that it is somewhat ironic for Sir Philip, who has complained bitterly about an outcome with which he does not agree, to be able to pay handsomely for an 81-page report from two eminent QCs, given that I imagine the pensioners and employees are not, unfortunately, able to resort to such a tactic?
Jeremy Quin
I suppose the answer depends on the quality of the report. Frankly, having read it, I find that it contains a series of straw men that have been set up for demolition. In my view, it does not help Members, the pensioners or anyone to understand the circumstances of the demise of BHS.
To put at rest the minds of learned counsel, the joint Committees did not object to a dowry being provided on the sale of BHS, and certainly did not question its legality. However, we questioned the sufficiency of the cash and the choice of partner in the circumstances that BHS faced. We did not question the concept of a company being sold for £1. Clearly, that is a matter for Taveta Investments (No. 2) Ltd, the selling company, which received the £1. It is unfortunate that TIL2, which is ultimately controlled by Lady Green, is still paying back to Lady Green the £200 million consideration for its acquisition of BHS in 2009. This consideration was satisfied by £200 million of loan stock provided to three overseas companies controlled by Lady Green, with a coupon of 8%.
We would need a much longer debate—I am very mindful that other Members wish to participate—to draw out all the straw men contained in the joint opinion of learned counsel, but several others are produced in the context of corporate governance. A rare point on which the joint Committees’ perspective seems to be shared by learned counsel is on the—in our view, lax—governance of the sale, as was so eloquently described by my hon. Friend the Member for Bedford. However, learned counsel state that that is an irrelevance, because the shareholders in TIL could in any event provide a direction, so the directors were in no position to prevent the sale of BHS to any party. That may be true legally, but it should raise questions for this House. Learned counsel tell us that TIL is 88%-owned by Taveta Ltd, a company registered in Jersey, and 12% by six minority shareholders. We are informed that the ultimate beneficial owner of the Jersey company is Lady Green, and that under the articles, Lady Green, acting with any one of the minority shareholders, could have directed the sale of BHS at any time and on any terms.
The right to own and dispose of property under English law is absolutely fundamental, and Parliament would be wise to tread very softly, but I am concerned in this context about checks and balances—not only on the sale, but more generally. What is the value of a section 172 provision, telling directors to have regard to other stakeholders, in these circumstances? What is the role and purpose of non-executive directors, especially when the 88% shareholder is not present around the boardroom table?
To my mind, it is not appropriate for directors serving private companies to decide that they can take an approach different from what is good corporate governance, purely because they can ultimately be directed. That would make it more important, especially on major or related transactions and on honouring commitments to pensioners, that they should bend over backwards to adhere to strong and demanding codes and be prepared to call out owners if they feel actions are taken that do not have sufficient regard to other stakeholders. There are thousands of very successful large and medium-sized private companies employing millions, and for those millions, ownership should be as transparent as good corporate governance.
There are other issues, from which I fear I have been sidetracked by the legal opinion, that the House should consider. As the hon. Member for Hartlepool mentioned, corporate governance codes should be applied not only to listed companies, but to those owned privately. On related party transactions, independent valuations or independent opinions are important when such transactions exceed de minimis levels. There is the issue of the utility of the requirement to have regard to other stakeholders in section 172 and how directors can be expected to do so when they owe responsibility elsewhere. There is the question of the appropriateness of dividend payments above certain thresholds, particularly if a pension scheme is in serious deficit. I was challenged on that point by the hon. Member for Ross, Skye and Lochaber (Ian Blackford).
There is the issue of the requirement for courts to be cognisant of pension deficits, as well as of creditors, when considering applications for corporate restructurings and capital reductions. In private mergers and acquisitions, where pension problems may be less transparent than in the listed market, consideration should be given to compulsory engagement with the Pensions Regulator and with the trustees. For both directors and advisers engaged in sale processes in respect of a company in which the Pensions Regulator has already expressed concern and a sale is not being pre-cleared by the Pensions Regulator, all parties should be very aware of the actuality of the counterparty to whom they are selling. English law requires no due diligence to be done on the buyer—nor, in my mind, should it do so—but common sense suggests a certain wariness to be wise.
In conclusion, there are lessons to be learned from this sad story. Above all, however, we are all focused on the loss of a well-loved icon, the employees who have been made redundant and the pensioners who are rightly worried, but whose plight may yet be mitigated by Sir Philip. Such an act would, indeed, be honourable and very welcome. I understand from the radio this morning that he is, not for the first time, planning to meet the regulators in the next few days. Time will tell whether pensioners have been waiting for a result or have been made to endure a particularly poorly directed “Waiting for Godot”.
Mr David Winnick (Walsall North) (Lab)
This is, indeed, a miserable business that we are discussing. We should not forget for one moment those who have been adversely affected—the 11,000 employees and the 22,000 pensioners, who do not know whether they will receive the sort of pension that they had the right to expect. One of the BHS stores was in the Walsall borough and, like the others, it has of course closed. The least that can be done is for Philip Green to act along the lines stated in the conclusion of this report—a satisfactory resolution to the problems of the BHS pension fund. As the report makes clear, there is no doubt that his massive private wealth should not in any way make that difficult for him.
I have risen to speak because I am very keen to support the amendment, which has been selected for debate by the Speaker. It is of course true that taking away Green’s knighthood, should it be recommended by the appropriate committee, will not make any financial difference to those adversely affected—they will not receive a penny more because the knighthood has been taken away—so why, if there is a vote, should we vote in its favour? I argue that for that honour to be taken away from Green would be a form of censure on him and, moreover, one that he would intensely dislike. As far as he is concerned, the removal of his knighthood would be far more of an indictment than all the words in the report we are discussing.
Mention is made in the report of the arrangements in Monaco concerning the business and tax. I am not entirely a stranger to those matters, because I raised the issue in a debate on taxes in the House in September 2012. I made the point then that although Philip Green undoubtedly pays his taxes in the usual way in this country—that is not in doubt and is not being questioned; he is not one of those who are not domiciled for tax reasons—that does not alter the fact that, in the main, the business is in his wife’s name, and his wife is resident in Monaco. That means that, in effect, the amount of tax paid on the vast business empire that Green is closely involved in—which, in common-sense terms, means he owns those businesses—is minimal. I find it difficult to understand how a person with tax arrangements like that, which are well known, well publicised and no secret at all, should receive a knighthood in the first place. That is a pretty damning indictment of what occurred, in my view.
As for Green’s vast amount of wealth, at that time I pointed out that he had paid himself a modest sum in bonuses that came to £1.2 billion—billion, not million. I do not know what other bonuses he has received since. Hardly a week goes by—some would say, hardly a day—when we do not pick up a newspaper and find details of his lavish lifestyle, which is a billionaire’s lifestyle if ever there was one. Is that not a form of provocation, apart from anything else, to the people who have been adversely affected, namely the employees and pensioners who have lost out and have a future of financial insecurity?
I will keep my remarks brief, and so say this in conclusion: I see Green as a billionaire spiv who should never have received a knighthood and who has shamed British capitalism. The least we can do today is to make our views clear and strong. Moreover, let us apply enough pressure, if that is not an inappropriate word, to try to persuade the appropriate committee that if there is one person who does not deserve a knighthood, it is Philip Green.
Richard Graham (Gloucester) (Con)
This debate has been called in several of our names, and I take particular pleasure in following the speeches of many earlier contributors, but especially those of the Chairman of our Select Committee, the right hon. Member for Birkenhead (Frank Field), and my colleagues on the joint Committees, the hon. Member for Hartlepool (Mr Wright) and my hon. Friends the Members for Bedford (Richard Fuller) and for Horsham (Jeremy Quin).
I will start by saying what the debate is not about. It is not an attempt to suggest that the deficit of any pension scheme in this land is entirely the fault of one individual, or, indeed, the responsibility of the owner of any sponsoring scheme. It is also worth noting that, of the some 6,000 defined-benefit pension schemes in the United Kingdom, about 1,000 are in difficulties of various kinds and very few indeed have surpluses. The situation of the BHS pension scheme is not particularly unique, but the circumstances around it are.
That brings me to my second point. The deficits of pension funds go up and down. They do so particularly quickly at a time when interest rates are moving fast. The value of assets is driven by bond yields; when those are depressed, and that is exacerbated by quantitative easing and monetary policy, pension deficits will clearly rise. All sorts of people are responsible for that, including the scheme’s investment policy makers and investment managers; the costs of all those involved make a significant difference to the scheme deficit as well. I totally accept the argument in the 80-page report by Sir Philip Green’s lawyers that longevity and the macro-economic environment make it difficult for schemes to improve their funding situation.
Ian Blackford
I agree with every comment that the hon. Gentleman has made, but does he not accept that part of the difficulty we are in with defined-benefit schemes has been the Government’s policy of giving responsibility to the Bank of England in the quantitative easing programme, which is now at £435 billion? If we look at what has happened recently, the 50 basis point reduction in yields means about £120 billion on the defined-benefit pension deficit. The Government have created that by refusing to balance fiscal and monetary policy.
Richard Graham
I do not remotely accept the argument in that intervention. This is not a debate about the Bank of England’s monetary policy. The hon. Gentleman would be well advised to read the transcript of the Work and Pensions Committee’s hearing with the Bank of England Deputy Governor three days ago, which I chaired in the absence of the right hon. Member for Birkenhead—[Interruption.] The hon. Member for Ross, Skye and Lochaber (Ian Blackford) is not paying attention, as usual. He would be well advised to read that evidence. Getting rid of quantitative easing will not solve the pension scheme problems, and, in particular, will not solve the problems of the BHS pension scheme. With his approval, I will return to the subject we are discussing.
Before the hon. Gentleman intervened I was remarking that the circumstances of the BHS pension deficit were extraordinary, and that is what I want now to come on to. The BHS scheme went from surplus to large deficit in about 10 years, without any clear plan or any really significant action by the sponsor, without decent relationships between the trustees and the sponsor, with conflicts of interest between some of the trustees appointed by the sponsor that they largely did not recognise during our inquiry, and with contribution holidays in the years when Taveta Investments, the owner of BHS, was taking out large dividends. All that cannot, by any stretch of the imagination, be described as best practice. The plan put forward to resolve the deficit—a staggered series of injections over 23 years—without any evidence of a long-term commitment by the owners to the company, is also not best practice. Our report highlighted that there was an issue with the regulator approving very long-term solutions.
Then we come to the moment of the sale of BHS, when information was withheld both from trustees and from the Pensions Regulator. There was a certain amount of dispute between the seller and the buyer about pressure on the buyer not to communicate with the Pensions Regulator at all, which was reiterated in further evidence submitted to the Select Committee only yesterday by RAL, the buyer. Most significantly, there was no attempt whatever at pre-clearance of the sale with the Pensions Regulator. Most shocking of all to many of us is the concept from both the buyer and the seller that in effect BHS was being sold debt-free, yet it had such an enormous pension deficit. That is at the very least disingenuous. It was naive of the buyer and cynical of the seller.
That brings us to Sir Philip Green himself. He said on 15 June:
“I want to respond to Mr Graham…We want to find a solution for the 20,000 pensioners. We still believe that money into the PPF does not resolve it. Without getting into it…the schemes are quite complex…We will sort it and we will find a solution. I want to give an assurance to the 20,000 pensioners—I am there to sort this in the correct way.”
With that, none of us could disagree. The question, of course—and this is why today’s motion and debate are important—is what has happened in the four months since. There has been some dialogue with the Pensions Regulator. That is absolutely clear. But the public want to know when this is going to be resolved. They are worried that after our report nothing is really going to happen and that an important and powerful man will not be held to account. Today is an opportunity for this House to stress our commitment to holding Sir Philip Green to account.
Andrew Bingham (High Peak) (Con)
I had a pension scheme collapse in my constituency about 12 years ago, the Federal-Mogul scheme. Schemes go into the PPF and there are assessments, and all the while that that is going on there is uncertainty. Does my hon. Friend not agree that Philip Green should deal with the situation as he has said he would—well, first of all he should have his knighthood taken away—because all the uncertainty impacts on those poor BHS pensioners?
Richard Graham
I am grateful to my hon. Friend, and that is why—I intend to finish my remarks on this note—today’s debate matters. It is not about grandstanding. It is not about Parliament trying to demonstrate moral superiority over the behaviour of individuals. What it is about, I believe, is to say three important things.
First, to Philip Green we are saying, “You made a commitment. We accepted it in good faith and we expect you to fulfil it.” I believe that waiting too long is damaging to his reputation, whereas a quick resolution would be extremely helpful to him. Secondly, the debate is a chance to say to the pensioners and the future pensioners of BHS, “We held this inquiry and we will not let you down.” Finally, it is a chance to say to the employees of other large businesses and the people of Britain in general, “We understand your resentment of businesspeople who run their businesses in cavalier fashion without due regard to your interests.” We have held a complicated inquiry that has held to account the powerful owners of BHS and their advisers. I believe the consequences of our findings will be heard by businesses and echo as cautionary tales for years to come.
Ian Blackford (Ross, Skye and Lochaber) (SNP)
It is a privilege to speak in the debate. I thank the Committees for the report and the right hon. Member for Birkenhead (Frank Field) for securing this important debate.
The issue of quantitative easing has come up, and I have to say that the powers of analysis of the hon. Member for Gloucester (Richard Graham) have somewhat deserted him today. He cannot get away from the fact that having had a quantitative easing programme of £435 billion, there is no underlying investment in the real economy. The only conclusion we can logically draw is that business does not have confidence in the economy, and that is why the interrelationship between fiscal and monetary policy is important. We need to get back to a balanced scenario in which interest rates reflect a normal economy. That is what the Government have to take responsibility for and that is what the hon. Gentleman seems to ignore.
The UK Government need to see the work of the Select Committees and the outcome of the debate as a lesson, and to acknowledge that we need to take action now that protects us all from outcomes that we have seen with BHS. The BHS pension scheme, representing 20,000 past and present workers, is in deficit by perhaps more than £500 million, meaning that scheme members face reduced entitlements. That is what should be at the heart of this matter. The reduced pensions of the workers and all those who lost their job should be what concerns us today. Why should pensioners be put at risk and fail to be protected from what is now fully acknowledged as corporate greed? As legislators, we all have to look at ourselves and ask what we could have done differently to have ensured that this situation did not arise in the first place.
This issue highlights the fundamental need to address the regulation of the pensions industry. Approximately 11 million people rely on a final salary pension scheme run by a private sector company. Schemes have come under increasing pressure as funding has become stretched, with about 5,000 private sector defined-benefit schemes now in deficit to the tune of more than £900 billion, according to Hymans Robertson. Despite the view that the hon. Member for Gloucester takes, we cannot escape the impact of quantitative easing and the lack of a balanced response from the Government. It defies logic not to have that.
As I highlighted on Second Reading of the Savings (Government Contributions) Bill, the previous Secretary of State for Work and Pensions, the right hon. Member for Preseli Pembrokeshire (Stephen Crabb), said in this House:
“there is a very real systemic issue with DB pension schemes that we need to look at, and my Department will be discussing it further in the months ahead.”—[Official Report, 11 July 2016; Vol. 613, c. 10.]
Since that statement, despite questions from the SNP, there has been silence from the UK Government. Where is the response to the fundamental challenges facing pensions today and what some might argue is a crisis for defined-benefit schemes? When will the Government face up to the challenges and threats to many who are beneficiaries of those schemes? When will the Government respond in detail to what the former Work and Pensions Secretary said was “systemic risk”? That was no throwaway line; a senior Cabinet Minister was admitting what we know to be the case. Does the Minister agree with that assessment given to this House and will she address the point this afternoon? What are the Government doing to deal with their own analysis of systemic risk? Sadly, I suspect the answer is still nothing.
Nothing is being done. The Government have been caught like a rabbit in the headlights—caught doing nothing in the face of systemic risk that threatens the interests of pensioners up and down the country. In the light of the Government sitting on their hands, I welcome the recently announced Select Committee inquiry to examine the adequacy of the Pension Regulator’s powers. That must be welcomed, but why should we be reliant on the Work and Pensions Committee? Why are the Government not doing their job and addressing this issue?
Scottish National party MPs will work to strengthen the powers of the regulator to ensure that the Philip Greens of the world are dealt with effectively when they seek to avoid their pension responsibilities. It is, however, a duty of government to protect citizens from undue pensions risk and the systemic risk to which the Secretary of State referred. Ultimately, defined-benefit pension schemes need to be placed on a sustainable footing and employees must be protected. I look forward to seeing whether the Minister responds to this when she makes her speech, but perhaps I should not hold my breath. More likely, she will have a Government briefing of handwringing, and then she will wait for the debate to end and scurry for cover. After all, we do not expect real answers from this Government.
Brexit means that pension disasters such as BHS and Tata Steel will be much more likely challenges for UK companies. Only when companies are able to afford to keep their promises to employees can pension funds be regarded as safe. Even large and successful companies can fail. The Pension Protection Fund offers help in such cases, but Cass Business School forecasts that up to 1,000 pension schemes could end up in the PPF over the next few years. There are more BHS disasters to come if that is correct. There will be a combined deficit of £45 billion, which would be overwhelming.
Let us try to take this out of politics. The SNP has long called for the establishment of an independent pensions commission to ensure that employees’ savings are protected and a more progressive approach to fairer savings is considered as we move to a period in which defined-benefit schemes are becoming a thing of the past. Why will the Government not do that? Why do we not establish a pensions commission that can consider all these issues in a holistic manner?
Let us come back to BHS—[Hon. Members: “Yes.”] Well, of course Government Members do not want to talk about the Government’s responsibilities, because they have run away from them. They can scoff and laugh, but 20,000 pensioners at BHS are going to suffer and thousands of people have lost their job while the Government looked on from the sidelines. That is the reality of this Tory Government.
Let us come back to BHS, perhaps this time without the laughter from the Government Members. I hope the BHS workers are watching the response of Government Back Benchers. How disgraceful; how contemptuous of people in this country!
Ian Blackford
I will make some progress and then perhaps I will give way—[Interruption.] I will give way in a second.
Philip Green’s weak apology is a case of too little, too late. He lined his pockets and did not stop to think about his employees. On Tuesday 18 October, Philip Green decided to say he was “sad and very sorry” for the hardship caused by the BHS collapse and that he still wanted to sort out the pension deficit. Green has still tried to defend the indefensible and duck his duties to workers by shifting the blame.
Jeremy Quin
I am grateful for being allowed to intervene on the hon. Gentleman. The point that Government Members are making is simply that we have heard a very long speech about systemic pension risk. That may be an issue, but it could be an issue for another occasion. The Select Committees produced a worthy report of more than 60 pages specifically about BHS. I am relieved that the hon. Gentleman is actually addressing BHS, the employees who have lost their jobs and the pensioners who have been left with less benefits than they should rightly have expected. I am delighted he is finally getting to that part of his speech. We look forward to the rest of it.
Ian Blackford
I thank the hon. Gentleman. I am aware of the time and I am about to sum up. The point I was making is that we have been put in a situation whereby workers have suffered as a consequence of the actions of Philip Green, but the Government must not think that they can walk away from their responsibilities to regulate business and pension schemes in this country effectively.
I recognise that Sir Philip owes it to the BHS pensioners to find an urgent resolution, but we need to look at corporate governance in the UK to see what can be done to offer protection from the kind of corporate excesses that have taken place with BHS. The Prime Minister has talked about doing that, so she should bring forward the proposals. While Philip Green’s hands are filthy, the Tory Government’s paws are not so clean either. After a lifetime of shying away from an effective crackdown on the corporate irresponsibility of the likes of Green, we are beginning to catch up in the United Kingdom. It is about time that the UK Government took action and the Minister gave us some answers.
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Margot James)
I warmly congratulate the right hon. Member for Birkenhead (Frank Field) on securing this afternoon’s very important debate. I thank him, the hon. Member for Hartlepool (Mr Wright) and both Select Committees for their invaluable work in exposing the governance and decision-making issues that have contributed to terrible consequences for so many people formerly of BHS.
Reading the report made me painfully aware of the responsibilities of directors. Under section 172 of the Companies Act 2006, directors must have regard to the long-term consequences for their company of their decision making, and they must consider the interests of employees and customers, and the impact on the community. BHS should have been making plans to mark its 90th anniversary in 2018, instead of which all its stores have now closed, and its employees—some, like Mrs Patel, are mentioned in the report—who had spent most of their working lives building the value of BHS have seen their careers end in redundancy and uncertainty, rather than the secure retirement to which they had been looking forward and had a right to expect.
Richard Graham
I simply want to say that it is wonderful to see the Minister in the Chamber today. She is absolutely not scurrying away from anything—I have never seen her scurry away from anything in her life. Does she agree that on a day when we are debating a Back-Bench motion arising from a report by entirely cross-party Committees, the members of which worked incredibly well together, it is really disappointing to hear the SNP spokesman acting like an agitated Humpty-Dumpty talking about monetary policy?
Margot James
I thank my hon. Friend for his intervention and for his work. Disappointed I may be, but not surprised. My thoughts—and, I know, those of Members of all parties—are with the ex-BHS workers, pensioners and their families.
We have heard about two owners of BHS: Philip Green, who bought the company for £200 million in 2000—it was profitable in the early years—and Dominic Chappell, who even Sir Philip in his ITV interview last week admitted had no retail experience, and was categorically the wrong buyer and the result of a horrid decision. In his powerful speech, my hon. Friend the Member for Bedford (Richard Fuller) laid bare the consequences of the decision to sell to Dominic Chappell.
A key theme in the report is the sharp contrast between the impact of BHS’s demise on workers and pensioners, and the payments received by senior executives in BHS and RAL and their advisers. The report also highlighted serious weaknesses, as has this debate, in the corporate governance of the companies concerned. The Government are very concerned about these issues.
The Prime Minister has already made it clear that we will review corporate governance, including further reforms on executive pay, as part of work to build an economy that works fairly for everybody, not just the privileged few, about whom we have heard so much this afternoon. Strong and transparent corporate governance is vital to provide trust in business and to foster good decision making by companies. The Government intend to consult later this autumn on options to strengthen the existing framework.
The hon. Member for Hartlepool made some salient points about the gap in governance between a public and a large private company. His Select Committee’s inquiry into corporate governance will provide an opportunity—
Hannah Bardell (Livingston) (SNP)
On a point of order, Madam Deputy Speaker. I thank you for indulging me and hope you will excuse my possible ignorance of the parliamentary process, but I am somewhat confused by the Minister’s responding halfway through the debate, before all Members have had the opportunity to bring forward the concerns of their constituents.
Madam Deputy Speaker (Mrs Eleanor Laing)
The hon. Lady has herself made clear in asking that question that she has not served for very long in this House, so no one would expect her to have a perfect knowledge of procedure. However, this is a Backbench Business Committee debate, so the Minister and the spokesmen for the two main Opposition parties can choose at what point they wish to enter the debate. The spokesman for the Scottish National party has already entered the debate, and the Minister has come into the debate now. The spokesman for the official Opposition will come in at a later stage. It is entirely up to them and to the occupant of the Chair as to when that happens. I want to ensure that there is enough time for the Minister to take on the points that have been made and those that will be made later in the debate.
Margot James
I was just coming on to welcome the inquiry into corporate governance announced by the Business, Energy and Industrial Strategy Committee, which I am sure will add to the evidence that we need to take sound decisions on how to strengthen our corporate governance framework for big private companies as well as for public companies.
On the vexed issue of BHS pensions, the fate of the pension scheme and the circumstances leading up to the current problem are of key interest to many, and especially to the ex-BHS employees and its pensioners. Sir Philip has recently been quoted as saying how sad and sorry he is for all the hardship and sadness caused to the people who worked there and the pensioners. He has said, too, that he is in a “very strong dialogue” with the Pensions Regulator to find a solution for the BHS pension deficit. In common with my hon. Friend the Member for Gloucester (Richard Graham), I urge Sir Philip to sort it out quickly so that the workers and pensioners can have greater certainty about their future pensions. Surely they deserve that much.
Alongside any discussions about a potential settlement, the Pensions Regulator has continued to investigate the handling of the BHS schemes. That has involved reviewing almost 100,000 documents, and it remains on course to reach a conclusion soon. As part of that, the regulator is considering whether it can use statutory anti-avoidance powers against a number of parties, and it expects to reach a conclusion in the coming weeks. Nevertheless, I recognise that the BHS case has generated much interest in the regulator’s role and powers and in whether they are sufficient.
Melanie Onn (Great Grimsby) (Lab)
Is the Minister aware of any formal proposal that Sir Philip has put forward to the Pensions Regulator?
Margot James
I am not aware of the specifics, but I thank the hon. Lady for raising that important point. I assure the House that neither the Government nor the regulator is complacent when it comes to the regulation of schemes or the powers needed to tackle and deter this sort of misbehaviour.
Margot James
No, I am going to continue.
If we need to bring forward further legislation in light of all the evidence, including that emerging from the BHS investigation, we will do so. In the meantime, we must allow the independent regulator the time it needs to prepare any case and to follow the statutory process wherever it goes.
Margot James
I will, but, mindful of the fact that many Back-Bench Members want to enter the debate, only for one last time.
Jim McMahon
I appreciate that. A great deal has been made of the need to wait for the regulator to come to a conclusion, but this is also about leadership. Will the Government show some leadership and clearly put on the table the view that the actions of Philip Green are not acceptable in a fair society, and condemn him on that basis?
Margot James
I sympathise with the strength of the hon. Gentleman’s feeling, but certain legal aspects may or may not arise in future, so I must be a little guarded in what I say. I hope that he will forgive me for that.
I assure the House that investigations of the conduct of BHS directors and the management of the pension schemes are well under way. The accelerated Insolvency Service investigation of the activity of former BHS directors is ongoing. It is one of the biggest investigations ever undertaken by the agency, and the Government have made additional resources available to support what we regard as vital work. If evidence is uncovered that indicates that the standards of any of the directors’ conduct fell below what was to be expected, action will be taken. The Financial Reporting Council has announced an investigation of the audit by PricewaterhouseCoopers of BHS’s accounts for the year ending 30 August 2014, and the Serious Fraud Office is continuing to review material and liaise closely with the Pensions Regulator and the Insolvency Service to identify any information that gives rise to a reasonable suspicion of serious or complex fraud.
I understand that Members and the public are keen to see the outcome of the investigations, as indeed are the Government, but it is vital for the investigating bodies to be given time to examine, consider and compile the significant body of evidence. These are very complicated inquiries, given the number of investigations involved and the complexity of the documentation that is being received. I assure the House that, should the evidence support it in the end, there will be enforcement, and action of a tougher nature will be taken.
That is all that I propose to say this afternoon. I look forward to hearing the rest of the debate.
Ms Karen Buck (Westminster North) (Lab)
I am proud to be a member of a Select Committee that was part of the joint Select Committee process that led to the reports that have brought us here today. I congratulate both Select Committee Chairs on their leadership over recent months, and on their excellent speeches today. I also commend the superb speeches that Conservative Members have made today. Ably assisted by our excellent staff, the Select Committees have conducted a robust, indeed truly forensic, inquiry into the BHS scandal, and I think that that has been good for the reputation of the House.
I do not have a cynical bone in my body, but even I am slightly taken aback by the fact that it was today’s debate on the Committees’ report that brought Sir Philip Green into the public eye again in the last week or two, most recently when he indicated that he was closer to making a settlement for BHS pensioners. I welcome that, but it does show that a report, and the business of the House of Commons, can have a direct impact on affairs such as those that we are considering.
I do not always agree with the new Prime Minister. However, when she was asked in a recent television interview, “What makes you angry?”, she was absolutely right to reply,
“the powerful abusing their position.”
As we have heard from Members today, that should make us all angry. The sorry tale of British Home Stores is an exemplar: it is a tale of someone who accrued staggering personal wealth but then failed to meet his wider obligations to the company that had enriched him; a tale that ended with 11,000 jobs lost and 20,000 people—including my constituents and those of many other Members who are present—facing cuts amounting to, in extreme cases, up to three quarters of their pensions.
Some of those people were approaching pension age, and, in the last years of their working lives, were unable to take action to remedy the shortfall in their income. They still do not know how much money they will be able to draw on in order to pay their mortgages or rents and live out the rest of their lives. That is absolutely shocking. People deserve security in their retirement, and when they are let down we should be very concerned. As our report makes clear—this is something that I think gets lost—the pension contributions that companies make are not charitable donations; they are the means by which employers meet their deferred pay obligations, and it is those that have been breached.
I know that Sir Philip Green feels much maligned by the Committees’ investigation of the BHS sale, because he made that extremely clear when he was in front of us, but until and unless he provides proper redress for the pensioners, he has absolutely no right to do so. We have heard from many Members today about the scale of the enrichment and the extent to which the company was milked for dividends during its profitable years in the early part of the last decade. It is not for me to talk about how the company’s assets proved to be less robust than had been expected, or how profits taken in the good years left the company more exposed to the subsequent tougher climate, because that has been well done by others. What concerns me is what happened to the pension scheme after it moved from the surplus that it was in when the company was bought in 2000 to a deficit of £345 million in 2015 and £571 million by the time of its collapse.
What we know is that BHS and Sir Philip Green refused to make the employer contributions that were necessary to secure the sustainability of the pension scheme over the year, which caused concern to the board of trustees. Dr Margaret Downes told us that she was sufficiently worried about the declining state of the scheme during the second part of the last decade to seek assurances from the company about its long-term commitment to the scheme, including payment of the requisite contributions. The assurances were not given, and the contributions were not made.
In the summer, Sir Philip Green told our Committees that he had no involvement in the discussions about the pension scheme before 2012. He claimed to be unaware of the problem, and basically blamed the trustees. He suggested that they had made “stupid, stupid, idiotic mistakes”, and had been “asleep at the wheel” of the pension scheme. He indicated that he would have been willing to make much larger contributions had he only been aware of the growing deficit. Our Committees were deeply sceptical about those comments.
During the now infamous summer evidence session—I believe that it was later to become a surprise YouTube hit—we were asked to believe that someone who had a reputation for the micromanagement of BHS had known nothing whatsoever about the state of the pension fund. When he did find out, of course, he became actively involved in trying to do something about it, and at one stage, as we have heard, that led to a proposal for an unprecedented 23-year recovery programme based on a contribution that BHS saw fit to make rather than one driven by the needs of the trustees. That ended in the sale of BHS and its subsequent collapse, and it constituted a lack of due diligence that even those with absolutely no understanding of business will know to be truly shocking.
Martin Docherty-Hughes (West Dunbartonshire) (SNP)
The hon. Lady mentions due diligence. When I attended the Committee sessions, it seemed as though the blind were leading the blind. This was bigger than just Green; the trustees’ lack of governance was extraordinary.
Ms Buck
The entire process of the lead-up to the sale to Retail Acquisitions Ltd, which involved a range of participants, was truly stunning in its lack of robust inquiry and checks. I hope that the lesson will be learned by all the agencies concerned, by Government, and by business. These are issues of judgment and personal responsibility as well as issues of law, all of which were sorely missing from that process.
It is little wonder, then, that Simon Walker, director general of the Institute of Directors, which is normally an assiduous defender of the free market, said that the circumstances of the collapse of BHS were
“a blight on the reputation of British business”.
British business has much to be proud of. As we have already heard, we want to have an environment in which business flourishes and risks can be taken. I completely endorse that. Sometimes, there will be failures. Indeed, pension funds have gone into deficit in many cases —BHS was not alone in that regard—but British business needs to ensure, and be part of a process whereby, its reputation as a whole is not sullied by the shocking and cavalier behaviour of some of the outliers, whether in respect of employment law or the handling of pensions.
In the past few years, and particularly since the 2008 financial crash, we have seen shockwaves of anger and alienation throughout our political system. That has been the case in much of the developed world. There is a sense that the game is rigged and that the wealthy and powerful have their own rules and are not held to account, whether for incompetence, greed or, sometimes, worse. The 2008 crisis highlighted that sense, but it did not begin there and it did not end there. There must be consequences for this sort of behaviour, for the sake of the reputation of good business. There must be consequences, otherwise Government cannot look themselves in the face. They cannot be held in high regard if they do not hold people to account. Those consequences must be proportionate and achieved through due process, but they must be there. That has been excellently set out by my colleagues on the Select Committees. They have set out the changes that are necessary in the law, in corporate governance and in the process by which dividends are paid out when pension funds are in deficit.
The House must scrutinise all those measures and consider introducing them. However, there must be individual accountability. What I want to see more than anything—more than further damage to Sir Philip Green’s reputation, more than his humiliation, more than the removal of his knighthood—is the money. I want the damage that has been done to his reputation in the Select Committee process and in this debate finally to bring him to the table to do the right thing, so that he can hold his head up high, the pensioners can get the deal that they deserve, and all of us who have been engaged in the scrutiny of the sorry tale of BHS will know that that work has been vindicated.
Amanda Milling (Cannock Chase) (Con)
As a member of the joint Committees that conducted the inquiry into the collapse of BHS, it is a pleasure to speak in the debate. It is also a pleasure to follow the hon. Member for Westminster North (Ms Buck), a fellow member of the Committee, and my hon. Friend the Minister, whom I welcome to her place. She had a slightly different role beforehand—she was my Whip.
Before being elected to this place, I worked in business. Like my hon. Friend the Member for Bedford (Richard Fuller), I am pro-business and pro-enterprise, but not at any cost. I have been appalled by the catalogue of events that led to the demise of BHS and by what we learnt in the Business, Innovation and Skills Committee about working practices at Sports Direct. Both are bad for business and, I am afraid, both are bad for the reputation of business, to pick up the point made by the hon. Member for Westminster North.
Rightly, reputable businesses have also been appalled by both situations. The irresponsible behaviours of a few endanger the reputations of the majority that operate responsibly. That is why I fully support the position of the Prime Minister and the Government that we need to make our economy work for everyone. As she said on the steps of Downing Street,
“we’re the party of enterprise, but that does not mean we should be prepared to accept that ‘anything goes’”.
That is not, as I see it, an attack on business—far from it. There is a desire to protect the reputation of business. After all, we do not want to see the irresponsible behaviours of a few tarnishing the reputation of good business. We need to look only at the banking crisis and the resulting lack of trust in banks, from which, let us be honest, they are still trying to recover, to see the dangers of reputational damage resulting from such events.
Michelle Thomson
I rise to note something on the banking crisis and to refer to the Minister’s remarks earlier. Does the hon. Lady agree that, with issues such as the banking crisis and how the state deals with the continuing RBS saga concerning the Global Restructuring Group, how quickly and effectively agencies deal with the matters that we call out is pivotal?
Amanda Milling
The hon. Lady makes an interesting point. She has a lot of personal interest in looking at RBS and the banking industry. From my perspective, the Government have been very quick in responding to the collapse of BHS and in recognising that there is a need to review corporate governance. I will come on to that in a bit more detail shortly.
The devastating events that resulted in the tragic collapse of BHS raise several questions about whether the framework of corporate governance is satisfactory, especially in relation to large private businesses—those with large workforces and large pension liabilities. This is about protecting our economy, protecting the taxpayer from picking up the bill and, most important, our responsibility to do everything we can to protect employees.
Many right hon. and hon. Members have discussed the consequences of the collapse of BHS. They have looked at the employees and the members of the pension scheme. I would like to focus on the employees. Eleven thousand people lost their jobs as a result of the collapse of BHS. But for those people it was not just about losing their job; it was about the impact on their lives and that of their families. Many of those people have mortgages to pay and are worried about whether they can keep a roof over their head and that of their family.
Richard Fuller
May I echo what my hon. Friend is saying? My right hon. Friend the Minister for Apprenticeships and Skills, who cannot be here today, mentioned to me that the BHS store in his constituency was for many years one of the most profitable BHS stores, but no due regard was given to those employees or pensioners. They were essentially cast aside, as everyone else was. The impact is being felt throughout the country—in town after town, store after store.
Amanda Milling
I thank my hon. Friend for his intervention. He makes an important point. The stores are across the country. I do not have one in my constituency, but many right hon. and hon. Members do. Hundreds of people were employed at each store.
As I said, this is not just about the employees; it is also about their families. Far more people than the 11,000 employees have been affected by the collapse of BHS. As the hon. Member for Rutherglen and Hamilton West (Margaret Ferrier) mentioned, the effect has been devastating. This has been a horrid period for the people who no longer have jobs at BHS and are facing difficulties in finding new employment.
Alison Thewliss (Glasgow Central) (SNP)
I agree with the case that the hon. Lady is making. Does she agree that not just the people in the stores who were directly employed by BHS, but the catering and cleaning staff and everyone in the supply chain will be adversely affected?
Amanda Milling
The hon. Lady makes an incredibly valuable point. It is about the supply chain. Recently, Rugeley B power station shut in my constituency. That affected not just the employees but the contractors and the wider supply chain. It had a real knock-on effect.
The joint Committees’ inquiry has highlighted that the events that led to the collapse of BHS suggest the need to review the regulation on corporate governance, particularly with regard to large private businesses. The inquiry has also suggested that there is a need to create a more level playing field between large private and publicly listed companies in terms of transparency and codes of conduct. As the hon. Member for Hartlepool (Mr Wright), the Chair of the BIS Committee, has mentioned, it will be conducting an inquiry to look at corporate governance and the roles and responsibilities of directors, addressing the issues that have been highlighted in the BHS inquiry.
I am pleased that the Government are committed to reforming corporate governance. It is clear that we need to review the practices of large private businesses, the role of directors in decision making and the responsibilities of directors to consider how they protect the interests of their employees and the members of their pension schemes. Therefore, I welcome the Minister’s remarks and I hope that she and the Government will consider the inquiry’s observations and recommendations and the points made by right hon. and hon. Members this afternoon.
To conclude, we have a responsibility as policy and law makers to learn lessons from the collapse of BHS. I look forward to the Government publishing their consultation this autumn.
Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP)
I thank the right hon. Member for Birkenhead (Frank Field) for introducing this important debate and pay tribute to the cross-party Members involved in the Committee reports, including my hon. Friend the Member for Edinburgh West (Michelle Thomson).
In July of this year, the British Home Stores shop in my constituency closed. The long-standing store was the third largest retail unit in our East Kilbride Plaza mall. The store did avoid the first round of closures, but staff were left with huge uncertainty about what would happen in the interim, and it was eventually closed. That was a very sad day for staff and constituents. I have frequented the store since childhood and walking by the empty unit is still strange and a stark reminder to our community of the injustice that unfolded and the loss of jobs and pensions.
While our local staff oversaw the closure of our BHS, former owner Sir Philip Green reportedly continued his Mediterranean holiday aboard his £100 million superyacht. I understand that he owned BHS for 15 years before selling it to Dominic Chappell for £1 in 2015. Sir Philip Green has rightly come under fire for taking a massive more-than-£400 million in dividends from the department store chain and selling it in such a manner to a man without retail experience. A damning report from the Business, Innovation and Skills and the Work and Pensions Committees found that BHS was subject to systematic plunder by Green and Chappell and labelled Green the “unacceptable face of capitalism”.
These constituents of mine lost their jobs and pensions. The ordinary people are the losers. They gave their service and good faith both locally and to the company. So real questions must be answered by this House on multinational corporate governance structures and pension regulation. The UK Government must take action and not allow such situations to be repeated in the future.
We in this House must tackle asset stripping. The current situation does not protect working people—those who have families to look after, those who have people to care for and those who have done the right thing and have contributed to pensions and to society only to be taken advantage of and be failed. SNP MPs will work to strengthen the powers of the regulator, to ensure that the Philip Greens of the world are dealt with effectively when they seek to avoid pensions responsibilities.
There is a real need to address inequality and to work with businesses and industry to provide appropriate regulation. Many of my affected constituents have contacted me to ask that Sir Philip Green be stripped of his knighthood; his keeping the title adds salt to their wounds and the injustice of this situation.
Margaret Ferrier
Does my hon. Friend agree that, although Sir Philip deserves to be stripped of his knighthood, we also need to address the very real issue that exists: that of all the Philip Greens of the world being able to treat workers in this manner? They need to be made an example of by the Government.
Dr Cameron
I agree. Workplace regulations should be addressed.
A further matter to be addressed in terms of Sir Philip Green’s knighthood is whether his actions were honourable. Both I and my constituents say no.
I conclude by requesting that the House support the amendment and take appropriate action. We should demonstrate to the constituents of East Kilbride, Strathaven and Lesmahagow who have been so badly affected that we hear and heed their voices and fully support them at this devastating time.
Michelle Thomson (Edinburgh West) (Ind)
I would like to begin my contribution to this important debate by joining others in thanking the Chairs of the combined Select Committees and pointing out that any suggestion that their report was not a robust, detailed, evidence-led inquiry can be rebutted. It ran for months and had many sessions; the session with Sir Philip Green alone lasted for six hours.
I support the view that, from its initial purchase, Sir Philip saw the dash for cash from the business as the Green family’s primary purpose. Even in the early days, there was limited evidence of a successful retailer improving turnover or market share. I am sure other Members will continue to highlight the various ways that money was redeployed to the Green family, often away from the clutches of the UK taxman, such as by the payment of dividends and the treatment of various assets. I have no doubt that they were all entirely legal, but were they irreproachable?
We have heard much already about the nature of corporate governance. Our report describes it as having a variety of roles, including balancing
“the interests of…many different stakeholders”.
We have also heard reference to the UK corporate governance code. It states that
“one of the key roles for the board includes establishing the culture, values and ethics of the company.”
Roger Mullin (Kirkcaldy and Cowdenbeath) (SNP)
I thank my hon. Friend and all the members of both Committees. I had the pleasure of sitting in and listening to quite a lot of the interrogation and I thought it was first-class.
Despite the problems we have heard about, such as those to do with corporate architecture and regulation, does my hon. Friend agree that Adam Smith was right when he said we cannot divorce business practice from human behaviour, and that the problem here is that the human behaviour of Philip Green has undermined corporate governance and any positive culture?
Michelle Thomson
I thank my hon. Friend for that intervention. The code goes on to say in the sentence I was quoting:
“The directors should lead by example and ensure that good standards of behaviour permeate throughout all levels of the organisation.”
The code applies only to listed companies with a premium listing of equity shares, but that does not absolve a private owner from any responsibility. Time and again opportunities were missed to address the growing pension deficit and it cannot simply be argued that the deficit was a result of the global financial crisis and increased longevity. Sir Philip had accountability for addressing the deficit and could have chosen to do so on a number of occasions, as other schemes managed to do.
The QCs’ report cites many examples of the Green family’s legal rights as the majority shareholder, but says very little about the responsibilities to pensioners and employees that that brings. I am sorry, but Sir Philip cannot have it all his own way. It was a lack of judgment that allowed the pensions situation to continue, and a lack of judgment that progressed a sale to a wholly unsuitable third party.
The non-executive chairman was at pains to point out that the code does not apply to private companies, and the QCs’ report notes that the chair of the board has merely the same duties as the other directors. Legally that is true, but might I inquire as to what exactly the remuneration of £125,000 as chair of the board was for? I support the suggestion of the governing body for governance, the ICSA, which suggests reforming the code to include private companies. We have heard a number of calls for that today.
In terms of the general culture of organisations, there is always a key risk if a level of power is concentrated in just a few key individuals, there is weak leadership which chooses to surround itself with people who are reluctant to disagree for fear of falling out of favour, and there are cultural failings within the organisation that are common knowledge but remain unchallenged. We all have a duty to speak out in these cases, because by remaining silent we become complicit in the contract of the bully and the bullied.
In the case of BHS, the final decision on sale was made without the non-exec chair asking about the credentials of the purchasing company, why it was believed to be the best outcome for the employees and pensioners, or whether the third party had a credible turnaround plan—and, incredibly, they were not invited to the ratification meeting. There was only one non-exec director at the meeting: the son-in-law of Sir Philip Green, whose stated brief was to represent the interests of Lady Green.
I challenged some board members to name a time—any time—when they successfully challenged Sir Philip Green. Their response was muted. I could literally count the seconds ticking by as each respondent looked for an example.
Our report notes that
“absolute power, in business as in politics, is a dangerous thing”.
It was certainly absolute power that enabled Sir Philip and the Green family to run BHS as their personal fiefdom, to exclude independent directors from key decisions and to bully weak senior managers, and this contributed to the ultimate failure of BHS and to its ultimate failure in its duty of care to the pensioners and employees.
I shall finish by making a brief comment about the amendment. This UK legislature is already struggling to demonstrate its relevance to many people. It must be able to give a voice to people on the important issues of the day. The saga of BHS is being played out in the media, and not only recently. We have seen the success story, the “loadsamoney” parties, the knighthood, the record-breaking dividends, the decline and the eventual sale of the business. People watching at home have, with every justification, asked, “How can this be? How can an owner of a company act with such impunity in the matter of 11,000 jobs and 20,000 pensions?” Hindsight is a wonderful thing, and who among us does not recognise circumstances in which we would do things differently? I am sure Sir Philip Green regrets the circumstances now, but we are talking about a knight of the realm, and that position must surely require a higher bar of ethical behaviour.
Joanna Cherry
(Eningburgh South West) (SNP): My hon. Friend is making a powerful speech. Has she, like me, received dozens of emails from constituents who are concerned that Sir Philip Green should be held up as an example? I shall read out just one of the emails I have received.
“As someone in business, who takes pride in the efforts we make for our staff and customers, it’s really hard to understand why someone like Sir Philip would be allowed to retain his knighthood. Surely, we should not be placing such traits as aspirational for the public.”
Does she agree with that sentiment?
Michelle Thomson
I absolutely agree. Many of us will have received hundreds of letters and emails from our constituents on this subject.
It is on this point that the argument turns for me. The corporate governance code is not there to provide a loose set of rules that companies are invited to think about now and again. It is fundamentally a framework for behaviour in business. Business is not just about the bottom line; it is about providing jobs and sustaining communities, and the best businesses are based on partnership. Sir Philip Green knew for many years that BHS was in trouble and he failed to do the right thing. His actions, and his inaction, led directly to the loss of 11,000 jobs and affected the lives of 20,000 pensioners. He seems to believe that BHS being a private company negated any accountability or responsibility for the lives of people who depended on him and, ironically, who made his success.
Martin Docherty-Hughes (West Dunbartonshire) (SNP)
It is lovely to see you back in the Chair, Mr Deputy Speaker. I can advise you that I will not be as loud as I was last night.
I stand to contribute to this debate in unfortunate circumstances, in that, like many colleagues in the Chamber, I speak on behalf of a number of constituents who have been profoundly affected by the collapse of BHS through loss of employment and uncertainty over their pensions. Before I proceed, however, I would like to put on record my thanks to the Chairs of both Select Committees, particularly the right hon. Member for Birkenhead (Frank Field), who has had to undergo public vitriol from someone who clearly does not deserve a knighthood. He is to be commended and very much thanked. I also thank my hon. Friend the Member for Edinburgh West (Michelle Thomson) for her determination to continue her work on the Select Committee.
My constituency was home to a BHS store in my hometown of Clydebank for nearly 40 years, and the day the store closed for good was the end of an era and a sad day not only for the community but, more critically, for those who had given loyal service to a company that did not value them in return. When the collapse of BHS became public and the announcement was made that stores, including the one in Clydebank, would be closing, I visited the store to offer my support and to hear the staff’s concerns for the future. As I am sure many Members will recognise, such visits are never a pleasant experience, and genuine concern was expressed about what the future held for them.
It was at that time that the true picture began to emerge of the handling of the BHS pension fund and of the existence of a massive deficit of nearly £500 million. For the staff who had contributed to the pension scheme and who had just found out that they were to lose their jobs, the bewilderment and shock that this situation had been allowed to occur was undeniable. This situation has filled me with anger over the injustice to all those who believed they had a secure future in older age, only to have it announced that they could lose up to 10% of their pension when reaching pensionable age.
I was heartened to hear in the House today that there might be some resolution in this regard, and I hope that it comes quickly. Nevertheless, it is completely unacceptable and a downright disgrace that the staff—the majority of whom, critically, are women—have found themselves in this predicament. I would go so far as to say that it has been nothing short of criminal. The professional and dignified manner in which the staff behaved stands in striking contrast to that of Mr Green and his dodgy cohort of warmehrs, including the trustees, who are all culpable in this debacle. They should be ashamed of themselves for the manner in which they have behaved, but sadly I suspect that they are too busy quaffing their champagne and sailing to Monaco on their yachts to give a damn about the mess they have created.
I would like to take this opportunity to praise the store management in Clydebank, local organisations, the local authority—West Dunbartonshire Council—the Department for Work and Pensions and Scottish Government agencies such as Scottish Enterprise, which worked in concert to assist the staff when they found themselves seeking alternative employment. I was informed recently that every member of staff who sought alternative employment was given the support and advice required to be successful in their application, which was a great relief to me and I am sure helped the staff and their families to sleep a little better. This is an example of all levels of government coming together and using whatever levers they had at their disposal to counter the adverse situations that our communities face. I am full of praise for the organisations that helped to deal with the impact and aftermath of the BHS debacle, but serious questions must be asked as to why this situation was allowed to unfold in the first place.
Alan Brown (Kilmarnock and Loudoun) (SNP)
My hon. Friend has encapsulated the human element of this situation fantastically well in his description of the people working for BHS. I commend him for that. I too had a BHS store in my constituency, and many staff members lost their jobs and had their pensions affected. Another aspect of this involves the buildings. Kilmarnock now has another building on its high street with a “To Let” sign on it. That affects the surrounding shops and the footfall to them. The effect on surrounding businesses is another consequence that has not been considered.
Martin Docherty-Hughes
I agree with my hon. Friend that that affects constituencies the length and breadth of the UK.
I would like to commend the recent joint report by the Business, Innovation and Skills Committee and the Work and Pensions Committee, which looked into the Pension Protection Fund, pension regulation and the sale and acquisition of BHS. The report should make uncomfortable reading for those involved in the governance of the company. On many occasions, I watched and listened to the Committees’ proceedings from the Public Gallery. The report must be acted upon by the Government, and I ask the Minister to confirm that this will happen as a matter of urgency. The Government must now show real leadership in tackling this problem. The laissez-faire policies of the UK Government must be consigned to the 19th century where they belong—along with Philip Green’s knighthood.
Words are no longer acceptable; action must be taken now or we will be in danger of more companies going the same way as BHS. That would have serious and profound consequences for our economy, which, due to the ongoing uncertainty over Brexit, is already under serious pressure and struggling to cope. Without action, the Philip Greens of this world will continue to undermine public confidence in private business and have a serious impact on private enterprise. Simon Walker, the director of the Institute of Directors, has stated:
“The reputation of corporate Britain has not recovered from the financial crisis and there are important questions that need to be addressed on issues including transparency, executive pay and board diversity.”
We cannot allow business to mess about with the people’s future income, and the UK Government must up their game on pension regulation, and indeed on pensions altogether—but that is for another debate entirely.
I very much welcome the announcement of a further inquiry by the Work and Pensions Committee, which will look at the adequacy of the Pensions Regulator’s power to deal with issues such as these and at how best they can be prevented from happening again. I fully support the strengthening of the regulator’s powers as a means of ensuring that no one is able to avoid their pension responsibilities, and I know that my Scottish National party colleagues and I will be working hard to make that a reality. I therefore await the Work and Pensions Committee report with great interest and hope that it concludes that the regulator should be in a strong position to protect employees from their rogue bosses.
Turning to the amendment calling for the Honours Forfeiture Committee to strip Philip Green of his knighthood, central to my contribution in this debate has been the welfare of those who have been adversely affected by Mr Green’s actions and also that the Government must get to grips with unscrupulous businesspeople to ensure that this does not occur again. I well understand the frustration and anger directed towards Philip Green. Indeed, I have already made my feelings towards this individual known during this debate, and it is right that we should seek to inform those with the authority to do so to strip him of his honour. Following my participation in the debate on the House of Lords debate last night, it should come as no surprise that I am no fan of an honours system.
Finally, we owe it to the British BHS workforce to hold Philip Green to his promise to resolve the deficit in the BHS pension fund. I am making a personal commitment to my constituents that I will not stop fighting for them until the matter has been resolved and they receive what they fully deserve.
Hannah Bardell (Livingston) (SNP)
Having listened to colleagues and read the conclusions of the report by both the Work and Pensions and the Business, Innovation and Skills Committees, two principles come to mind that cut to the core of the debate. What we have seen from Sir Philip Green and the collapse of BHS is a lack of responsibility and, moreover, a lack of respect. I commend both Committees, their members and their staff for a comprehensive, factual and damning report on the fiasco of the BHS collapse. Mr Green lacked respect for BHS employees and their families when he mismanaged the business to the point that it could only be sold for £1. He then abandoned all responsibility for their pensions and the failed company that fell apart under his leadership. The report makes for grim reading, particularly when it states that
“the total dividends paid by BHS Ltd were £414 million in the 2002–04 period, almost double the after-tax profits of £208 million. BHS Group, the parent company, paid dividends of £423 million in this period… We were told that the Green family received £307 million of this. This effectively removed value from the company, precluding its use for purposes such as investment or pension contributions.”
Our constituents are bearing the brunt of that recklessness and greed. A constituent of mine, Tracey Hurst, reached out just yesterday to share the impact that the BHS collapse has had on her life. Having worked for BHS for 17 years, she remained there until it collapsed and closed completely. She refers to herself as a loyal member of staff who stayed until the very end. She was not bitter, but disappointed and concerned for her colleagues, many of whom have been unable to find new jobs. Another constituent, Laurence Robertson, contacted me to say that he feels strongly about such greed at the expense of the average person. Another constituent reached out to express how he and his family had always loved shopping at BHS but had been disgusted to discover what he called Sir Philip’s absolute greed and complete lack of compassion. Many have asked that Mr Green be stripped of his knighthood, which seems only fair given that many have been stripped of their jobs and pensions under his leadership.
Joanna Cherry
BHS was a much-loved institution on Edinburgh’s Princes Street for many years. I remember visiting it with my mum as a wee girl in the days when there was even a food hall, which was quite a long time ago. Does my hon. Friend agree that this House owes it to the staff of BHS, who served their communities so loyally for many years, to ensure that sanctions are imposed for what occurred and that this cannot happen again?
Hannah Bardell
As ever, my hon. and learned Friend is absolutely spot on. A knighthood for thousands of pensions does not seem unreasonable. The 32 BHS stores that closed across Scotland included branches in Livingston, Hamilton, Kirkcaldy and Leith, and the closure resulted in more than 700 employees losing their jobs and livelihoods, and a place of work to which many, like my constituent Tracey, gave a huge chunk of their working lives.
When employees lose their jobs and pensions, their families are hit by that loss. Sir Philip understood the importance of providing financially for his family—he understood it very well. In fact, the entire Green family hugely benefited from BHS. Reports say that the Green family made around £2.7 billion in total out of BHS and Taveta. Mr Green paid substantial dividends offshore that financially benefited his wife. BHS employees want to be able to provide for their families, but Mr Green is clearly blind to the parallel. Sir Philip has done pretty well out of BHS and other investments. He has a helicopter, a jet and three yachts. I have nothing against someone spending their hard-earned money as they please, but that should not come at the cost of our constituents’ pension pots. If Sir Philip’s responsibilities do not include ensuring that his employees receive what they have earned, they will certainly not be enjoying the same luxuries as he; they will not even have a pension to retire on.
Beyond responsibility and respect, Philip Green’s actions and those of Dominic Chappell and the BHS directors simply fly in the face of good business practice. BHS’s collapse, coming amid trade negotiations for Brexit, reflects the dire need to encourage fair and inclusive business practices across the UK. This debate is about not only placing blame on Sir Philip Green, but doing what is right for BHS employees, who have been cheated out of their jobs and pensions, and other future employees. It is about ensuring that there are fair business models and regulations so that such a collapse can never occur again.
The Work and Pensions Committee’s announcement that it will examine the adequacy of the Pensions Regulator’s power in a further inquiry is a constructive start to the mission. My SNP colleagues and I have called repeatedly for the establishment of an independent pensions commission so that we can create an architecture under which the Philip Greens of this world can no longer run away with people’s hard-earned money. Now that EU workers’ rights will no longer be guaranteed and transferred to UK workers, it is more important than ever that we are proactive and ensure that our constituents are treated fairly by their employers. As the UK Government embark upon Brexit negotiations, there may be no running commentary, but we can be sure that there are running and ongoing concerns. Employees will remain uncertain about their rights, and the Government have a duty of care to all workers, including those put out of a BHS job and pension.
The Prime Minister claims that she will ensure that workers’ rights continue to be guaranteed in law as long as she is Prime Minister. I say to her and her Government that we require rights to be guaranteed far beyond her term or any of this Government.
Alison Thewliss
My hon. Friend makes an excellent case. Would workers’ rights be enhanced if employees were allowed on company boards?
Hannah Bardell
I absolutely agree with my hon. Friend. The Prime Minister has mooted that idea and I hope that she receives the support of her party.
Returning briefly to Sir Philip, as he is for the time being, he has responded to the criticism that has been waged against him by saying that England
“is a place where you get a lot of jealous, envious, you know, negative people.”
What a shoddy and shameful way to describe anyone, particularly when they are customers and consumers. I hope that Mr Green is listening when I say that my colleagues in the Chamber from England, Scotland and elsewhere in the UK are not jealous or envious of his gross mismanagement of BHS, but I think I am right to say on behalf of hon. Members from all parties that we do feel negative—negative about how hard Mr Green’s former employees, who are our constituents, will be hit by that mismanagement and his failure to make amends.
It all comes back to responsibility and respect. Sir Philip did not respect the hard work, loyalty and livelihoods of his employees, my constituents and the constituents of Members from across the Chamber. Just as a company is responsible for its employees, Parliament is responsible for its citizens. This is about responsible business practices and responsible regulatory practices. This is about holding businesses and individuals to account by any means possible and sending a strong, clear message that we will not accept such shoddy practices from our businesses towards our people.
Strip Philip Green of his knighthood. Take him to task. Maybe get him to sell a few of his superyachts so that my constituents and everyone else’s can get the pensions and retirement that they worked so hard for. We must have a proper, strong regulatory framework so that this dereliction of duty can never happen again.
Liz McInnes (Heywood and Middleton) (Lab)
It is a pleasure to follow so many great speakers. I thank my right hon. Friend the Member for Birkenhead (Frank Field) for his work and chairmanship of the Work and Pensions Committee in producing this joint report, alongside my hon. Friend the Member for Hartlepool (Mr Wright), whom I thank for his chairmanship of the Business, Energy and Industrial Strategy Committee. I also thank those hon. Members who have contributed by serving under their leadership on both Select Committees to help to conduct this investigation of the handling and failing governance of BHS.
It was my privilege to be in the Public Gallery when Sir Philip Green was called to appear before the Committee. It was an education for me to witness at first hand his dismissive and belligerent attitude, variously referring to my hon. Friend the Member for Westminster North (Ms Buck) as “your Lady” and requesting that the hon. Member for Bedford (Richard Fuller) should “stop staring” at him. The title “Sir”, for those who choose to accept it, is bestowed upon those deemed to be deserving of the honour. With the title comes an expectation that a person will conduct themselves with respect and dignity, but that was sadly absent from Sir Philip’s performance on that day.
I would specifically like to concentrate on the BHS pension fund, rather than the possible stripping of Sir Philip Green’s knighthood. If he does lose his honorary title, I guess we will have to accept that it was an “honest mistake” to bestow the title upon him—unfortunately some honest mistakes, such as unloading BHS on to a serial bankrupt, are just bigger than others. Should Sir Philip be stripped of his knighthood, I suggest that, as a symbolic gesture, it is given to one of Sir Philip’s redundant employees. I would like to nominate Mr Grant Atterbury, who has chronicled the demise of BHS and his own experience of the shop floor in a series of very sad, funny, touching and eloquent articles via the pages of The Guardian. Mr Atterbury is still looking for work, and he writes:
“If anyone happens to know of any good jobs going that might suit a deeply cynical 43-year old whose key skills include folding towels and writing slightly bleak yet comical portraits of ramshackle department stores, do please get in touch.”
He lives in Kent, just in case any Member has a job that they might be interested in offering him.
Let me return to pensions. I am pleased to hear that negotiations have started in order to find a solution to the pensions problems faced by those who worked at BHS, but I raise concerns about to the speed of and commitment to the process. Sir Philip has made a vow to “rescue the pension scheme”, but unfortunately, according to the Pensions Regulator, it has yet to receive a “credible” offer to implement a deal. The Pensions Minister said yesterday that neither he nor the Government have received a written offer, which leaves 20,000 pensioners still uncertain about their investment and future, and how they will survive in retirement.
The joint report states:
“Sir Phillip Green systematically extracted hundreds of millions of pounds from BHS, paying very little tax and fantastically enriching himself and his family, leaving the company and its pension fund weakened to the point of the inevitable collapse of both.”
That is clearly unethical, immoral and in breach of section 172 of the Companies Act 2006, which states:
“A director of a company must act in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard…to—
(a) the likely consequences of any decision in the long term,
(b) the interests of the company’s employees”.
I think there is cross-party agreement that Sir Philip failed to meet any of those requirements on any level. We in the House have an obligation to make sure that the regulatory body ensures that that section of legislation is implemented and that law is carried out.
It is imperative that a deal can be done and that Sir Philip makes a credible offer as soon as possible. He is on record as saying he did “everything possible” to stop BHS from going under. He should now be doing everything possible to protect these families from the hardship that his mismanagement may have left them in. As we have heard, he left BHS with a £571 million pension deficit, after taking it over in surplus. He took £400 million in dividends from the company and then sold the department store for a single pound, leading to 11,000 job losses and the final store’s closure last August. He has an obligation to those who worked hard in good faith within the BHS company to secure the settlement that is necessary to ensure the long-term viability of the pension scheme. During his appearance before the Select Committees, Sir Philip promised that he would “sort” the pension scheme. I say to him now: Sir Philip, get it sorted.
Clive Lewis (Norwich South) (Lab)
First, I thank the Backbench Business Committee for organising this debate on such a timely subject. I also thank the combined Select Committees for their report, as that work has brought us here today. They deserve great credit for having so patiently and thoroughly investigated this whole sordid, shabby affair. I also thank colleagues who have participated in today’s debate, particularly my hon. Friend the Member for Hartlepool (Mr Wright) and my right hon. Friend the Member for Birkenhead (Frank Field), both of whom, through their fantastic chairmanship of their Select Committees, have shone a light on some of the systematic abuses by Sir Philip Green and his accomplices. I should also mention the suggestion made by my hon. Friend the Member for Heywood and Middleton (Liz McInnes) of stripping Sir Philip Green of his knighthood and awarding it to one of his former employees, a self-confessed cynic—how could we blame him for being a cynic after what has happened in the past few years?
I have referred to contributions made by hon. Members today, and it is clear that this issue cuts across party lines. There is a great deal of anger in the House, which reflects the anger that many of those who elected us are feeling. Sir Philip Green treated BHS as his own personal plaything. He failed to invest in the company’s branches, he neglected the brand and he ran down the pension scheme. In effect, he used the company to line his own pockets and then jumped ship like the proverbial rat from a sinking ship. Despite that woeful, even wilful, neglect of this historic company, he still retains his knighthood for “services to retail”.
The House has rightly expressed widespread incredulity at that state of affairs, a view that I share entirely. All human societies have found ways of honouring those who have acted with great distinction. We recognise those who receive such honours as people who have enriched all of our lives—people whose lives challenge us all to try to emulate theirs. Although it is clear that Sir Philip Green has, by his actions, tarnished the honour that we, as a society, have given him, he has tarnished his own good name far more gravely. Stripping him of his knighthood will not create jobs for the 11,000 who lost them. It will not fill the £571 million deficit in the pension fund. It will not fill the hole left on high streets up and down the country. It will not pay back the £6 million owed to Her Majesty’s Revenue and Customs. Nor will it ensure that firms in BHS’s supply chain, many of which are small businesses, the foundation stones of our economy, are paid what they are owed.
Our first priority is to save the pension fund. As far as I am concerned Sir Philip Green can keep his honour, provided he pays back the pension deficit in full from his own ample wealth. He should make good his wrongs with deeds, not just the good intentions that he offered the Select Committee. But if all we do today is posture in condemnation of one man, we are doing little except indulging in competitive scapegoating. I am sure I speak for many people in this country when I say this: the most extraordinary thing about this whole affair is that legally, Sir Philip Green has done nothing wrong. Had he broken the law, and were he just a criminal caught with his hands in the till, it would have been up to the courts to act, but he is not a criminal, and there is no suggestion that he is. This House can rightly condemn the actions of the man, but we cannot escape our own responsibility for this affair. Where are our laws made? Here. Who makes them? We do. Who is responsible when powerful men shamelessly rip off the weak, and yet they have not broken the law? We are.
Ian Blackford
I am very heartened to hear the hon. Gentleman’s remarks. Does he not share my disgust that the Government have failed to learn lessons from this debacle, and have failed to put any proposals forward so that we ensure that we do not have any other situations such as BHS again?
Clive Lewis
I will address that point a little later in my speech. I think the Government have said that they intend to change their tune, and that they are now the party of the workers. We shall see whether they genuinely are, but I will not be holding my breath.
Mr Jim Cunningham (Coventry South) (Lab)
There have been a number of occasions when there have been similar incidents. Only about 12 months ago, nearly 1,000 jobs went at City Link on the outskirts of Coventry. I tried to get a ten-minute rule Bill through, and it was defeated. It is about time that we had some really tough legislation on these issues.
Clive Lewis
I thank my hon. Friend for that comment—it is one that many of us on the Labour Benches agree with. We want to see action, not words. When scandals such as this break, we here cannot have it both ways. We must either shrug our shoulders and say, “Tough luck, guys, that’s the way the game works, you lose,” or say, “We will legislate to make sure that this never happens again.” Will we do that? Will we look at the role of the auditors who signed off on BHS as a “going concern” just a year before it was sold off for a £1 like a second-hand yo-yo? Will we look at the role of the huge city financial advisers who waved through the sale of BHS to Chappell, or at the pillaging of the pension scheme, that, let us remember, is not unique to British Home Stores? This is the story not of one bad apple spoiling everyone’s reputation, but of a system that is bent, and we know in whose favour.
Good businesses are the lifeblood of our economy, but, as honest, responsible, hard-working business people up and down the country know well, the system often allows good businesses to be undercut by bad businesses. When companies are used to extract wealth rather than to create it, it hurts everybody.
In the near future, the shape of the modern economy will be transformed. Let us make sure that that transformation is truly for the benefit of all and that we do not need to come back to the House again and again to express our outrage at yet another scandal and yet another rip-off of the ordinary people of this country. The rules of the game need changing.
I am delighted to see the cross-party condemnation of Sir Philip Green’s conduct. I am also delighted—if not more than a little surprised—to hear the Prime Minister claiming to have thrown out the laissez-faire fanaticism that has dominated her party’s thinking for the past 30 years. We on the Labour Benches welcome any move towards an economy founded on fairness and democracy. It is, after all, what our party has always stood for. It is not what the Conservative party has always stood for. Are we really to believe that the party of billionaires and tax avoiders is the one to transform our economy in the interests of fairness?
Let us take one example: the Prime Minister’s modest proposal to give workers a voice by allowing them representatives on boards. We welcome that suggestion. Giving workers a voice is what our party has always stood for, but I am not convinced that the proposal goes far enough. Are we to believe that an individual worker or two would have been able to stand up to the likes of Sir Philip Green? A voice is useless without teeth. However, even the Prime Minister’s own Cabinet will not support that modest proposal. Members of the Cabinet are, I surmise, more honest than the Prime Minister, more aware of which side their bread is buttered.
I hope that Sir Philip Green is better held to account as a result of today’s debate. I hope even more that it serves as a wake-up call on deeper problems and proves to be a turning point in how our economy is governed. I welcome the Prime Minister’s rhetorical conversion to our party’s values, but the question that she and other Conservative Members must answer is this: they have talked the talk, but can they walk the walk?
Frank Field
I have one message. Today, the House of Commons has illustrated to the country how we work: reports are commissioned, delivered and debated here. The message that we all want to go out is that merely producing a report is not the end of the tale. In many cases, we have to follow up the report. The message to those who have lost their jobs and whose pensions are uncertain is that this place will not give up until we gain the maximum justice that we can. As my hon. Friend the Member for Norwich South (Clive Lewis) has just said, there is a full agenda on how we reform pension law and company law, and we have already started that task.
Amendment agreed to.
Main Question, as amended, put and agreed to.
Resolved,
That this House notes the recent joint Report by the Business, Innovation and Skills and the Work and Pensions Committees on BHS; endorses that Report’s criticisms of the governance of the company and of the holding company, Taveta Investments Limited; believes that the sale of the company to Retail Acquisitions Limited for £1 was clearly not in the interests of British Home Stores’ employees and pensioners; notes the failure of Sir Philip Green over many years to resolve the deficit in the BHS pension fund; and calls on him to fulfil his promise to do so forthwith; and, noting that Philip Green received his knighthood for his services for the retail industry, believes his actions raise the question of whether he should be allowed to continue as a holder of the honour and calls on the Honours Forfeiture Committee to recommend his knighthood be cancelled and annulled.
Industrial Strategy
(7 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Chris White (Warwick and Leamington) (Con)
I beg to move,
That this House has considered industrial strategy.
May I thank what we call the BBCom for approving my application for this debate? Let me also thank the hon. Members for Hove (Peter Kyle), for Edinburgh West (Michelle Thomson) and for Hartlepool (Mr Wright) for supporting this debate. We often debate policy in this Chamber, but it is rare for us to debate the creation of a new Department and what it will in fact mean.
In my maiden speech, I referred to my constituency, Warwick and Leamington, as being at the centre of the country, both geographically and demographically. We have good schools, colleges and two highly respected universities on our doorstep. We have many businesses, which are household names, a skilled workforce and low unemployment. The constituency has a strong reputation in the technology sector, particularly in the video games industry, and the wider region has a heritage firmly based in manufacturing.
This month, on a visit to my constituency, I was pleased to see the site that will house a new factory for Vitsoe, the furniture manufacturer and exporter. It is on the very spot that was home to the Ford foundry until it sadly closed in 2007.
Mr Jim Cunningham (Coventry South) (Lab)
The hon. Gentleman’s constituency is next to mine, and he will know that Jaguar Land Rover has its main development plant in Coventry, probably employing around 5,000 to 6,000 employees. Equally, he will also know that the Chinese have put more investment into the black cab company, which is constructing a new site in Coventry. That gives us a good demonstration of some of the industries that have been created in the midlands.
Chris White
I welcome that intervention. The hon. Gentleman and I have attended some of those very interesting institutions and worked together at Warwick University, one of our leading international universities.
I am pleased that Tata has based its new technology centre in Leamington, which shows what effect inward investment can have on our constituencies and our country. Despite the collaboration—the links between our educational institutions and business, its location and its workforce—how much more could we do as a constituency and as a country if we had the strong foundations of an industrial strategy?
Since working in the automotive sector, I have always had a passion for manufacturing, not least as co-chair of the all-party manufacturing group. I am a member of the Business, Energy and Industrial Strategy Committee—I am pleased to see its Chairman, the hon. Member for Hartlepool (Mr Wright), in his seat—and we are currently taking evidence on this concept.
We have recently heard evidence from the right hon. Member for Tatton (Mr Osborne), the former Member for Twickenham and Lord Heseltine, who all assured us in their own different and special ways that we have had an industrial strategy all along. Perhaps they are right, but I would like to use this speech to say how I think an industrial strategy could be reformed to meet some of the present challenges that we face.
In the last Queen’s Speech debate, I spoke on industrial strategy. I remember that most of the other speakers spoke about sugar tax, an important issue at the time. I must admit that I was not entirely overwhelmed by the Government’s enthusiasm for what I was saying, so no one is more delighted than me to see the inclusion of the words “industrial strategy” in the name of a Department.
There has been a sense of scepticism about industrial strategy. [Interruption.] That was more warmth than I received for my remarks in the Queen’s Speech debate. Industrial strategy has been given negative connotations. Let us consider British economic performance, for example, in the post-war period. Britain’s relatively poor record between 1950 and 1979 has generally been blamed on the lack of competition, with traditional firms being unwilling to adopt technological or process advances. Wilson’s “white heat” of the scientific revolution was replaced by a heavy reliance on the financial sector. Neglect in the past has seen a weakening of our supply chains and a huge shortfall in the skills that a world-class industrial base requires to satisfy both demand and opportunity.
We need to have a strategy and structure in place, a need made even more urgent following the EU referendum. In addition, highly capital-intensive advanced manufacturing requires long-term planning. There is a burden on companies to invest in skills and equipment, and a burden on the state to help create stability for long-term decision making—macroeconomic, fiscal and regulatory.
For manufacturing to grow, an emphasis needs to be placed on encouraging investment and greater long-termism. Although initiatives such as the midlands engine and the northern powerhouse are laudable, they need to be supported by strong tangible policy, and that policy will be less effective if it is piecemeal. For example, capital allowances were popular with industry, but were discrete in their design. A coherent strategy can work for the midlands, the north and the south, driving growth, building economies and providing sustainable employment and the subsequent reduction in community and individual inequalities.
Any new industrial strategy must fit the times we live in, the domestic economy, the global marketplace and developing themes such as Industry 4.0. In September 1965, the then Secretary of State for Economic Affairs produced the national plan, which sought to cover
“all aspects of the country’s economic development for the next five years”.
The plan was more than 450 pages long and looked at everything from the running costs of schools to the future development of the electronics industry. The plan was comprehensive in scope, but our economy no longer operates under such a structure and the plan would have negative consequences if replicated today.
The lack of success of documents such as the national plan does not mean that there should not be a national industrial strategy now for the UK, or that there is not a case for a coherent document to be drafted by the Government, outlining the support that they intend to give the sector and Departments. In countries such as Germany, long seen as a model industrialised nation, there has been little need for the Government to pin down formal strategies or statements because this philosophy is so entrenched and embedded in all activity. In Britain, there has been a tradition of volunteerism when it comes to economic organisation.
Jeremy Lefroy (Stafford) (Con)
Does my hon. Friend agree that in Germany, in the Kreditanstalt für Wiederaufbau—KfW—which has been in place since the late 1940s and provided long-term support to small and medium-sized enterprises, we have a model that could be replicated here, perhaps in the form of a UK investment and development bank?
Chris White
I thank my hon. Friend for his contribution, but I gently suggest to him that that slightly misses the point. It is just one element of an industrial strategy.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Will the hon. Gentleman give way?
Chris White
I would be delighted to give way, so long as the hon. Gentleman keeps to the subject.
Mr Sheerman
Is Germany the only model that the hon. Gentleman is examining? The challenge that we face, with only 10% of our people in the manufacturing workforce, is that with a smart bit of kit it is possible to manufacture anywhere in the world. That is a wonderful opportunity. Does he not think that Germany is an outdated model to follow?
Chris White
With the economic advances in our technology and with institutions such as the Warwick Manufacturing Group and other such groups, including in the hon. Gentleman’s constituency, we need to invest in research and development to make sure that we maintain the cutting edge and lead in those technologies.
Central Government, or perhaps more accurately Whitehall, generally responds well to objectives and targets, which provide focus and concentrate minds. A cohesive document would allow the public and business to hold the Government to account. Debate would be unavoidable and long-term consensual policy would prevail. The document, or statement, would lay out policies to support manufacturing for the medium term—around 10 years, say—giving clear objectives for the economy.
Mark Tami (Alyn and Deeside) (Lab)
Does the hon. Gentleman agree that Governments have tended to intervene when a sector is failing, but they have failed to support a successful sector because we in this country step back and say, “Why should we support it? It’s doing fine on its own.”? Is that not one of the big problems that we have faced for many years?
Chris White
The Government should intervene before a sector is failing. We always seem to miss the problem when it occurs, which makes it much more difficult to resolve, not least in some of our strategic industries.
The Government need to state how they intend to achieve their objectives through a long-term framework. Although it is recognised that manufacturing does not make up the majority of the economy, it can be seen as a driver for other sectors in respect of efficiencies, processes, skills, exports and so on. It requires more explicit planning than other sectors, which can be seen as interdependent, with the state playing a more active role. This should not come, however, at the expense of creativity or productivity, and it should assist rather than hinder.
One of the most consistent calls from manufacturing has been for the Government to articulate a long-term commitment to the sector and to give an indication of the policy framework they are likely to operate in the medium-to-long term. That should be a rolling document, updated regularly and taking into account fluctuations in the wider global economy and in the sector in the UK. It should be debated in Parliament to provide transparency and accountability. It should address a wide range of challenges. How effective is the British Business Bank in terms of access to finance? What capital is required to radically change manufacturers’ investment decisions? Can incentives be created to encourage business to invest? What progress is being made with green manufacturing?
Education is a vital component of the strategy. There is currently little planning associated with supporting the development of STEM subjects—science, technology, engineering and maths—in primary education, which is a major factor in creating the skills gap the industry is now experiencing. Those subjects are the bedrock of degrees and apprenticeships, but they are left to the latter stages of education—often too late to influence a child’s decision-making process.
Mr Sheerman
Does the hon. Gentleman know that tens of thousands of young people in further education colleges up and down our land are desperate to get into apprenticeships, but they cannot, because they cannot get their GCSEs in English and maths? When will the Government introduce a practical maths GCSE to unblock that blockage? Will he persuade them to do that?
Chris White
I will leave the Minister to answer that question in his remarks.
In a truly global trading nation, more provision should be made for studying languages. What is the number of children at school studying Chinese or Russian? How can it be improved? A welcome manifesto commitment—the hon. Gentleman has touched on this—was to increase the number of apprenticeships to 3 million by 2020. How are we going to take down the barriers that prevent that from happening?
Infrastructure is an essential part of the strategy, not least in improving the quality and reliability of supply chains. That should include the comprehensive development of a digital infrastructure that is fit for purpose. Other elements of the strategy would, of course, include an energy policy, procurement, immigration, export—including the role of supporting bodies such as UK Trade & Investment—catapult centres, research and development, through-life engineering services and the wider contribution from Whitehall.
Social enterprises may not be the first issue that springs to mind in this context, but they are a sizeable part of our economy. The positive impact social enterprises have on local communities is of huge value, and it is through an inclusive approach to shaping our industrial strategy that such sectors can be supported.
Chris White
I am sorry; I will not give way again.
Clearly, an industrial strategy needs to establish a framework—from how many children are studying STEM subjects at primary school, right through the industrially strategic pipeline to how many businesses are exporting. Where have targets been met, and where is further intervention required? As the strategy becomes more embedded, those things will not come as shocks, but more as minor adjustments to the levers of policy. We used to say quite a lot about the long-term economic plan. We need an economic plan, and underneath any economic plan, we need a strong and robust industrial strategy.
Several hon. Members rose—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. May I suggest to Members that if we work around eight minutes, everybody will get the same?
Mr Iain Wright (Hartlepool) (Lab)
Thank you for that guidance, Mr Deputy Speaker—I need to have a productivity improvement of about 20% immediately.
It is a real honour to follow the hon. Member for Warwick and Leamington (Chris White). I think we have exactly the same principles, motivations and objectives when it comes to having an industrial policy. He is a fantastic member of the Business, Energy and Industrial Strategy Committee. I thank him, other members of the Committee, and the Backbench Business Committee for allowing this important topic to be debated today.
I welcome the Prime Minister’s rhetoric about having a “proper” industrial strategy. We on the Committee have embarked on an inquiry into industrial strategy to assist with the development of policy. A number of fundamental questions need to be addressed to ensure that we have a modern, competitive, productive, sustainable and profitable business base in this country. What is the correct and optimum level of state intervention in economic and business policy? It would be ludicrous and naive to suggest that the Government do not intervene every single day through legislation and regulation that affect the prospects of hundreds of thousands of businesses.
How can that intervention be done in as strategic and co-ordinated a manner as possible? The primary consideration for business in any industrial strategy, or indeed any Government policy, is long-term certainty—something the hon. Gentleman has already mentioned. How can we ensure that the broad sweep of industrial policy transcends Parliaments and can withstand changes of Government? We have to acknowledge that there is a mismatch between the long-term requirements of business and short-term political pressures. Ministers of all Governments and of all persuasions are prone to the temptation of announcements, initiatives and reviews. Governments are keen to give the impression of action and activity, even if that is not often matched in reality. How better to give an impression of zeal and purpose than to announce a review of something?
Richard Fuller (Bedford) (Con)
The hon. Gentleman talks about the importance of the long term as he yet again stumbles into the same mistake that politicians make generation after generation—believing that they know what industrial strategy is but do not bother to ask their colleague for whom it might be something different. My experience of business has been in technology. The only long-term thing in technology was the knowledge that tomorrow will be different from today. How on earth are the Government, with their lumbering, slow way of manoeuvring, supposed to keep up with the entrepreneurs who have created so much progress in society?
Mr Wright
We can have many debates on industrial policy—we have and we will.
The hon. Gentleman touches on the second big theme of my speech, which is: What do we mean by picking winners? Let me go back to the notion of long-term business considerations and wishes for policy stability at the expense of short-term political culture. We have seen this already with the new Government. The new Prime Minister has announced that we need to have
“a proper industrial strategy”.
In doing so, she seems to have jettisoned much of what has gone before. In a letter to me this week, the Secretary of State said that there needs to be
“a much stronger relationship between Government and business. For that reason, now is not the time for the Government to set out its approach in detail”.
Although that provides clear blue water between the current Government and what went before when David Cameron was Prime Minister, it hardly provides the reassurance of certainty for business. At a time when the process of Brexit is leaving business with unprecedented uncertainty and giving pause to future inward investment into this country, greater detail should have been provided. It is a cause for concern that over three months after the new Department was formed, the Secretary of State is still insisting that he cannot set out the Government’s industrial strategy in any kind of detail. Equally, important steps on large strategic matters such as airport expansion and new energy generation are taking far too long, especially when Britain needs to demonstrate to the world that we remain open for business.
Another key principle of what we need for a successful industrial strategy is effective cross-Government co-ordination. Industrial strategy will be a failure if it merely resides in No. 1 Victoria Street. As previous Administrations have demonstrated, unless the relevant Department—the Business Department, the DTI, or whatever it is called—is headed by a big beast, whether a Heseltine or a Mandelson, the notion of effective co-ordination across Whitehall turns into dust. Early signs from the new Administration are encouraging. Most importantly, the new Cabinet Committee on Economy and Industrial Strategy is chaired by the Prime Minister herself. This should ensure co-ordination and effective leverage from No. 10 and demonstrate to other Departments that the Prime Minister is very interested in this issue and will be pushing to bang heads together if they do not demonstrate due respect to an industrial strategy.
That said, the Cabinet Committee still has to combat a silo-based and defensive approach from Departments. I think that the Secretary of State recognises that. As he said in his letter to me,
“to be successful, the industrial strategy will need to deliver an upgrade to our infrastructure”,
and yet the Treasury will not relinquish control over infrastructure spend. He also stated that a successful industrial strategy will need to
“improve our education and training system to provide the skilled workforce that will be needed in the future”,
and yet the Department has lost control over skills policy. Lord Heseltine, giving evidence to our Committee last week, said that
“industrial strategy starts in primary schools”,
and yet when we met the Permanent Secretary this week and asked, “To what extent does BEIS have influence over the design of primary school policy in order to link it with industrial policy?”, he conceded that the Department had no such influence. I am yet to be convinced, based on experience of successive Governments, and having had the privilege of serving as a Minister myself, that Whitehall Departments will have as a primary objective the effective implementation of an industrial strategy. I hope that the Minister can demonstrate otherwise.
A further key way in which effective Government co-ordination can be demonstrated is through smart procurement. There may often be a tension between Departments in securing goods and services at the cheapest cost, and in considering the use of British-based and British-made products, which may sometimes be more expensive. I would contend, however, that it is often a false economy to buy off the shelf from overseas at the long-term expense of an effective British manufacturing sector. This month’s announcement that the hulls of the replacement Trident submarines are to be built with French steel, at a time when the British steel industry has been pushed to the brink of extinction, shows vividly an acute failure of industrial policy. I am not for one moment endorsing the idea of protectionism. That approach insulates domestic companies from the harsh realities of having to compete in the global economy on cost, innovation and quality, and it ultimately dooms them to obsolescence. However, given the great success story of many parts of British manufacturing, why is not every single public organisation’s fleet using Nissan cars built in Sunderland or Vauxhall vans built in Luton? How is the procurement process nurturing British industry, and how will a proper industrial strategy ensure that that becomes the case?
Richard Fuller
I am grateful to the hon. Gentleman for giving way a second time. He said that he was not talking about protectionism, but then he outlined, chapter and verse, a protectionist position that we should buy British products. How is that not protectionism?
Mr Wright
I think that smart procurement can engineer proper prosperity, but I warn the hon. Gentleman that what I have to say next will give him spasms. It relates to the link between a proper industrial strategy and foreign takeovers, and how the state can intervene to perhaps limit the range of foreign takeovers.
In her speech launching her campaign to be Conservative party leader in July, the Prime Minister said:
“A proper industrial strategy wouldn’t automatically stop the sale of British firms to foreign ones, but it should be capable of stepping in to defend a sector that is as important as pharmaceuticals is to Britain.”
I welcome that approach. One of Britain’s virtues is its openness and the fact that that openness lends itself to dynamism and a willingness to consider new ideas and innovate new products. That ultimately leads to better competitiveness, yet there is a risk that this country will sell off the crown jewels, which would be detrimental to the long-term success of British business. We are at the heart of a dynamic and connected global economy, but we are at greater risk of investment in capital allocation decisions that affect British industry being made far away from these shores by parent boards headquartered overseas.
Indeed, within days of the Prime Minister entering No. 10, it was announced that SoftBank was buying Cambridge-based Arm Holdings for £24 billion. That was not an old-fashioned, obsolete, loss-making businesses, and it did not require a bail-out from the state. It was a successful British company in the growing global tech revolution. If the tests for stepping in to defend a sector that is important for Britain were not at work in that instance, it is difficult to see when they would be applied. Indeed, what would those tests be? For every instance of a welcome takeover, such as Tata’s purchase of Jaguar Land Rover, there are numerous examples of takeovers where industrial capacity was moved offshore, such as Kraft’s takeover of Cadbury. What are the criteria for stepping in and intervening?
Mr Sheerman
That is music to my ears. When I was a young man, I worked for Imperial Chemical Industries. These days it is called Syngenta and it has a big plant in my constituency. The leading agritech company in the world was taken over, including all its sites, not by a normal company, but by ChemChina, which is a part of the communist Government of China. That is not a normal takeover, but what are this Government doing about it? I have not heard anything.
Mr Wright
That is a fair point and it gets to the heart of what we mean by foreign takeovers and their link to industrial strategy.
I am conscious that colleagues want to make their own speeches, so I will finish. The Government have yet to articulate what is meant by picking winners, whether they be individual companies, sectors or technologies. There seems to be a move away from our previous sectoral approach, but there is no clarity with regard to the criteria. It is increasingly obvious that the Government are not entirely clear about what an industrial strategy looks like. Starting with a blank piece of paper gives the Select Committee a welcome opportunity to contribute meaningfully to the development of policy, but it does not provide much reassurance or certainty to the firms that are working hard to create wealth and prosperity for this country—and certainty is what they are crying out for at the moment.
Stephen Hammond (Wimbledon) (Con)
It is a pleasure to follow the Chair of the Select Committee, the hon. Member for Hartlepool (Mr Wright). For a long time, the words “industrial strategy” struck fear into the heart, and raised the hackles, of many on the right of the political spectrum. Those words called to mind the era of excessive government intervention and anti-market philosophy, with the Government picking winners—usually winners that were declining—deciding on nationally strategic industries, and pursuing anti-competitive practices and industrial relations policies that stifled competition.
Kelvin Hopkins (Luton North) (Lab)
When it comes to industry, the most interventionist Government in Europe is Germany. It is also the most successful economy in Europe.
Stephen Hammond
That very much depends on how we define intervention; we might come on to that later in the debate.
To meet the challenges of the 21st century, especially in post-Brexit Britain, industrial strategy should be about four things: the Government creating the ecosystem or the environment in which industry can succeed and in which national productivity—a huge challenge—can be increased; ensuring that our country has the skills that it needs; ensuring access to finance; and boosting and promoting industries of competitive and comparative advantage.
When we talk about the ecosystem or environment, we almost inevitably talk about infrastructure. One of the achievements of the previous Government was that even in a time when we had to pay down the deficit, infrastructure was reckoned to be the key factor for economic growth. Public sector support has, rightly, been provided for all sorts of developments over the past few years, most notably in transport, energy, housing and broadband communications. The National Infrastructure Commission, which made it possible to look across sectors and move away from the previous silo approach, has had a great impact.
As the hon. Member for Hartlepool pointed out, an urgent priority for the Government has to be a consideration of not only how we strategically assess, but how we deliver. That is partly about smart procurement and making the Government an intelligent client. Our inability over the years to specify design has meant that costs have inevitably increased, so the cost base and project management costs have been much higher than they would otherwise have been. The Treasury optimism bias or risk quotient, depending on what one calls it, has had to be increased throughout. By driving into the Infrastructure and Projects Authority some of the skills needed for the delivery of smart procurement, we will be able to reduce costs and make projects more attractive and fundable.
We need to get the private sector much more involved than it has been so far. If we travel anywhere else in the world, we will use roads and bridges that are privately owned and run, and the fact that they are privately owned and run does not make them any less useful. A commitment to infrastructure must be a cornerstone of any modern industrial strategy, so I gently say to the Minister that I hope he will push his colleagues for the appointment of a new Minister for infrastructure, preferably with some responsibility for industrial strategy, and preferably a Member of this House rather than the other place.
Our departure from the European Union will give us a couple of fortuitous possibilities in what some of us think will be a difficult time. The EU procurement rules are some of the most onerous and bureaucratic anywhere in the world. Getting rid of them from our procurement system will undoubtedly help small industry and the supply chain. State aid has been a way of thwarting, as well as supporting, a lot of investment, and we will no longer have to abide by all the state aid rules. I hope that the Minister will say later that he accepts that challenge.
Andrew Bingham (High Peak) (Con)
I have an example in my constituency of state aid preventing development. That development would help companies, and if we can do so, they will grow and create jobs upon jobs. The current situation seems ludicrous and we would be well rid of it, in my view. Does my hon. Friend agree?
Stephen Hammond
There will be some real opportunities. We will have the chance to re-examine our regulatory regime and competition policy to ensure that the UK is at the forefront of not only oversight, but competition.
If the movement of labour is restricted, there will be an acute skills shortage in this country, so we urgently need to look at ways of curing that. The Government have been at the forefront of one of such initiative, namely specialist academies for major infrastructure projects that allow us to build some of the skills that we have lost, but we need to do more. The Crossrail tunnelling academy is a prime example, and several other major rail projects are establishing academies alongside their projects. We would do well to continue to push that forward.
The recent Institution of Civil Engineers “State of the Nation 2016: Devolution” report recommends the creation of regional pipelines for infrastructure to identify where opportunities exist so that industry and academic institutions can invest in the training required.
In the longer term, there are two things the Government should urgently study and consider. The first is giving 14 to 18-year-olds an understanding of the fact that academic skills are not the only requirement for success in life, and that other things should be set alongside such skills. Why not have a national vocational qualification, alongside GCSEs and A-levels, to attract people into engineering? Equally, it would be perfectly possible for the Government to set up outreach projects that go beyond the theoretical and teach the application of STEM subjects.
Secondly, on finance, I hope the Minister will take the opportunity of our being rid of the state aid rules to consider some of the possibilities open to us. Almost inevitably, sovereign debt is chosen as the way to fund projects, because the weighted average cost of capital is cheaper. However, many countries look at possibilities in the private sector, such as pension funds, venture capital and sovereign wealth funds. The UK still seems to be suspicious of such funding. We should encourage the UK pension industry and other industries to set up direct investment funds. Equally, with the new freedoms they will have, the Government should explore setting up regional infrastructure and industry bonds, or regional equity schemes. This could be the new popular capitalism—the Mayism of the new century, just as popular capitalism was the Thatcherism of the 1980s. That will mean that people can invest in their country and region, and invest in their country’s success.
George Kerevan
The Scottish Government have already set up a Scottish investment bank, managed by Scottish Enterprise, which has significantly increased equity investment in small businesses.
Stephen Hammond
I am delighted to hear that. I am sure that the Scottish Government will want to take the opportunity of raising a sovereign wealth bond as well.
Stephen Hammond
I see that the hon. Gentleman agrees. My point is that we could now do this regionally, probably by using local enterprise partnerships as a delivery mechanism.
With any infrastructure policy, there is the challenge of what the Government need to do to organise the machinery of government that will support it. The National Infrastructure Commission represents a great strategic advantage to this country. The Minister has already heard me talk about the need to ensure that the IPA delivers on making the Government a smart client. Equally, the Government should look at the machinery in place and then sweat that machinery to ensure industrial success. Many of the LEPs can play a role in helping with regional skills and financing.
Finally, many incubators have already been set up in universities, which is fabulous. My hon. Friend the Member for Warwick and Leamington (Chris White) mentioned the one in his constituency, and there are others around the country, such as the agri-corridor in East Anglia, and particularly those in Cambridge, Leeds and Manchester, and across the north. However, we now want accelerators, which are for the next stage up. Businesses that have been in an incubator and have received some support are sometimes left to drift, and that is where universities can play a big role by bringing forward accelerators to help those businesses to reach the next phase of growth. We have talked a lot about picking winners, and if I had not spoken for longer than my eight minutes, I would have said much more about that. The Government need to ensure that universities focus those accelerators on our areas of comparative advantage. I know that the Minister—wearing not only the business hat he has on this afternoon, but his universities hat—will make that point to them. I am grateful for the opportunity to have spoken in the debate.
Michelle Thomson (Edinburgh West) (Ind)
I certainly look forward to hearing other contributions to this debate and to taking part in the Business, Enterprise and Industrial Strategy Committee’s inquiry on this important area.
In October 2015, in light of problems with the UK steel industry, I asked the then Minister if she regretted the Government’s lack of an industrial strategy. She said, “You could have had all the strategies in the world and it wouldn’t have made any difference.” I guess we can add this to the list of topics on which the new Prime Minister and the right hon. Member for Broxtowe (Anna Soubry) disagree.
I welcome the Prime Minister’s decision to implement an industrial strategy and to recognise that the fact that that is difficult does not mean we should not bother trying. A coherent and forward-thinking industrial strategy can set the foundations for economic growth and improve productivity, but only if it is done properly.
This debate will be full of questions. We need to ask what sort of industrial strategy the country requires, what the Government’s most effective levers are for improving economic growth and productivity, where Government intervention can have the biggest benefit for research and innovation, when we should get out of the way of business and when we should get involved. We also need to consider timescales, as we have heard. When can we realistically expect a White Paper or Green Paper on the industrial strategy? Will it be by early next year? We need to bear in mind that, even if we get full realisation by the end of the first quarter of next year, that will be only three years before the next general election. I reflect on the comments of the hon. Member for Hartlepool (Mr Wright) that Governments have been consistently making policy and then moving away from it with the fashion of the time. Industrial strategy will be even more of a challenge, given the all-consuming task of co-ordinating Brexit at the same time.
Although we do not yet have a White Paper, we have had speeches and letters from the Secretary of State setting out some of the areas that the industrial strategy needs to cover. He has noted the need for a long-term sustained approach to policy making, as well as the development of an enduring policy framework that provides a stable and predictable environment for business.
In principle, I do not disagree. Many businesses in my constituency and beyond made long-term investment plans on the assumption that they would have unfettered access to the largest market in the world—one that is right on their doorstep. They therefore would, I am sure, appreciate knowing sooner rather than later whether their rights to trade in Europe will be equal to those of their competitors. That point was highlighted really clearly by the Japanese Government, who said:
“Uncertainty is a major concern for an economy”.
They went on to note that Japanese businesses had
“invested actively in the UK, which was seen to be a gateway to Europe.”
Investor certainty is vital. The Brexit vote has shown how incredibly difficult it is to implement a long-term strategy that is resilient enough to withstand the change in fortunes of Ministers and Governments. A focus on evidence-led policy making could provide some ballast against the constant upheaval that exists in a parliamentary democracy.
Even when there is evidence in favour of a policy, however, more needs to be done to ensure that it is, in fact, implemented. Look at airport expansion in the south-east of England. We know there is evidence that that needs to happen to support businesses right across the UK. We have research on the costs and benefits, and several options are on the table, yet we still do not have a decision on which runway to build or extend. The link between timescales, vital infrastructure and decision making needs to be recognised. We know that the decision is being delayed for political reasons. This is a prime example of political priorities getting in the way of sensible industrial policy. We could also mention here the Green Investment Bank, which is based in my constituency of Edinburgh West. As soon as it made a profit, plans were made to sell it to the private sector. Those examples do not demonstrate a long-term, sustained approach to policy making, so I hope that they are considered when the strategy is put together.
The Secretary of State has also highlighted the need to build on and reinforce the UK’s existing industrial strengths while developing a local approach to strategy—noble sentiments indeed. Given that stated commitment to localism and desire to build on existing areas of strength, perhaps he will look again at some of the mistakes made by his predecessors in government. I and many others were disappointed to see funding to reduce carbon emissions and tackle climate change scrapped or reduced by the previous Chancellor. Whether we look at the cancellation of the proposed carbon capture and storage plant in Peterhead, the cuts to efficiency schemes or the withdrawal of support for onshore wind generation, we see that the Government have demonstrated neither a local approach nor a desire to build on one of Scotland’s undoubted economic strengths.
That disregard for local and long-term policy considerations and the failure to support national and regional economic strengths have had a major impact on the Scottish Government’s attempts to harness the country’s natural advantages, in turn putting at risk plans to reach a target of generating 100% of Scottish energy needs from renewables by 2020. A milestone was reached this year when, for one full day, 100% of Scotland’s energy needs were met by renewable power. That was an exciting glimpse into a possible future that could be supported by a sensible industrial strategy from the UK Government.
Another example of short-term politics taking priority over economic needs was the cancellation of the popular post-study work visa in Scotland. This was a highly popular route for overseas graduates from Scottish universities to stay in the country. Many of the people who obtained this visa contributed a great deal to the Scottish economy and wider society. Universities Scotland conservatively estimated that Scotland lost out on at least £254 million pounds of revenue between 2012 and 2015 as a direct result of scrapping this visa route.
Scottish politicians in this Chamber have repeatedly declared that they would like more control over immigration policy in Scotland and the return of the post-study work visa. Scotland has shown its commitment to helping those in need by finding homes for a third of all Syrian refugees who have settled in the UK in the past 12 months. The long-term economic benefits of such a policy are obvious; the political will exists and the local need is there.
Finally, I just want to touch on the idea, also suggested by the Minister, of an upgrade in corporate governance. During our previous debate about BHS and Sir Philip Green, the topic of corporate governance was brought up several times. For too long, the focus of corporate governance has been on financial profit without any reflection of ethical values. Professor Christopher Hodges of Oxford University has led thinking about how improved corporate governance can lead to more ethical business practices and move everything forward.
To sum up, there is often a tension at the heart of industrial strategy between horizontal policies, which cut across all sectors, and vertical policies that focus on specific sectors. Prioritising specific sectors can see wider industry suffer, and if no sectors are focused on at all, the strategy runs the risk of being unfocused and unsuccessful. In evidence submitted to the Business, Energy and Industrial Strategy Committee, the Korean technology company Samsung said:
“In a fast-moving digital economy, the Government should not seek to direct or manage innovation, but instead should seek to create the conditions which promote innovation.”
If all other sensible ideas fall foul of political pressures, I hope that this one principle will remain.
On balance, I welcome the Government’s commitment to an industrial strategy. I hope it will not only lead to greater economic growth and productivity, but rectify some of the mistakes of the previous Government.
Mr Steve Baker (Wycombe) (Con)
It is with considerable trepidation that I rise to speak in a debate led by my hon. Friend the Member for Warwick and Leamington (Chris White). The last time I did so, I think I persuaded the Government to accept only the first clause of his three-clause social value Bill, but he kindly asked me to serve on the Bill Committee, by which time the civil service had vastly expanded it into something of a Christmas tree Bill. I very much hope that on this occasion there will be a different outcome, but it was of course a great pleasure to serve on that Committee.
Competition on the merits is a perfectly reasonable industrial strategy for the Government to adopt. It is the one that creates the most wealth and it has been proven to lift people out of poverty. I encourage any Member and anyone listening to have a look at the website HumanProgress.org and its Twitter feed for bite-sized snippets that illustrate just how well entrepreneurship, strong property rights and freedom to contract in a market economy not only facilitate production but engage other social forces that are healthy. It is social co-operation through the mechanism of competition in the market. Other mechanisms have always brought about poverty and misery. The goal of the Government’s domestic policy should be to lower anti-competitive market distortions, and it is on that concept that I wish to focus my remarks.
Anti-competitive market distortions adversely affect economies and contribute to high costs. If we reduce distortions in both the UK and the world we could, according to the Legatum Institute’s productivity simulator, see a significant increase in productivity and public welfare. One of the great problems with domestic suggestions is that they increase the level of ACMDs, which can lead to higher costs and push more people into poverty.
I would like to offer a taxonomy of ACMDs from a paper in the competition law journal, Concurrences— No. 4 of 2014—entitled, “The effect of anticompetitive market distortions (ACMDs) on global markets” by Singham et al. The authors classify those distortions into six areas, and I offer them not as a menu from which interventionists might pluck their preferred action, but as a description of areas in which Governments take policy choices that push people into poverty by prejudicing competition.
The first and most obvious is the type 1 distortion, described as
“government laws, regulations or practices that eliminate competition completely. Examples might include a local content regulation that eliminates foreign production from competition, or a capital adequacy regulation set so high that some banks are forced to exit the market.”
That produces monopoly or oligopoly.
Type 2 distortions are
“government laws, regulations or practices that lessen competition. These are laws, regulations or practices that make markets less competitive, but do not necessarily foreclose competitors from the market entirely.”
Those distortions
“elevate the costs of certain companies.”
George Kerevan
I thank my colleague on the Treasury Committee for giving way. Does he accept that there is a middle way whereby Government can encourage competition, as we have seen with the superb Catapult centres, which are an example of an industrial strategy that works? By offering prizes for competitive solutions to technical problems, it is possible to create the ecology that the hon. Gentleman seeks.
Mr Baker
Well of course, the great prize in a free market should be a profit, which one is allowed to keep and invest in further production. I do not wish to bore the hon. Gentleman or the House, but by the time I get to point 5, he will see that I will turn to competition authorities.
I was saying that type 2 distortions that lessen competition create dead-weight costs in the economy. Examples would include distribution laws that increase costs for certain suppliers. Types 2a and 2b can be split up—[Interruption]—but I shall not go through them all. The hon. Gentleman has generously indicated that reading from this fascinating paper is perhaps not the most engaging speech for him, so I shall cut some of it down.
Type 3 distortions
“apply different rules to different firms”.
One would have thought that in a society governed by the rule of law, no one would stoop so low, yet they do. Other countries around the world—particularly, I am afraid, India and the Philippines—have such regulations.
Type 4 distortions
“are largely caused by state-owned enterprises”,
which include “government privileges in licensing” and distortions relating to the pricing practices of state-owned enterprises and to “abuse of regulatory process”; while type 5 are
“largely due to action or inaction by competition agencies”.
I will happily share with the hon. Gentleman some of the detail on how competition authorities, either by acts of omission or commission, fail properly to promote competition.
Type 6 distortions are
“caused by anticompetitive state aid or support”
whereby firms are given
“subsidies and other subventions that may or may not be anticompetitive”.
The point is that it is now well known in academic literature that various categories of Government interventions make us poorer. They can be subjected to a taxonomy, and their costs can be estimated—[Interruption.] I apologise if the hon. Member for Newcastle upon Tyne Central (Chi Onwurah) does not like me using a particular word.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
I declare an interest in that I have worked for a competition regulator, Ofcom. The hon. Gentleman is suggesting that a lack of competition is always the fault of the Government, either by doing or not doing something. Does he not recognise that it is possible—indeed, it is what the literature shows—that companies acting in monopolistic ways or capturing markets are themselves responsible for a lack of competition?
Mr Baker
I have; I am grateful to the hon. Gentleman, my colleague on the Treasury Committee, for saying that. I absolutely have, but perhaps not the same extent that he has. I certainly cannot quote the passage that I know he has in mind.
I say to the hon. Member for Newcastle upon Tyne Central that I certainly did not suggest that a lack of competition is due only to the Government. I think she has applied her own ideas about what I stand for in order to come to that conclusion. I shall certainly read Hansard very closely tomorrow to see whether I suggested that. What I am suggesting is that in a taxonomy of six different categories of anti-competitive market distortion set out in a serious journal of competition law, two sub-categories of one category relate to mistakes that can provably be seen to be made by competition authorities. They are not perfect; no human institution is perfect, including competition authorities.
We are undergoing a process of becoming more open to trade, as indeed we should—seeking comparative advantage, seeking to supply new markets, and seeking to buy from new markets in order to drive down prices. However, the experience of trade negotiators whom I have consulted is that if we go and talk to nations in which the largest segment of the economy is agriculture, we find that we cannot do a deal with them if we take agriculture off the table. Why? Because of the extent to which we subsidise it. We must ensure that agriculture is well looked after, within the expectations that the Government have set; we must ensure we can continue to supply food. What we must not do, though, is try to negotiate with other nations if we ourselves are substantially distorting our own domestic markets in such a way that they cannot hope to compete with us.
I want to impress on the Government—there is substantial literature about this issue—that it is conceivable that both domestic and global productivity could be radically improved for the long term by means of a productivity and consumer welfare Act, which would entrench the very best of competition policy in British law in order to eliminate anti-competitive market distortion.
Peter Kyle (Hove) (Lab)
It is good to serve under your chairmanship again, Mr Deputy Speaker. It is also good to follow the hon. Member for Wycombe (Mr Baker), because his was a very different speech from the one that I intend to make. I hope that the two will prove complementary in some way.
I begin by thanking the hon. Member for Warwick and Leamington (Chris White). It was good of him to initiate the debate, and very generous of him to invite me to co-sponsor it and accompany him to the Backbench Business Committee to make the pitch for it. It is extremely timely, and his opening speech served the tone of the ensuing discussion very well indeed.
“Industrial strategy” is a contested term, and one with which some Members on both sides of the House struggle, because almost every post-war Government who have tried to implement such a strategy have come up against one difficulty or another. However, I think it is quite simple if we focus on the strategy side of what needs to be delivered and what business needs. That is the bit that many businesses want the most, and it is the bit that the Government, in various different ways, have often failed to deliver.
“Strategy” means, quite simply, identifying with clarity where we are, spelling out with clarity where we want to go, and being aware of the bridge that links the two together. If the hon. Member for Bedford (Richard Fuller) were still in the Chamber, he would, I hope, have noticed that I did not use the words “long term”. In fact, it is always a mistake to spell out exactly how long a journey of this kind will take, because different parts of the strategy will take different periods of time.
Business needs clarity and consistency. I think the House will be informed if I give two examples from Governments—not just this Government but a previous one as well—that involve both clarity and consistency. Sadly, they are not good examples from which we can learn, but examples that we need to avoid in the future. I begin, unfortunately, with a contemporary example. In the past week, members of the Business, Energy and Industrial Strategy Committee have received a letter from the Secretary of State for BIS. I apologise to the Minister; I still call it BIS, because I think the new title, BEIS, sounds a bit like a kitchenware product. At the moment it seems be a gadget that does something with a wet lettuce, but we will see how it goes.
This is what the Secretary of State wrote in his letter about the industrial strategy that he will unfold and lead:
“Many of the key components of our industrial strategy will not be about particular industries or sectors, but will be cross-cutting. It will be relevant to people and businesses across the UK—for people as consumers and employees, and for businesses as investors and drivers of growth. It will also respond to and seize the opportunities presented by the transformations we are faced with in 2016—both domestically in our exit from the European Union, and in wider global trends.”
I am sorry, Minister, but that is a mission statement. It is not a strategy. It encompasses consumers and domestic, nationwide, international and global businesses. There will be a strategy for every aspect of business. Every business—from the self-employed right the way up—will be encompassed in one strategy. The Minister is nodding to say that it will be delivered; I think it will be wonderful, and I look forward to seeing how all that can be encompassed in one strategy. I support the notion of an industrial strategy, and I hope that it can be delivered. However, from that starting point, I start to have sympathy with the scepticism of the hon. Member for Bedford. I would never have imagined that.
I turn to the position of the last few Governments. The industrial partnership approach was introduced by Vince Cable in 2014 when he was Secretary of State. In 2014, his Department in the coalition Government introduced—I quote from the website at the time: “An industrial partnership” that
“brings together employers across an industry sector to lead the development of skills, with a focus on growth and competitiveness. There are currently 8 partnerships covering the aerospace, automotive, creative, nuclear, digital, energy & efficiency, science and tunnelling (construction) industries.”
It went on to say that all those partnerships would be
“funded up to March 2017”.
Unfortunately, the funding for that programme was cut in September 2015. Not six months after Vince Cable left office, the funding for the flagship industrial strategy of that time was cut.
Just last week, I received a response to a parliamentary question. The question was:
“To ask the Secretary of State for Business, Energy and Industrial Strategy, what role Industrial Partnerships will play in delivering the Government’s Industrial Strategy.”
The response was:
“The Department for Business, Energy and Industrial Strategy indicated that it will not be possible to answer this question within the usual time period.”
That non-answer says more than many of the real answers that I have had from the Department. It is not prepared to implement the strategy as we see it at the moment. We do not know what the strategy is, or how it will go forward. We do not even know whether any strands of previous strategies will be taken forward.
What does that mean to businesses on the frontline? In the past two years, we have had a clear sectoral approach to business strategy by one Secretary of State, but six months later it was changed by a Government who had no industrial strategy and refused to use the words “industrial strategy”. Now we have a Department with “Industrial Strategy” in the name. That is all over two years. Businesses are having to respond to that profound change in a rapid space of time.
Mr Baker
Along with anti-competitive market distortion, regime uncertainty is a problem. Exactly the phenomenon that the hon. Gentleman outlines causes businesses to make less profit than they otherwise would. I am sure that he would agree that it would be better if the Government did less.
Peter Kyle
I am sure the hon. Gentleman would agree that we would both want the Government to do more of the right things. So why do I not have a stab at spelling out what the right things are? There needs to be a focus on what businesses that create growth and quality jobs and generate tax want. What do they need in order to support their business? Many do not need any help from Government, but all are affected by Government policy in one way or another, because every business uses this country’s infrastructure, whether that be the internet, the roads or other transport networks. Government policy has an impact on businesses, whatever those businesses are. Getting the strategy right and listening to the voice of business as that infrastructure unfolds is at the core of how we can go forward.
What do businesses want from Government? The one thing that links all the things they want—we could go through many of the issues that are mentioned to us by businesses and industry groups that helpfully contact us, such as the EEF—is skills. It is good to have the Skills Minister here responding on behalf of a Department that—
The Minister for Universities, Science, Research and Innovation (Joseph Johnson)
Universities Minister.
Peter Kyle
I beg the Minister’s pardon. I apologise. I am grateful that the Minister is here. He is split between Departments and can perhaps answer on this cross-cutting part of his brief. Skills are the issue that one comes across from every business. Unfortunately, responsibility has moved from the Business Department to Education. Is it conceivable that that could mean that business will have a louder voice in the House as the skills agenda unfolds over time? I think it is inconceivable.
What can Government do that businesses cannot do? There are—and I hope this answers the point made by the hon. Member for Wycombe—some things Government can do that others cannot. How can the Government inspire, encourage or enable businesses of the future? First, through infrastructure. Secondly, let us look back to 2000, when Tony Blair and Bill Clinton, via video link, together announced the mapping of the human genome. That was achieved by two Governments working together on a scale that no individual business could match, and certainly never without a patent. All the innovation that has spread from that single gesture by two Governments has spawned many industries since in academia and the private sector—for instance, in pharmaceuticals—and medical advances.
Those are the types of things that businesses need to be looking to. Government can do those things as part of a strategy, and I look forward to the Minister responding accordingly.
The Minister for Universities, Science, Research and Innovation (Joseph Johnson)
By speaking relatively early in the debate rather than at the end, I want to signal that the Government do not intend at this stage to have the last word on the country’s industrial strategy. Such plans, which must command the support of successive Administrations, must be built on strong foundations of engagement, discussion and careful consultation across the Government and, indeed, across the country. As has been said, they should not be imposed from 1 Victoria Street or, indeed, anywhere else in Whitehall.
The industrial strategy is under development, as hon. Members have observed, so now is not the time to set out detailed plans for our approach. We expect to publish a discussion paper around the time of the autumn statement and then a response from the Government in the new year, 2017.
Joseph Johnson
At the autumn statement this year.
Let me give Members a broad overview of the context in which we are developing the industrial strategy and a flavour for some of the principles guiding us as we do so. First, however, I want to thank my hon. Friend the Member for Warwick and Leamington (Chris White) and the hon. Members for Hove (Peter Kyle), for Edinburgh West (Michelle Thomson)—who is no longer in her place—and for Hartlepool (Mr Wright) for securing the debate and making such powerful contributions.
The UK economy has delivered a huge amount of growth and employment over recent years. Unemployment has been reduced from 8% in 2010 to 5% now, while full-time employment has climbed from 70% to 74% over the same period—a faster rate of employment growth than France, Germany or the USA. But, as the Prime Minster has made clear, our economy is not working perfectly. Gains are not always shared across the country and too many people are losing out. We want to deliver an economy that works for everyone.
George Kerevan
Will the Minister add to that catalogue of statistics that exports have flatlined for the past five years?
Joseph Johnson
Our export performance is one of the features of our economy that we are seeking to improve through our industrial strategy, and I am looking forward to explaining a bit more about how we will do that.
The UK has the second lowest productivity in the G7, a fifth below the G7 average, and closing just half that gap would add £250 billion to the economy by 2025. A proper industrial strategy can play a key role in that, by delivering real benefits to the work and lives of businesses, consumers and employees.
Kelvin Hopkins
I, too, am concerned about our low productivity. Does the Minister not accept that a factor in that is cheap labour? If wages are low, that does not encourage companies to invest and become more efficient. We have a history of driving down wages or keeping them too low.
Joseph Johnson
Wages by and large correspond to the value added per hour worked that a company is willing to pay for. What is important is that we increase the average skills level in our workforce, so that we have a skills base that is globally competitive and able to command the wages in a market economy that we want people to have.
When Governments fail to look ahead and make the right long-term decisions on fundamentals such as tax, infrastructure, research, education and skills, they are abdicating responsibility. Such plans require us to take not a partisan approach but one that seeks to establish common ground. I am delighted that so many Members from all parts of the House have participated in the debate today, and I thank them for doing so.
I want to say a bit more about the principles guiding our approach to industrial strategy. The first thing to say is that developing a proper strategy takes time. It is not something that we can drop out overnight. We need to engage with a wide range of organisations and people to design and deliver a strategy that can have a real and lasting impact. That means engaging with Members, including through the Business, Energy and Industrial Strategy Committee’s welcome inquiry on industrial strategy. It also means spending time over the coming months engaging with businesses of all sizes and sectors, investors, local leaders and consumers, so that we can reflect their views and build on their knowledge and experience.
Our industrial strategy will necessarily be wide ranging, but that should not be at the expense of clear focus, so I would like to say a few words about where we will be concentrating our efforts. First, building on proven strengths is a cornerstone of good strategy, and as many Members have observed, this country has no shortage of them. For a start, let us acknowledge our powerful record on science and innovation. Only America, with a population nearly five times our own, has more of the world’s top universities, Nobel prizes and registered patents. The UK has the most productive science base in the G7 and has overtaken the US to rank first among comparable major research nations for field-weighted citation impact, a key measure of research quality. This is hugely important. Science, research and innovation are essential to our future and must be at the core of any effective strategy for the long term.
Hannah Bardell (Livingston) (SNP)
The Minister is talking about the science and technology research sector. Will he acknowledge that leaving the EU will create huge risks for that sector? Will he tell us how his Government will respond to those risks?
Joseph Johnson
Our research base is globally competitive, and organisations and scientists from around the world are keen to collaborate with institutions in this country. Collaborations between institutions in the UK and others around the world have some of the highest impacts of any science undertaken anywhere. We are desirable partners for collaboration, and I have every expectation that, with the support of the Government, we will continue to be a globally competitive science power in the years to come.
We are competitive in science, but we are also at the cutting edge of industry—for example, in advanced manufacturing. In the UK, almost 1.6 million cars were produced in 2015, up 4% on 2014 and up by nearly 60% since 2009. The hon. Member for Hartlepool asked why the Government did not procure cars for its fleet solely from Nissan in Sunderland. I must point out to him that we make fantastic cars all over the country. I believe that the Prime Minister drives a Jaguar XJ that was built in Castle Bromwich in the west midlands. So there is no need to buy cars from only one place in the United Kingdom. Globally competitive cars are made in a vast number of locations in the UK.
George Kerevan
Surely, the Minister is aware that we have a net deficit in trade in automotive products. We assemble car parts that are brought in from the rest of the world.
Joseph Johnson
The hon. Gentleman might recall that there was a point during the last Parliament—I think, in 2013—when this country became a net exporter of cars for the first time since 1975, when the then Labour Government nationalised British Leyland. It is the automotive policies of this Government and our predecessor coalition Government that have taken the car industry to the heights that it currently enjoys and that have not been seen since the early 1970s.
Kelvin Hopkins
Like the Minister, I think that the British motor industry has a brilliant future—provided that our currency remains relatively competitive. Does he accept that we do well in export markets outside the EU but poorly inside in the EU because of the uncompetitive exchange rate? I think that we still import four times as many cars from Germany as we export to Germany. It is our trade outside that makes the difference.
Joseph Johnson
I thank the hon. Gentleman for his observations. I will take a look at the statistics that he mentions. The car industry is just one example of advanced manufacturing in which we excel at the moment.
Joseph Johnson
I am going to make a tiny bit of progress and then I will give way.
Mr Baker
I hope that the Minister will join me in celebrating this country’s excellence in not only manufacturing, but research in Formula 1. We have a number of teams in the UK. We are also the world’s second biggest aerospace manufacturer after the mighty United States. We do tremendously well, and Opposition Members are far too downbeat.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I welcome interventions, but when Members see the speaking time drop down to five minutes, they will understand, won’t they?
Joseph Johnson
Another globally competitive sector is satellite technology, with a quarter of all satellites launched into space currently being made in Stevenage.
Science and advanced manufacturing are, of course, not the only examples of excellence. We can point to other parts of our economy such as financial services, accountancy, law, consulting and creative industries that also set the global standard. We have worked hard over the years to make Britain one of the best places in the world to start and grow a business. We are creating a business environment that supports growth, by encouraging long-term investment and a dynamic economy with open and competitive markets. That has included backing business by cutting corporation tax to 17% by 2020, slashing red tape by a further £10 billion and making major investment in the UK’s research infrastructure.
We have a strong base to build from. The question is how we can make the most of it, but we are not starting from scratch. Previous industrial strategies have seen success in particular sectors. Our challenge now is both to build on our competitive advantage and to identify and support the sectors that can drive future growth. This is not about picking winners, which hon. Members have urged against, nor about propping up failing industry or bringing old companies back from the dead. We must be open and ready for new competitors and open to welcome new disruptive industries that may not exist anywhere today but that will shape our future lives. It is about identifying industries that are of strategic value to our economy and supporting and promoting them through policies for trade, tax, infrastructure, skills, training and R and D.
It is hugely important that we take a local approach to strategy. Governments are fond of quoting national figures—I have already quoted some myself—on economic growth, productivity and employment, but the truth is that economic growth does not exist in the abstract; it happens in particular places when a business is set up, takes on more people or expands its production. The places in which businesses operate are a big part of determining how well they can do. We must recognise the strengths of areas across the country, including the midlands engine and the northern powerhouse. We have a strong framework in place to do that, such as through local enterprise partnerships or, as mentioned by my hon. Friend the Member for Wimbledon (Stephen Hammond), our network of universities and our enterprise zones.
Through our science and innovation audits across the UK, led by local areas, we are mapping research and innovation strengths and infrastructure to identify and build on areas of greatest potential in every region. Such strengths are too often overlooked outside the golden triangle of London, Cambridge and Oxford. Through our catapults, the sectoral centres of excellence based across the country, we are supporting innovation where UK businesses have the potential to be world leading and to address local disparities in productivity.
Helping all parts of the country contribute to national success is key to our planning and a cornerstone of our approach. What is needed in each place is different and our strategy must reflect that. That is why many of the policies and decisions that form our industrial strategy will be not about particular industries or sectors, but cross-cutting. For us to succeed in the future, we need to have the right infrastructure—roads, rail, broadband and mobile—to connect businesses to their workforce. New infrastructure such as Crossrail is about to open, but we still have bottlenecked roads, overcrowded trains, and broadband and mobile coverage that needs upgrading.
We also need to upgrade our skills base. We need a rising generation of young people who are not only better educated than those of our competitors and their predecessors, but also better trained.
On schools, we have announced £67 million for the next five years to recruit and train an extra 2,500 maths and physics teachers, and to upskill 15,000 existing maths and physics teachers. We need to make sure that vocational education, especially in engineering and technology, plays a much more prominent role in our country than it has for many years now. We also need a modern system of corporate governance, too. The Prime Minister has also already made it clear that we will look at that area, including further reforms on executive pay, as part of the Government’s work to build an economy that works fairly for everyone, not just the privileged few.
Several hon. Members rose—
Mr Deputy Speaker (Mr Lindsay Hoyle)
I ask Members to take up to seven minutes, to try to get everybody in equally.
Kelvin Hopkins (Luton North) (Lab)
I am pleased to participate in this important debate, and I congratulate the hon. Member for Warwick and Leamington (Chris White), not only on securing it, but on what he said, which was excellent.
British industry has suffered for too long from neglect and diminution, and I am pleased that the Prime Minister has chosen to reintroduce the term “industrial strategy”, one that I cannot recall being advanced by our political leaders for a very long time. She has also suggested that the state must have a role in promoting and managing our economy, and ensuring that it is healthy and strong and will serve the citizens well. The state cannot simply stand idly by and let the markets do their worst, and I am pleased that an era when that was too often the case now seems to be coming to an end.
I have differences with the hon. Member for Wycombe (Mr Baker), whom I admire and like in many ways, as I am a statist and he is not. Some 18 years ago, I tried to press the new Labour Government to intervene—to consider intervention—but my plea fell on deaf ears and I was told by a humorous Back-Bench comrade that that sounded too much like socialism. Governments of all colours since the 1970s have allowed much of our manufacturing sector to wither and reduce. We still have some fine manufacturing, as the Minister has said, but the whole sector is too small and cannot produce enough to bring any kind of sensible and sustainable balance to our economy. We have allowed an enormous trade deficit to emerge, above all in manufacturing, and primarily with the European Union. The pound has been grossly and persistently overvalued, above all against the euro, and has been a prime cause of our manufacturing weakness. We now, at last, have some relief, with the depreciation of sterling since the referendum, and already the economy is beginning to benefit. I look forward to renewed growth in our manufacturing industries and to our trade deficit reducing.
Lord Mervyn King, the former Governor of the Bank of England, said this month that Britain was borrowing 5% to 6% of GDP a year simply to buy imports and live beyond its means—this prosperity was an illusion borrowed from the future, fine for people who wanted to buy a Mercedes-Benz or have a holiday in Spain, but doing nothing for British industry. Professor Ashoka Mody, the former deputy director for Europe at the International Monetary Fund, has said:
“The idea that Britain is in crisis or is on its knees before the exchange rate vigilantes is ludicrous”.
He also said:
“The UK economy is rebalancing amazingly well.”
We should all welcome more of that.
Manufacturing based in Britain has bright prospects, provided the exchange rate is kept at a sensible level; exports will rise and import substitution will see domestic sales of UK products booming. There will probably be a J-curve effect at first, until goods already committed diminish and quantitative effects take hold, but that will not be long in coming. I have already suggested to some of our motor manufacturers that they would now do well to expand their supply chains in Britain and reduce their proportion of imported components. I am convinced that the motoring sector will be doing brilliantly in future years if they do that. We should not forget that Britain is a massive market, to which our own producers should be supplying more.
I want, however, to press the Government further in a virtuous direction regarding our industries. I urge the Government to give serious thought to recreating the National Economic Development Council—Neddy—and the little Neddies for the various industrial sectors. That was an agent of what was then called “indicative planning”, bringing together representatives of business, Government and trade unions. The NEDC was hardly socialism, set up as it was by Edward Heath’s Government, but it did valuable work and could do so again.
There is much more we need to do to make our industrial strategy a long-term success, but an appropriate exchange rate is a vital if not sufficient condition for success. On that score, let me say just one more thing: the euro is proving to be a disaster, particularly for southern Europe. Its future is, thank goodness, now in serious doubt, with Italy in crisis, along with Greece and others. I believe the euro is actually the Deutschmark in disguise, with a number of weaker currencies bolted to it, holding down its value at a falsely low level. That is not only crippling for those weaker economies, but disadvantageous for us. It will be better for those European economies, as well as ourselves, when national currencies are re-established and are allowed to move to appropriate parities. The end of the euro would be good news for us all and, especially, for Britain’s industries.
Finally, let me say that outside the EU we will be free to use smart procurement to benefit British industries and to use state aids as we see fit. If that is protection, I welcome it.
Mr Alan Mak (Havant) (Con)
I congratulate my hon. Friend the Member for Warwick and Leamington (Chris White) on securing this important debate on a key aspect of the Government’s policy programme. I begin by welcoming the creation of a new Cabinet Committee on industrial strategy, which will put science, technology, innovation and exports at the heart of the Government’s agenda. I also welcome the Secretary of State’s speech at the Royal Society in July in which he committed to supporting new technologies and new industries as a key part of this new industrial strategy.
My argument is that only by embracing the fourth industrial revolution as part of the industrial strategy can we truly achieve our potential as an industrial power in the 21st century. This fourth industrial revolution—the unprecedented fusion of technologies that blurs the traditional boundaries between the physical, digital and biological spheres—is already transforming industrialised economies around the world, including our own.
That revolution is now accelerating and leading to breakthroughs and new products in fields such artificial intelligence, advanced robotics and the internet of things. I am talking about driverless cars, drones, 3-D printers and nanotechnology to name but a few. They have already captured the imagination of the British public and now the attention of our policymakers. Mastering and leading the fourth industrial revolution should be at the heart of the new industrial strategy for our own country. What is clear from the experiences of other nations is that countries that are best able to take advantage of this new revolution are those with nimble economies, supportive Governments, low taxes and a competitive regulatory regime.
I am pleased that the Minister has confirmed that the Government will continue to focus on pro-enterprise and pro-innovation policies, which make Britain a world leader when it comes to starting and growing a business and exporting to the world.
I wish to offer three suggestions to the Minister and his colleagues as they develop our new industrial strategy for this century. First, the economic benefits of the fourth industrial revolution must be shared throughout the country, including in places such as Havant, and not just concentrated in London. Regional investment funds for 4IR technologies should be made available to promote regional growth hubs that stimulate growth and innovation outside the M25. I see local enterprise partnerships as a key partner, building on the success of the Government’s catapult centres, which the Minister mentioned in his remarks.
I very much welcomed the Chancellor’s announcement in Birmingham a few weeks ago that an additional £100 million will be made available to extend the biomedical catalyst and that there will be an extra £120 million for universities across Britain to fund new tech transfer offices. Those are welcome and forward steps. Research UK and Innovate UK—both Government-backed bodies—should also continue to ensure that their work and funding are truly national.
Secondly, the Government should use their procurement power to buy British when it comes to 4IR products. Other advanced economies such as Israel already play a key role in helping new sectors and new industries to develop, and our Government should do the same. The news that our Ministry of Defence has launched a new £800 million fund to promote defence innovation is therefore very welcome and a good example for other Departments to follow.
Finally, Britain must continue to invest in digital infrastructure, which is as essential to our future economy as railways were in the age of steam. This should include a new phase of the fibre-optic broadband roll-out, and 5G mobile internet.
I have put my thoughts in a new paper, which I have written with the free enterprise group of MPs and which is backed by the Institute of Economic Affairs. I look forward to sharing it with the Minister just before the autumn statement, and hope that he will come back to me on it.
In the meantime, I hope that the Minister will agree that, as the fourth industrial revolution gathers pace, we should embrace it and encourage it as part of our new industrial strategy. Throughout our history, Britain has adopted a pro-innovation and entrepreneurial approach to technological development. From farming mechanisation to domestic labour-saving devices, we have never allowed our fears about the future to hold back our economic or social progress. We soon realised, for example, the folly of requiring early cars to be preceded by a man carrying a red flag. We must adopt the same forward-thinking approach when it comes to the fourth industrial revolution and our new industrial strategy. Just as happened in centuries gone by, this new wave of technology can certainly bring about substantial benefits, from greater productivity, new jobs and lower production costs to more choice for consumers through new goods and services. If we deliver all those things as part of our new industrial strategy—more jobs, more productivity, lower production costs and more choice—we will certainly have delivered an economy and a country that works for everybody.
Hannah Bardell (Livingston) (SNP)
It is somewhat ironic that we discuss industrial strategy following a debate on the scandal and tragedy of the collapse of BHS, especially given that one of the Government’s emerging pillars for their industrial strategy is:
“New corporate governance structures, including consumer and employee representation on boards, and greater transparency around executive pay”.
It is a shame that the Government’s industrial strategy was not in place before Philip Green got his grubby mitts on BHS.
The Government’s plans for a strategy come as we face a post-Brexit prospect of being out of Europe and out of the single market. The uncertainty caused by the UK’s decision to leave the EU and the Tories’ lack of a Brexit plan seriously damage the long-term planning capacity of firms and the UK’s trade outlook.
When one tries to ascertain what exactly the UK Government’s industrial strategy is, it appears that one needs to be a sleuth, as even the Library research team were challenged. Its debate pack, which is excellent as usual, states:
“This note brings together the limited information that has been published since Theresa May became Prime Minister which provides clues as to the how the Government’s industrial strategy will operate.”
We have limited information and only a few clues, but I am sure that between us we can cobble something together!
We know of some of the terrible failings of the Prime Minister’s predecessor. He and his Cabinet presided over a complete failure of long-term strategic planning, which has only perpetuated the productivity slump in the UK economy and low wage growth, and increased social, regional and gender inequalities. On an output per worker basis, UK productivity is 20% below the average of the other G7 countries, as the Minister mentioned. UK workers have suffered the biggest fall in real wages among leading OECD countries between 2007 and 2015, with their wages dropping by a shocking 10.4%. That is a terrifying statistic, given that our workers’ rights and conditions are under threat as we leave the EU.
We have seen the carbon capture project scrapped, feed-in tariffs for renewable energy schemes cut, and innovation grants turned to loans, and that is all before the UK faces losing access to the valuable Horizon 2020 EU research funding. The UK Government say they are taking back control—
Kelvin Hopkins
The hon. Lady and many other hon. Members talk of losing EU funding, but if we simply replace EU funding with British funding, we still make a £10 billion profit by not paying into the budget.
Hannah Bardell
If only it were as simple as that; the arrangement might be somewhat more complex.
The steel sector in England and Wales has been crying out for support, yet the Government were flat-footed in their response. In contrast, the SNP-led Scottish Government worked tirelessly to find a new operator for the Dalzell and Clydebridge plants. Our First Minister said she would leave no stone unturned and that is exactly what she, her Government and the Scottish steel taskforce did.
What next for industrial strategy? We are all wondering and waiting with bated breath. When the Prime Minister created the new Department for Business, Energy and Industrial Strategy she brought together two of the most significant Government Departments. It is good to see a sharper focus on industrial strategy, even if only in name. As we all know, this Government are expert in meaningless rebranding. Of course, there are two areas missing from the departmental name—innovation and skills. The Minister touched on those aspects and it is vital that we continue to focus on them.
We see as key to a successful strategy sustainable and inclusive growth which closes the gender gap and ensures that women and people of all backgrounds across our society are welcomed and included in our workforce. We need to be seriously more ambitious about a diverse workforce. In March this year the Equality and Human Rights Commission published a damning report which said that women were being held back by the old boys’ network. It stated, as the BBC reported, that
“nearly a third of the UK’s biggest companies largely rely on personal networks to identify new board members”,
and that
“most roles are not advertised”.
An EHRC commissioner was quoted as saying:
“‘Our top boards still remain blatantly male and white’”.
The study, which looked at appointment practices in the UK’s largest 350 firms, which make up the FTSE 100 and FTSE 250, found that more than 60% had not met a voluntary target of 25% female board members.
Kirsty Blackman (Aberdeen North) (SNP)
On that point, does my hon. Friend agree that the studies that came out recently about the motherhood penalty are particularly concerning, and something the Government need to tackle as soon as possible?
Hannah Bardell
I absolutely agree with my hon. Friend. These issues transcend party politics, and I know the Conservatives are doing their best, but, unfortunately, it is just not good enough, because in 2012-13 and 2013-14—the period of the study—fewer than half of the companies increased their female board representation. The Equality and Human Rights Commission said the problem was particularly acute with executive roles, where nearly three quarters of FTSE 100 companies, and 90% of FTSE 250 companies, had no female executives at all on their boards during the time covered by the study. Despite the fact that there are no longer any all-male boards in the UK’s FTSE 100 companies, the Equality and Human Rights Commission said very clearly that the “headline progress” of Britain’s biggest companies was “masking the reality”. Closing the gender pay gap, at which Scotland is already outperforming the UK, should also be a key priority.
Skills and innovation must be at the heart of the UK Government’s approach to industrial strategy. A statement released by the Prime Minister on 18 July outlined that apprenticeships and skills will now be under the jurisdiction of the Department for Education. The new Department for Business, Energy and Industrial Strategy deals with business, industrial strategy, science, innovation, energy and climate change. I and others fear that removing apprenticeships and skills from matters of industrial strategy as part of that shift may lead the Government to lose focus on the skills agenda. We look for certainty that that will not happen.
We have seen a strong focus on those areas in Scotland as a result of the Scottish Government’s labour market strategy, which will provide up to half a million pounds to support the fair work convention; double the number of accredited living wage employers from 500 to 1,000 by next autumn; and provide £200,000 to Business in the Community. The strategy also encourages innovative ideas about how to bring business and Government together to form a fairer, more inclusive society.
On the subject of employee participation in industry, I welcome the remarks the Prime Minister made when launching her campaign to be Conservative party leader about putting employees on company boards. I hope she honours that commitment. I am a big supporter of employee contributions to company decisions, and particularly of co-operatives. Having spoken previously about the benefits of co-operatives not just to their businesses but to the engagement and success of employees themselves, I hope the Minister intends to follow through on that promise. Will he also look specifically at the apprenticeship levy and its application to co-operative companies? I have spoken to a number of companies, including companies such as John Lewis, that are concerned they are being treated unfairly under the apprenticeship levy.
At this early stage, while the strategy is still being formed, let us remember what truly drives a fair and productive industry: investing in a diverse, skilled workforce, from apprenticeship to pension; working together with business, local and international; and encouraging innovation from the bottom of the workforce to the top executives. The Government need to get a grip.
Amanda Milling (Cannock Chase) (Con)
I congratulate my hon. Friend the Member for Warwick and Leamington (Chris White) on securing this afternoon’s debate. I would like to focus my contribution on one of the points the Minister made—the role of local bodies in the delivery of industrial strategy at a regional level.
The Government’s focus on industrial strategy, and their continued support for regional development in areas outside London, are welcome news in my constituency. The timing is also incredibly pertinent. The closure of Rugeley B power station in the summer was a real blow to the workforce and the community. It was a real turning point; for decades, Rugeley has had an economy based on the energy industry, being home to mines and power stations. For a long time, that was the main source of employment. The closure of Rugeley B is the end of that industrial heritage, and the question I am regularly asked is, “What next for Rugeley’s economy? What next for the next generation?”
The closure of the mines and Rugeley A power station saw the creation of industrial estates, business parks and housing, and the area is home to one of Amazon’s fulfilment centres. However, the redevelopment of the Rugeley B site presents a real opportunity to develop a strategic vision that creates a long-term sustainable local economy in Rugeley that creates skilled jobs and opportunities.
In creating a strategy for Rugeley, we need to consider other land sites that will become available for development in the coming years, including the site that is currently home to JCB Cab Systems and the land that could be developed once the flood defence scheme has been completed. In short, there is a need, and a real opportunity, to create a more strategic plan for Rugeley. I am calling on all the relevant bodies, including Cannock Chase District Council, Staffordshire County Council and the two local enterprise partnerships, to look at the Rugeley B site, not just in isolation but in the context of other land sites. The vision needs to be ambitious and strategic, taking account of the growth in new industries and technologies, and sectors of growth. There is a great danger that we fall into a trap of just doing “more of the same”. This is where the Government’s industrial strategy can help us scope an exciting new vision for Rugeley.
My hon. Friend the Minister referred to innovation. Rugeley was at the heart of innovation in the energy industry. I have mentioned before in the House that the four cooling towers are in two different colours of brick because people were trying to decide which was the most likely to blend into the countryside; they failed completely. Rugeley is ideally placed to home new industries, including digital and technology industries, given the infrastructure that already exists. Indeed, there is a connectivity crossover where fibre-optic broadband and the national grid meet. This makes the area particularly well placed to home data centres, as well as an innovation hub. The Minister also mentioned advanced manufacturing, where the region has real strength. I am very fortunate to have companies such as ATP Electronics and Gestamp in my constituency. I hope that we will build on companies such as these.
That is not to say that we should be turning our back on our energy heritage. Only this morning in the BEIS Committee, we met stakeholders from the energy industry who highlighted the importance of the sector. With the closure of coal-fired power stations, there is a desperate need to build gas-fired power stations as part of our mix of energy sources. As the national grid infrastructure is already in place, Rugeley is ideally placed to home a gas-fired power station. Earlier in the debate, the Chair of the Committee, the hon. Member for Hartlepool (Mr Wright), made the important point that industrial strategy needs to be cross-departmental. I have previously raised with Ministers issues about the cumbersome process for securing planning for a gas-fired power station on sites where there had been coal-fired power stations. This is not a change of use. I ask BEIS Ministers to review this with their colleagues from the Department for Communities and Local Government.
The redevelopment of Rugeley is a once-in-a-generation opportunity. I believe that all bodies involved in the planning process are strategic and visionary, and bold and ambitious, and that they can create a home for successful and innovative businesses that create real, skilled jobs and opportunities for the next generation. An industrial strategy that has productivity at its heart, encourages entrepreneurship and innovation, and creates opportunities for young people could provide the framework to ensure that we create an exciting future for Rugeley.
Kirsty Blackman (Aberdeen North) (SNP)
I have spent a lot of the past two days in the Chamber, and it has been pretty instructive. Yesterday I learned the word “contemporaneous” and today the word “oligopoly”, which I had not heard before, so I feel as though I am learning things. The thing that I have not yet learned is what an industrial strategy is, because everybody in the entire Chamber has come up with a different idea of what they think it is and what it should be. I am not going to break with that; I am going to say what I think an industrial strategy should be.
As Members would expect me to say, oil and gas should be top, front and centre of the UK Government’s industrial strategy. It is, without question, the most important industry in the UK. Over the five years from 2008 to 2013, the average annual tax revenue from the oil and gas industry was £9.4 billion. That figure represents direct production taxes; it does not include all of the economic benefits to wider economic areas that the UK Government have also seen.
The industry is not having the best of times: the oil price is low and we are struggling and losing jobs. Things are not all that much fun in Aberdeen and the north-east, which is why it is even more important that this Government commit to ensuring that the oil and gas industry is right up there in the industrial strategy. The oil and gas industry has a bright future, but we need to ensure that Members in this place in particular understand what is happening in the industry and take positive action to secure its long-term future.
Aberdeen city, Aberdeenshire and, indeed, the UK as a whole are the absolute gold standard for the oil industry across the world. If a technology is being used on the UK continental shelf, companies know that it will be accepted anywhere across the world and they will say, “That’s brilliant. It’s the gold standard and we should do that.” The Government need to ensure that that continues.
There is no doubt that we will be taking oil out of the North sea for a long time yet. People can have a discussion about exactly how many billion barrels of oil are left, but everybody agrees that there are billions left. We need to ensure that we maximise the amount of oil that we extract from the North sea, and that our supply chain companies are supported to continue to do the brilliant work that they do on the UKCS and in exporting. It is an export industry. In 2013, Aberdeen had the fourth highest number of patents per head of population of any city in the UK. It was not quite the highest, but we have done an amazing amount of innovation in our city, and we are acknowledged to be a centre of excellence. It is impossible to overstate how valuable that has been to the UK Treasury. We have paid taxes to it for years and we will continue to do so.
Kirsty Blackman
Absolutely. We need to ensure that we get UK Government support now and that companies are incentivised to invest. If they stop investing, the industry will not have a bright future. Some companies are struggling with cash-flow issues. The UK Government need to inspire confidence in the industry by ensuring that private equity people invest and that banks continue to do so. The industrial strategy must express the UK Government’s confidence in the future of the oil and gas industry. That is really important for Aberdeen, the north-east and the wider UK. So many jobs are indirectly linked to oil and gas, and we need to keep them.
I want to address a couple of the things that were mentioned earlier. On apprenticeships and the young work force, Aberdeen has an initiative called “Developing the Young Workforce North East”, which is a brilliant piece of work linking industry with schools. It resulted from Ian Wood’s 2014 report, “Developing the Young Workforce”, which was presented to the Scottish Government. We are making really positive moves and it is being widely welcomed and recognised. The UK Government should consider incorporating it into the industrial strategy.
I thank the Minister for listening and ask him please to make sure that the oil and gas industry is at the top of the industrial strategy.
Richard Fuller (Bedford) (Con)
It is a great pleasure to follow the hon. Member for Aberdeen North (Kirsty Blackman) and to congratulate my hon. Friend the Member for Warwick and Leamington (Chris White) on securing the debate. May I apologise to you, Madam Deputy Speaker, and to other Members for not being here for a number of speeches? I hope I do not repeat what has been said.
Richard Fuller
I know that there is little chance of that.
George Brown, the noble Lord Heseltine, the noble Lord Mandelson, Vince Cable—to this hallowed series of greats we should now add the names of the Minister for Universities, Science, Research and Innovation and the Secretary of State as the people who will champion industrial strategy for our country. There are no two better minds in this House that we could apply to the task, but my concern is that we are sending our best brains in pursuit of a nonsense.
As the hon. Member for Aberdeen North has just said, we do not know what industrial strategy is—no one has defined it. When I heard earlier that the Minister had not yet published what the industrial strategy was, I raised my hands in prayer. As long as the Government continue not to define their industrial strategy, they will keep themselves out of a great deal of trouble. As soon as they define it, people will start to disagree with them, because the phrase “industrial strategy” is a wonderful grab bag of good ideas. There are loads of ideas in industrial strategy, every single one of them good. Ne’er a one is a bad idea, because a bad idea will not be allowed into the industrial strategy. In industrial strategy, all are winners, because no industrial strategy will pick a loser. The Minister will always say yes, because with an industrial strategy, one can never say no.
I hope that the Minister will maintain his rather reticent approach to industrial strategy so that he can continue to be friends with all Members across the Chamber and not upset anyone. In the phrase “industrial strategy” it is, first of all, hard for him to define industry. Is financial services an industry? The word “industry”, as my hon. Friend the Member for Warwick and Leamington conjured up in his opening speech, is about manufacturing. What is strategy? Strategy is the pursuit of a goal, but what is the goal for an entire economy and, if there is a goal, how on earth is it the Government’s role to tell everyone what it is? That went out in the 1940s and ’50s with Soviet planning. I know that my friend the Minister has no interest in returning to those days, but unfortunately he may unwittingly, in his endeavours, encourage Opposition Members to think that the good old days of centralised socialism are back. He would not wish to be a fellow traveller on that journey to despair.
Industrial strategy, we are told, is positive because it enables us to think about the long term, but that is what shareholders do. We think about the news cycle and we think about the election cycle. We have to make sure that, in five years, we are re-elected. When we talk about consensus in other countries, we have to recognise that consensus in this country is built differently; it comes from the competition of ideas, and from one set of new ideas being subsequently accepted by the opposing party. The promotion by the Conservative party under Margaret Thatcher of a reduction in the power of trade unions and a liberalisation of markets was accepted by the subsequent Labour Government. The Labour Government’s introduction of the national minimum wage and regulation against discrimination in the workplace was accepted by the coalition Government. That is how we build consensus, and that is not compatible with the expectation that one can set an industrial strategy that stands for all time. The Minister will be here, I am sure, until he gets promoted, but at some stage—perhaps in 20 years’ time—the Opposition will get ready to take over power, at which point the long-term plan may be picked apart.
To be slightly more helpful to the Minister, I will point to some areas that he and his colleagues might like to look at. Although I would not call these things an industrial strategy, they might be good ideas. If we are to be successful, as my hon. Friend the Member for Havant (Mr Mak) mentioned, we have to promote innovation. Innovation is promoted by lowering taxes, ensuring that our markets are flexible, and looking carefully at regulatory sunsets to ensure that incumbents cannot use regulation to defend themselves against insurgents. Corporate governance also needs to be looked at seriously, as we discussed in the previous debate.
I commend my right hon. Friend the Member for Tatton (Mr Osborne) for his productivity plan, not because it was about projects, but because it for the first time concentrated on what the Government can do regarding strategy, which is the implementation of things that are helpful, particularly for infrastructure. We need only look at the difficulties with the expansion of airport capacity in the south-east to see that we are very poor at implementing the decisions we make. I commend the productivity plan to the Minister for him to look at again.
The Prime Minister has rightly said that the United Kingdom is at the forefront of free trade. That is something on which the Minister and I clearly agree. Free trade is what the United Kingdom does best. We need to make sure we have appropriate protection against dumping, but we also need to be on the front foot in lowering our tariffs.
We are leaving the European Union, which is a major event for the whole of our economy. I understand that the Government want to form a view on that and know what actions they should take in the short term to assist us through this transition to a better and stronger future. However, each of these are things that the Government would do anyway. We do not need a Department for industrial strategy to do them; we do not need such a Department to improve our skills. We do not need one to change the law regarding the governance of our boards, although I agree with the hon. Member for Livingston (Hannah Bardell) that the Government should do that. We do not need the phrase “industrial strategy”. I am worried for the Minister in that, as he pursues it, he will set the Government up for a fall. I, for one, want to support the Government in their endeavours so that that does not happen.
George Kerevan (East Lothian) (SNP)
I am glad to be tail-end Charlie. Fortunately for someone in this situation, my book on industrial policy is published next month, so I may save time and send it to the Minister.
The challenge is: is there is an industrial policy? I accept that there is no generic policy—the hon. Member for Bedford (Richard Fuller) is correct—but there is industrial strategy in the here and now. Its definition is what the state does to help to provide competitive advantage to the companies in that state. If the state does not do that, other states will help theirs, which will wipe out those companies. I remind the hon. Gentleman that that is why the UK’s exports have flatlined for the past five years.
I put that point to the Chancellor of the Exchequer yesterday, and he spoke about international conditions and lack of demand. Yet Germany’s total industrial exports have risen by a third in the past five years, helped by the German Government. They tax industry more than it is taxed in this country, but they pour the money back into industrial support. In the United States, generations of productivity growth have been funded by investment in its defence industries, which flows through into the private sector. The point about the state picking winners is that there is a partnership in which the state backs up its industries, and particularly its companies. The state gets out of the way where it needs to, but there has to be such a partnership.
I do not have a lot of time, so I will do something really strange, which is to support something that has been a Government policy for the past five years. I was originally very cynical about it, but the more I have researched it and talked to people in the industry, the more I think it has been very successful, although it may have been stumbled on by accident. That is the policy of having Catapult centres. Public money is put into centres for technology that small companies cannot buy on their own, so that such companies can use it, which helps to provide a competitive advantage. Catapult centres provide competitive grants and challenge companies to come up with solutions to problems, and that works. Catapult centres are the solution. They are not about picking winners, but about creating a competitive environment and providing resources. If we do not do that, other countries will.
To give a very simple example, there is a close correlation between exports as a percentage of GDP and how much is spent on research and development—not blue-skies R and D in universities, but industrial R and D. In countries that have a higher share of exports in their GDP, industrial R and D is orders of magnitude higher than the amount we spend, because their Governments and their military put money into it. The hon. Member for Havant (Mr Mak) made a very good point about the role of the military.
I found a statistic that my good friend the hon. Member for Wycombe (Mr Baker) might like, as an ex-RAF officer. At the moment, the RAF has 475 aircraft that were built in Britain. For the first time, the majority of its aircraft have been bought from abroad—507 of them. I should say that I tried to bump up the number of British-built planes by including the Spitfires in the Battle of Britain memorial flight. If we buy from Boeing and Lockheed, and let those companies use their technology, we cannot survive. We have to use the weight of the state behind our companies. That is what industrial policy is about.
My final point is that the budget for the Catapult centres is about £600 million a year. That sounds a lot, but if we look at a comparable organisation in Finland, we find that its budget is about 75% of that. The UK spend is peanuts. We should treble that amount. Will some of that money be wasted? Yes, but some will produce the ideas and new technology that we need.
Roger Mullin (Kirkcaldy and Cowdenbeath) (SNP)
What a pleasure it is to follow my hon. Friend the Member for East Lothian (George Kerevan). As he was talking, I wrote down the following: “Until I read my hon. Friend’s book, I will remain in some sympathy with the hon. Member for Bedford (Richard Fuller) and my hon. Friend the Member for Aberdeen North (Kirsty Blackman).” One problem, as I see it, with nearly every other contribution, except that of my hon. Friend the Member for Edinburgh West (Michelle Thomson) is that no one has mentioned what, to me, is critical in anything that calls itself a strategy—namely, what its purpose is.
What is the purpose of this thing we call an industrial strategy? Since we all have our own ideas to share, I am assuming that at the end of the day its purpose would be to help propel economic growth to support people’s wellbeing. That assumption might not be shared by everyone in the Chamber—I do not know whether it is shared even by my hon. Friend the Member for East Lothian—but I will frame my few remarks around it.
I enjoyed the opening remarks of the hon. Member for Warwick and Leamington (Chris White). He led the debate with a bit of a historical review of past efforts at industrial strategies. He also pleaded for us to look to the future in our new context. In that historical light, I was also interested to hear the hon. Member for Wycombe (Mr Baker) indicate that he had read the works of Adam Smith. Since my constituency, Kirkcaldy and Cowdenbeath, is the home of Adam Smith, I feel compelled to venture a few thoughts to continue the hon. Gentleman’s education.
Roger Mullin
I wish the hon. Gentleman would not mince his words—he should say it as he really feels it.
Where Smith has some relevance is in his argument that critical to growth was the division of labour in society, with specialisation—what we might call today the importance of having the education and skills that allow us to promote innovation and change. That is what spurs longer-term growth, and on that he was absolutely correct. That important need to drive forward with new technologies and new thinking is why it is utter madness that the Government pulled out of one of the biggest world-leading research projects, the carbon capture project in the north-east of Scotland. If ever there was an indicator of their turning their mind away from what is fundamental to long-term economic growth, it is that decision.
The other thing Adam Smith said that I completely approve of is that there is a role for state intervention. In particular, it is to ensure the kind of education that supports society economically as well as socially. We cannot leave education and skills to the marketplace. We have to make sure they are taken care of.
I was interested by the way in which Members talked about the importance of technology. It strikes me that historically, one of the problems we have had with funding is that we have plenty of people in our universities and the like who are able to come up with great technological ideas and innovations, but those innovations take many years to reach the marketplace. Private sector investment seems best when it is either at or near the marketplace. The problem, very often, has been the gap between the idea and bringing it to fruition. That is where the need for the role of the Scottish Investment Bank comes in, and I think that is what my hon. Friend the Member for East Lothian was hinting at when he talked about the valuable work of the Catapult centres. They can attract different forms of funding in a competitive way for things that may take time to reach the marketplace.
I was interested in the remarks made about the challenge that we face because of Brexit. The Government’s response, chaotic as it is, is driving down confidence. My hon. Friend the Member for Edinburgh West talked about the importance of confidence. That reminded me of what Keynes argued, which was that the principal determinant of the level of private investment is not the rate of interest nor even the level of aggregate demand, but the state of business confidence.
Kelvin Hopkins
I am listening with great interest to the hon. Gentleman. I always enjoy his speeches, I have to say. When it comes to the EU, however, does he not accept that confidence has been driven down by those who lost the argument and the vote, who are constantly saying that it will be terribly damaging and an economic disaster? In fact, as Ashoka Mody has said, it is actually proving to be quite beneficial.
Roger Mullin
I would take issue with the latter part of the hon. Gentleman’s observations. We were on the opposite side of the argument, but surely he would agree that the Government’s response to the vote has been utterly chaotic? We are no further forward four months later than we were at the time as to what the Government mean by Brexit and how they are going to take us there. That is doing nothing other than driving down confidence in business.
I do not want to take up too much time, but let me come on to one further important issue that was raised, which is in the general sphere of education. That is the importance of the post-study work visa. I would add to that the tier 1 entrepreneur visa. We need to encourage people from overseas to come to this country to help us drive up business investment and innovative ideas. I read an essay by a friend of mine, Professor David Simpson, a few weeks’ ago. He pointed out that one third of successful business start-ups in California between 1980 and 2000 were by people who had come from either India or China. At a time when we need, not least in Scotland, to attract the best minds to help to drive forward the economy, setting our face against that cannot be in anyone’s interest. It certainly cannot be in the interest of anything we might call an industrial strategy.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
It is a real pleasure to speak for the Opposition in this debate and to follow so many interesting, provocative and informative contributions. I have not agreed with all of them—or at least all of all of them—but I have been pleased to listen to them. I congratulate the Backbench Business Committee on bringing forward the debate.
I want to single out some contributions, however difficult that is among so many. The opening contribution was from the hon. Member for Warwick and Leamington (Chris White), who spoke eloquently and compellingly about the importance of having an industrial strategy. I mention, too, the contributions of my hon. Friend the Member for Hove (Peter Kyle), the hon. Member for Havant (Mr Mak), who sponsored the recent debate on the fourth industrial revolution, and my hon. Friend the Member for Hartlepool (Mr Wright), who chairs the Business, Energy and Industrial Strategy Committee.
It crucial for this House to show the nation and the world that industry is what we are about. I am grateful for the contribution of the Minister for Universities, Science, Research and Innovation in setting out the beginnings of a timetable for an industrial strategy, but it would have been nice to hear something concrete on the subject from the Under-Secretary of State for Business, Energy and Industrial Strategy, the hon. Member for Hereford and South Herefordshire (Jesse Norman), and I look forward to doing so.
As the contributions from Members of all parties have shown, industrial strategy is an issue that this House takes very seriously. Labour Members have made it absolutely clear that we recognise the hugely positive contribution that industry makes. Industry—and the businesses and workers that form it—drives our nation’s economic success and positive outcomes for our constituents. We can build an economy and society that we want—one that reflects our values as a nation and what we want for the next generation. That, I would say, is the purpose of an industrial strategy. Labour calls for an industrial strategy that is based on our values. That means the principles we hold dear—equality, democracy, empowerment, the value of labour, and economic liberation guiding the direction of a growing economy.
We need an industrial strategy that is geared towards stable jobs, tackling the great challenges of our time such as climate change and narrowing the gap between the haves and the have-nots. Working from first principles, we can put together mission goals for a new economy and develop the industrial strategy that delivers them. From building a green future to closing the gender pay gap; from balancing the economy beyond the financial services to tackling youth unemployment, industrial strategy can contribute to addressing those great challenges.
A strategy is necessary. The market alone has not provided the answers. We have not let it. Without an industrial strategy, the market has not been allowed to deliver the economy that we want. It has given no respite for those who have seen their communities starved through austerity, for young people who will never have well-paid jobs or own their own houses—or at least fear that they will not—or for those subject to draconian conditions in warehouses such as in Sports Direct.
We have seen an increase in precarious work, bogus self-employment, lower wages and higher costs of living. The market has failed all but a privileged few at the top of our society, which the Minister did not seem to recognise. But then the Tories have not had an industrial strategy since the 1950s. Their time in government over the past six years would be to be pitied if they had not actually ruined the lives of so many people.
Let me give just one example. Many of my constituents live in fear of the rise of the robots, which could result in fewer jobs. OECD research shows that 25% of workers could see the majority of their work automated in the next 10 years. I want this Government to be proactive and to use technology to help create more jobs for people across the country. Sadly, however, the Science and Technology Committee has condemned the Government for the complete absence of a strategy on digital.
In 2010, the Conservatives claimed that they would restore the balance between sectors of our economy, but manufacturing is still at the same level as in every year since 2007, accounting for 10% of economic output. In fact, the Conservatives have starved our communities with their austerity agenda. That agenda is now apparently forgotten, but my constituents merit an apology for what they have had to suffer in the name of austerity—and, unfortunately, that will be as nothing by comparison with the impact of the hard Brexit that we see the three Brexiteers attempting to implement.
We have seen the Conservatives’ lack of strategy for our industries in the disintegrating and fragmenting of our industrial support infrastructure. Innovation, for example, is now promoted by at least three separate bodies—Innovate UK, the research councils and NESTA—as well as the Catapult centres. The Government have starved regions outside London by abolishing regional development agencies and providing no replacement for them.
Each industrial age needs leadership from the Government. Harold Wilson said in his famous 1960s “white heat of technology” speech that innovation was driving us in a new direction, but we need leadership to embrace the changes and—this is very important—to ensure that that direction is for the benefit of us all, because growth has a direction. We have seen the third industrial revolution, but now we need leadership more than ever as the next waves of technological change break over us.
We would welcome the Government’s late coming to an understanding of the importance of industrial strategy, but unfortunately—as was pointed out earlier by my hon. Friend the Member for Norwich South (Clive Lewis)—the Tories have shown time and again that, although they can talk the talk, they cannot walk the walk. Since the Prime Minister took office, she has ignored the need for a digital industrial strategy. The Digital Economy Bill, which is currently in Committee, ignores the opportunities that the digital revolution could provide for businesses in Britain, and that has resulted in very real neglect. As we heard earlier, one of our tech success stories, ARM Holdings in Cambridge, was sold to Japanese investors with no reassurances about job security for the 3,000 people who worked there.
The Minister for Digital and Culture (Matt Hancock)
Just on a point of fact, assurances were given that the number of jobs would increase.
Chi Onwurah
I am glad that the Minister has attempted to make a contribution to supporting our industrial strategy, but we remember the assurances that were given in the case of, for example, Cadbury and Kraft. Assurances need to be concrete if we are to see the benefits, and we need to have the necessary powers.
Chi Onwurah
I am glad that the Minister has seen fit to intervene again. I look forward to those assurances being proven, and I look forward to his apology should that not be the case.
The Tories’ legacy for Britain’s industrial future will be one of apathy and incompetence. There is no vision for business, or how it could bring about a more just society. On energy, on automotive, on materials, on manufacturing, on food and drink, on agribusiness, on process industries, on biotech, on steel, on tech and on the creative industries, it is for us in the Labour party to provide the leadership on industrial strategy that the country needs so much.
Chris White
I am pleased to follow the shadow Minister. I was enjoying her speech, until it all seemed to go a bit wrong towards the end. Where I finished listening was where she said that she welcomed the Government’s initiative to have an industrial strategy. I am grateful to the Backbench Business Committee for providing time for the debate and to everyone who has had the opportunity to speak.
I take from the hon. Member for Aberdeen North (Kirsty Blackman) what she said at the beginning of her speech, which was that, basically, everyone had a different interpretation of what industrial strategy was all about. I do not think there is anything wrong with that. That is the purpose of this debate: to provide an opportunity for everyone in the Chamber who indicated a wish to speak to give their take on an industrial strategy.
I would go back one step further. I look forward to reading the book by the hon. Member for East Lothian (George Kerevan) when it finally comes out—I am sure that it will be selling round the corners. Until that time, I recommend anyone to read the book by Lawrence Freedman, “Strategy: a History”. It is important for us all to return to the definition of strategy. The shortest, most precise definition that I have come across is to get the furthest with the most. I do not think that is a bad foundation for this debate.
I would like to refer to my very good friend, my hon. Friend the Member for Bedford (Richard Fuller). I am sure that the House would agree that he was enjoying his speech far too much. He put a spanner in the works of otherwise consensual and positive debate with his desire to hold to the philosophy of a free-for-all—everything is for the best in the best possible world. I hope that he will come around to welcoming the pragmatic opportunities provided by the initiative that, through the Minister, is being formed. Discussion papers are being written. We are again going to be able to have our say, I hope. This matter will come back to the House for further debate. None the less, I imagine that all Members would agree that it is better to have this debate now.
Kelvin Hopkins
I much enjoyed the hon. Gentleman’s speech and agree with what he is saying, but the point that has not been answered is my point: low wages and flooding the market with cheap labour does not help investment. It keeps productivity at low levels. If we are going to see high investment in modern technology, we need to raise wages and stop flooding the market with cheap labour.
Chris White
I thank the hon. Gentleman for that intervention, but I suggest that a proper and full industrial strategy that looks at issues such as productivity would take those issues into account.
I thank all hon. Members on both sides of the House for their contributions, and I express my appreciation to the Chair of the Business, Energy and Industrial Strategy Committee for the work that it is doing on the issue.
Question put and agreed to.
Resolved,
That this House has considered industrial strategy.
Intelligence and Security Committee
Ordered,
That Richard Benyon and Mr David Hanson be appointed to the Intelligence and Security Committee of Parliament under section 1 of the Justice and Security Act 2013 in place of Sir Alan Duncan who ceased in accordance with paragraph 1(2)(b) of Schedule 1 to that Act to be a member of the Committee when he became a Minister of the Crown and Mr George Howarth who has resigned as a member of the Committee in accordance with paragraph 1(3)(a) of Schedule 1 to that Act.—(Michael Ellis.)
Heathrow (Southern Rail Link)
(7 years, 6 months ago)
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Seema Malhotra (Feltham and Heston) (Lab/Co-op)
I am grateful for the opportunity to address this topic, which is of enormous importance to my constituents in Feltham and Heston, to London and to the entire south of England.
Providing southern rail access is a welcome proposal to connect areas that lie to the south of Heathrow to the airport by rail. However this is not just about getting people to their plane on time; the right scheme has the potential to transform public transport provision and regenerate areas with some of the highest levels of deprivation not just in London but in the country. In the nearby wards in my constituency where this development would take place—Bedfont, Hanworth, Feltham North, Feltham West—over 30% of children live in poverty.
To me it is scandalous that the world’s busiest airport is not connected to south London and the whole of the south for want of a few kilometres of track linking Heathrow to Waterloo, intermediate stations in Hounslow and the whole of the south-east and south-west.
Ruth Cadbury (Brentford and Isleworth) (Lab)
I congratulate my hon. Friend on securing this debate. My constituency as well as hers would benefit from the proposal, particularly those living in Chiswick, Brentford, Isleworth and Hounslow. It takes roughly an hour to get from this place to Heathrow airport, by various different routes. One of the slightly longer ones is via Waterloo station, Feltham and by bus, but with my hon. Friend’s proposal of southern rail access, one could get from here, via Waterloo to Heathrow in less than 45 minutes.
Seema Malhotra
My hon. Friend is right. I will talk about the proposed Hounslow link from Feltham via a new station in Bedfont. That could see journey times directly from Waterloo to Heathrow of about 40 to 45 minutes depending on which route is chosen, and possibly going through my hon. Friend’s constituency.
Various options for addressing this missing link have been proposed over the years, such as the airport-led Airtrack scheme, which was dropped in 2010. None has yet proved technically or politically deliverable. In 2011 Network Rail again identified that connections to the west and south of Heathrow were a strategic gap in the rail network. The Airports Commission recommended in December 2013 that the Department for Transport instruct Network Rail to conduct a feasibility study as part of its short and medium-term measures, to improve airport accessibility irrespective of airport expansion.
In 2015 Network Rail completed its early feasibility study. I wholeheartedly support its strategic objectives, which are as follows: to reduce highway congestion at and around Heathrow through an increase in rail mode share and reduced environmental impact of existing travel patterns; to improve productivity and outputs from the UK economy through enhanced local connectivity; to reduce deprivation and increase labour productivity through greater access to employment at Heathrow and surrounding areas; and to connect communities where no reasonable public transport option currently exists.
Following a market study, Network Rail identified four indicative options through which it concluded it was feasible to deliver the necessary infrastructure and service patterns. The estimated benefit-cost ratio of this project is extremely high at around 16.4:1, representing exceptional value for money. That is pretty much unheard of among rail schemes. For comparison, HS2 and Crossrail 2 both have benefit-to-cost ratios of around 2:0. However, the work that Hounslow Council has been undertaking into a possible link from Feltham to Heathrow, which could also unlock huge regeneration, was not considered.
Today, I wish to present the arguments for the suggested option in Hounslow Council’s work and seek the Minister’s support in getting the Hounslow option on to an equal footing with other indicative options. Following this, I believe that the whole project should be considered a priority by the Department for Transport for full funding to allow it to progress to a full GRIP—Guide to Rail Investment Process—1-2 assessment. If that were achieved, we might have a stronger chance of attracting private finance to help to move the project forward.
Let me outline Hounslow’s proposal. Last year, Hounslow Council commissioned its own study from the respected transport consultant WSP-PB to review the possibility of a new rail alignment between Heathrow terminal 5 and the south-western main line immediately to the west of Feltham station. This would include a new station at Bedfont, in the vicinity of the successful Bedfont Lakes business park and near to the Clockhouse roundabout on the A30. Hounslow’s proposal tries to ensure that this nationally important infrastructure does not just deliver passengers to Heathrow. The inclusion of a new station in the Bedfont area, which would be placed on a new spur railway line running from Feltham to Heathrow airport, would allow for direct services to Heathrow from London Waterloo.
The new station and the associated bus routes that would be developed to serve it would enhance the public transport accessibility level of the site from level 1—very poor—to about level 4, which would be good. In practice, this would mean a significantly enhanced public transport service, benefiting those who live and work in the area as well as opening up the potential for sustainable development and much-needed housing. Through work completed at its own cost, Hounslow Council has estimated the benefit-to-cost ratio of a station in the Bedfont area to be between 2.78:1 and 5:1. Again, this represents very high value for money.
The benefits to the community would be enormous. Around 50% of people in my constituency have jobs directly or indirectly connected to Heathrow. A recent local plan master-planning exercise undertaken by Hounslow Council identified the potential to create a whole new front door to the airport, which would be unlocked by this new rail alignment and station. This vision is finally starting to put meat on the bones of what the Heathrow opportunity area, as set out in the London plan, might look like.
It is clear that any significant growth in this area would require new transport infrastructure to be both viable and deliverable. The Government therefore have a golden opportunity to deliver a step change to Heathrow’s accessibility from the south, and to help to unlock the potential for up to 13,000 new jobs and more than 7,000 new homes on London’s borders. The Minister will also be aware of the need to curb emissions around the airport in order to combat climate change and improve air quality. The newly elected Mayor of London, Sadiq Khan, has championed the need to improve air quality, even during his first few months in office. Heathrow’s submission to the Airports Commission argued that this proposal would also reduce road journeys to the airport by 3%, improving air quality and reducing congestion.
I am therefore pleased that Hounslow Council has this year commissioned Network Rail to review the WSP-PB report, advise the council on its feasibility, run the proposal through its models and highlight the infrastructure and environmental risks as it sees them. It is a shame, however, that we are having to play catch-up. When Network Rail undertook its research, local stakeholders were deliberately not engaged in relation to the options being considered. Indeed, it was not until after the project’s completion that Hounslow Council was informed that its proposal was not being included and would need to be considered separately.
I understand that the consultation being undertaken by Network Rail at the time was curtailed by the Department for Transport due to concerns about the potential impact on the Davies commission process. The reasons were never clear, but my view is that more could have been done, even within the constraints of the Davies commission, to include the local voice. I am therefore concerned that the process did not make the best use of public money. The report did not achieve as much as it could have done had it engaged with local leaders in a more collaborative manner, which they would have been willing to do. As a result, Hounslow Council is paying Network Rail £51,000 from limited reserves to peer review the Hounslow proposal and test it to the same level as the other indicative options proposed. While I acknowledge and appreciate the more constructive working in recent months with the DFT and Network Rail, that financial commitment is testament to the seriousness with which Hounslow Council takes this proposal. The council wants urgently to ensure that the alignment is taken forward as an option on a par with other proposed options for southern rail access into the next stage of feasibility, where it could be considered and potentially combined with other options when further work is commissioned.
As mentioned before, Network Rail has estimated the benefit-cost ratio of southern rail access to be in the order of 16.4:1, but it is worth noting that some changes have recently been proposed to how the DFT is looking to appraise such projects. The changes will place greater importance on the wider economic benefits of such schemes, in particular their role in unlocking new jobs and homes. Given that and the wider benefits of Hounslow’s proposal, that benefit-cost ratio is likely to be even higher than estimated.
In conclusion, improved rail access to the airport from the south is a pressing need regardless of whether Heathrow expands. The southern rail access to Heathrow project, with more direct and quicker links to Waterloo and the south, will make a huge difference for my constituency, for the constituency of my hon. Friend the Member for Brentford and Isleworth (Ruth Cadbury), for London and for the country. Hounslow’s proposal would meet the DFT’s strategic objectives for southern rail access by reducing congestion, improving the environment, increasing connectivity to the airport, and enabling much-needed regeneration of the local area.
I will therefore be grateful if the Minister answers the following. What steps need to be taken for the proposal to be formally included in the industry advice to be issued in 2017? What progress needs to be made for the indicative options for the southern rail access scheme to go forward into the next funding rounds for control period 6—2019 to 2024—if not before? What would the funding options be? What strategic role would the Government play in moving the project forward to the next stage of feasibility, after which securing private development funding may be a more likely option? I am grateful to have had the opportunity to speak on this topic today.
The Parliamentary Under-Secretary of State for Transport (Paul Maynard)
I congratulate the hon. Member for Feltham and Heston (Seema Malhotra) on securing this debate on a matter that is of great importance to her constituents. She touched on the subject of surface connectivity to our airports, which is an issue of national importance, and on how public transport can address inequality across the nation and in her constituency.
The hon. Lady’s points raise some eternal truths of both transport and urban policy. Cities with good airport rail links are more productive than those without. The shorter the access time to the airport, the more productive that city is.
Anyone who is here today hoping to discover our decision on airport capacity can move along because there will be no clues—I am no wiser than Opposition Members. Whatever the decision, however, this subject is always at the forefront of my mind because it will ensure the continued growth of our nation as a whole.
It is also clear that there has been a long-suppressed need for improved access to Heathrow from its south. Many passengers still access the airport by road, and uncompetitive rail journey times do not help with that. I used to traverse the hon. Lady’s constituency on many occasions on the 285 bus trying to get to Heathrow, and I took a very circuitous route around the airport perimeter and sundry car parks—it took an awful long time. That does little to encourage a modal shift off the road and on to rail, and it certainly does not do much to improve air quality in her constituency, to which she rightly drew attention.
The feasibility study that Network Rail carried out has to be a key part of how we consider improving southern access to Heathrow, and it is worth just thinking how access to Heathrow has changed over the decades. Just 25 years or so ago, only 20% of Heathrow’s passengers used public transport to get to the airport. The Heathrow Express opened in 1998, following on from the start of the Piccadilly line trains running there in 1977, and so by 2015, more than 40% of passengers were reaching Heathrow by public transport. That is a great step forward, but those people are still not coming from the south of the airport, which is a point the hon. Lady is trying to make.
Such statistics fuel our aspirations to do better and to have a better connected United Kingdom. I recognise that we can and need to do far more. The Government have come to power with a strong infrastructure mandate, particularly regarding rail, where customer numbers have doubled and freight has grown by 75%. More people are travelling by rail than ever before. We are spending £40 billion between 2014 and 2019 to support a larger and more mobile population. The hon. Lady lives somewhere that is a key part of not only her local transport network, but an international transport network. We are under no illusions about what a huge challenge we face in upgrading a network that, in many cases, has not seen improvements since the era of steam engines in the 1950s. We are trying to fit our improvements into a relatively short timeframe, on a network that is used more intensively than ever before. That gives us limited scope for how we put into the network complicated enhancement projects that risk disrupting ongoing rail services for customers in the here and now. We have to bear that in mind, too.
It will not be long until Crossrail opens in full—in 2019—which will bring not just the heart of London’s financial district, but much of east London to within 60 minutes of Heathrow. That will dramatically improve passengers’ experience of train travel, with services carrying up to 72,000 passengers an hour through London during the peak periods. That improvement of surface access will be replicated to both Luton and Gatwick thanks to the Thameslink programme. We are going to be improving substantially surface access across the UK, which is one reason why London TravelWatch has identified southern rail access to Heathrow as a particular gap, which we still need to focus on. That is why Network Rail is developing its proposals on the western rail link into Heathrow, off the Great Western railway. Subject to a satisfactory business case, funding in the next control period and the agreement of acceptable terms with the Heathrow aviation industry, that will also open up new journey opportunities by providing four trains an hour between Reading and Heathrow airport.
Southern access to Heathrow is certainly at a less mature stage of project planning, but it is absolutely part of our considerations for the long-term strategic vision for the railway. As I said, the absence of adequate rail infrastructure in this part of London was a key finding in that London TravelWatch report, and we should not forget that. I am always conscious that when we talk about such infrastructure projects that we tend to focus on economic benefits to the nation as a whole. I certainly hear what the hon. Lady says about the regeneration of Bedfont, Feltham and other areas, and I do not doubt what she has to say for one moment. We have learned that good planning is vital and that before every decision we really have to ask how it will benefit customers. We need to show a clear link to user benefit. These things must be good value for money, affordable and deliverable, but they must also be the right solution. As a Minister, I want to start not by identifying what the output is in terms of a piece of infrastructure or kit, but by understanding properly what the problem is, and what the solutions to it are. After that comes the answer on infrastructure investment, and that was why we were very clear in asking Network Rail in its initial feasibility study to identify whether there was a potential market. That might seem self-evident—to me, it certainly is self-evident—but we need to understand the size of that market, the flows of that market and what success would look like in terms of meeting the needs of that market. Network Rail looked at a range of options, with which the hon. Lady is familiar, and found very clear, strong demand for routes from Richmond and further out into Woking and Surrey, as well as inland from Waterloo.
I heard some of the hon. Lady’s comments about the way in which Network Rail went about this, and she mentioned the “Guide to Rail Investment Process”. It is important to stress at this stage that, in that particular report, Network Rail was trying to define both the scale of demand and how that demand could be met with a series of indicative proposals. I do not think that, at this stage, there is any thought of excluding any one proposal, or even of recommending a particular proposal.
The hon. Lady mentioned the initial industry advice, which is yet to reach Government. Network Rail is part of the rail delivery group that is putting together this industry advice. I know that it has met her and that it is closely liaising with Hounslow Council. Her proposal is now on the industry’s radar, so I have no doubt that it will be under consideration as part of the initial industry advice. There will be a series of options and investment opportunities that Ministers will be able to consider. Once again, this is about defining the problem, the outputs that could solve that problem, and the varying benefits and disbenefits of a whole range of options. I recognise that the council’s presentation has its merits, and that it needs to be included and considered as part of that process. I am sure that the industry will be doing that. I look forward to hearing the initial industry advice before we take our decisions further.
To progress the scheme further, I recognise that additional funding for further development will need to be secured. That will allow Network Rail to develop possible infrastructure solutions and to understand the costs and outputs of the scheme so that funding decisions can be taken. The Wessex route study—the feasibility study—will be taken into account in the initial industry advice, as will the Hounslow scheme, to form a coherent and integrated funding strategy. Businesses such as Heathrow Express, Great Western Railway, MTR Crossrail and TfL are all playing a role in drafting the initial industry advice, but the work is being led by Network Rail, which is helping to form the funding decisions.
Mims Davies (Eastleigh) (Con)
The Minister makes some important points about the reach of southern rail. I am listening intently as Southampton airport is in my constituency. I understand the importance of the Wessex route study and connectivity to Gatwick and Heathrow. In the work that we are doing around new franchises, I would like to see us being really bold about opportunities for Network Rail.
Paul Maynard
I thank my hon. Friend for that comment. As a former resident of the royal borough of Richmond upon Thames, I am always conscious that, for many of the residents there, Southampton was often an easier airport to reach than Heathrow, and the journey was actually better value and more convenient. Given the physical gap between the two places, that says a lot about the absence of rail connectivity to Heathrow. I hear what she says in light of the re-franchising that will be occurring.
I am delighted that Hounslow Council has taken the initiative to develop its own proposals and engineering solution. I know that Network Rail has met the hon. Member for Feltham and Heston and the council to take this matter forward, providing more expertise to highlight some of the key risks and issues that will need to be considered, as well as evaluating both journey time and train planning proposals. Any proposals to add trains to a network always involve complicated timetabling challenges that certainly elude my limited brain power in working out what fits where. We should always check whether we can fit things on the network before we start to over-promise what we cannot deliver. None the less, I welcome the work that is going on.
In the event that we can secure additional funding to take this forward to GRIP 1-2, we must consider it alongside other engineering schemes such as—but not limited to—those proposals that are also in the Network Rail feasibility study. We must derive maximum benefit from each and every investment decision that we make. We also have to take stock of what we are doing now to lay the groundwork for future investment. I am sure that the hon. Lady is aware of the work that is about to start at London Waterloo to vastly expand its capacity there, along with longer platforms for longer trains at a number of stations on the Reading line.
Work is not yet due to begin at Feltham, I know, but we are working through the complicated issue of a level crossing there. There will be 30 brand-new trains providing 150 extra carriages, and more Crossrail to come, as I said earlier.
There is a lot of good news in the hon. Lady’s constituency regarding rail investment, but I recognise that there is a particular gap in our network around Heathrow, so I welcome her contribution today. I hope I have reassured her that her proposals are on the Government’s radar and certainly on Network Rail’s radar. I look forward to receiving the initial industry advice and I am sure that once we have wider decisions about south-east airport capacity, this debate will take shape and grow, so I thank the hon. Lady for her time today.
Question put and agreed to.
Civil Legal aid (Merits Criteria) (Amendment) Regulations 2016
(7 years, 6 months ago)
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Sir Oliver Heald (North East Hertfordshire) (Con)
I beg to move,
That the Committee has considered the draft Civil Legal Aid (Merits Criteria) (Amendment) Regulations 2016 (S.I. 2016, No. 781).
May I say what a pleasure it is to serve under your chairmanship, Mr Turner? I welcome the hon. Member for Neath (Christina Rees) to her new and also her former responsibilities. That is welcome, and I hope we can work together on this important area.
The statutory instrument amends the Civil Legal Aid (Merits Criteria) Regulations 2013, which I will refer to as the 2013 regulations and which broaden the availability of legal aid. The statutory instrument enables legal aid funding for certain cases where the prospects of succeeding are marginal—that is, below 50% but between 45% and 50%—or borderline, which means that it is not certain that the prospects can be quantified. In most instances, the case must be of overwhelming importance to the individual or of significant wider public interest.
The 2013 regulations set out the merits criteria to be applied by the director of legal aid casework at the Legal Aid Agency when deciding whether an applicant qualifies for civil legal aid under the Legal Aid, Sentencing and Punishment of Offenders Act 2012, commonly known as LASPO. The criteria provide the basis for deciding whether it is justified to provide or to continue to provide public funds in an individual case. In some cases, that includes an assessment of the prospects for success in a case, and that is what we are talking about with this statutory instrument.
In July 2015, there was a judicial review. The High Court declared certain aspects of the 2013 regulations to be unlawful—specifically the requirement for a case to have a 50% or higher chance of succeeding to receive legal aid funding for full representation. The Ministry of Justice introduced interim regulations to comply with the High Court judgment pending appeal. That enabled funding for certain cases with a prospect of success below 50%. In May 2016, the Court of Appeal overturned the High Court decision and held that the 2013 regulations as they were prior to that decision were lawful.
The Legal Aid Agency announced that in light of the Court of Appeal’s decision on the lawfulness of the 50% threshold, it would no longer provide funding for cases with less than a 50% chance of success. The Ministry of Justice agrees with the judgment of the Court of Appeal that it is a balanced and proportionate approach to the granting of legal aid and that it cannot be condemned in any way as being arbitrary.
However, where an assessment of the prospects of success applies, there have always been certain exceptions to the 50% threshold. It is for those reasons that my hon. Friend the Member for North West Cambridgeshire decided that the Government should look at providing some flexibility. The Government have decided to make legal aid funding available for cases where the prospects of success are borderline—that is, very hard to quantify—or less than 50%, but at least 45%, which we call marginal. For most cases where a prospect of success test applies, the exception for cases with borderline or marginal prospects is subject to the case being of overwhelming importance to the individual or of significant wider public interest. In other cases, such as domestic violence cases, the amendments made by the statutory instrument will mean that legal aid is available in borderline and marginal cases without having to meet the additional criteria. Legal aid will also be available where the substance of the case relates to a breach of convention rights under the European convention on human rights.
The Government consider public funding to be justified in cases with marginal or borderline prospects of success, even though that is not legally required. To that end, the Ministry of Justice has introduced the amendments made by the statutory instrument. It must be remembered that the regulations do not impose a uniform set of merits criteria. The criteria depend on the type of legal services and the type of case for which funding is sought. There are areas, such as legal help, Court of Protection cases and public law children cases, where prospects of success do not have to be shown.
We introduced the amendments using the urgency procedure provided for under LASPO because we thought it important to give clarity to legal aid providers and to introduce new exceptions to allow the funding for borderline and marginal cases. That was over the summer, so I think hon. Members will accept that that was a reasonable approach.
The regulations introduce small but important changes to the 2013 regulations. I am pleased that they were examined without comment by the Joint Committee on Statutory Instruments and the Secondary Legislation Scrutiny Committee, and I commend them to the Committee.
Christina Rees (Neath) (Lab/Co-op)
It is a pleasure to serve under your chairmanship, Mr Turner. I thank the Minister for his kind words and for his explanation of the statutory instrument. I confirm that we do not oppose it, but I should like to make some observations.
The Civil Legal Aid (Merits Criteria) Regulations 2013 for full representation were implemented in April of that year to give effect to the Legal Aid, Sentencing and Punishment of Offenders Act 2012. In April 2013, the Government consulted on further cuts to legal aid, in their consultation “Transforming Legal Aid”. When that consultation first proposed removing civil legal aid for borderline cases, there was widespread opposition. At the time, legal aid was granted for certain case types that were assessed as having borderline prospects of success. The consultation acknowledged that those were
“high priority cases, for example cases which concern holding the State to account, public interest cases, or cases concerning housing.”
The regulations themselves were later amended to make the merits test less restrictive, following the July 2015 High Court judgment in the case of IS v. Director of Legal Aid Casework, which, among other things, found:
“The rigidity of the merits test…is…not reasonable.”
That case was a challenge to the exceptional funding arrangements, and the judge’s findings on the merits test were made in that context. The decision was subsequently overruled in the Court of Appeal, and the July 2016 amendments essentially see the merits test revert to the original 2013 position. The High Court’s decision meant that more people would potentially qualify for legal assistance under the revised regulations, and many lawyers working in the affected areas of practice would have been content for that position to remain unaltered. At the time of the “Transforming Legal Aid” consultation, given the significance of the cases described, many questioned why the “borderline” category was to be abolished.
Determining the prospects of success of a case is not a scientific process; it is a subjective exercise. Lawyers can attest to many cases to which the “borderline” description was attached, but that when funded went on to lead to changes in the law. The Law Society’s consultation response at the time warned that
“it can be particularly difficult in public law cases and test cases where often the prospects of success can only be assessed as borderline due to the uncertainty in the law the case is intended to clarify.”
We respect the Court of Appeal’s decision, however, and to that extent the reinclusion of some borderline cases is welcome. Labour remains concerned that the reforms that became LASPO went too far in restricting the availability of civil legal aid. The Government have long said that they would conduct a review into the impact of the reforms and cuts to legal aid introduced by LASPO after three years. I should be grateful if the Minister did one very simple thing and told us when that review will be carried out. I thank him again for presenting the statutory instrument to the Committee, and I hope he will answer my question.
Sir Oliver Heald
I thank the hon. Lady for her remarks. We all agree that deciding where the borderline cases fall is not an easy exercise, but we have tried to go beyond the Court of Appeal judgment in order to give more flexibility. That is the right approach, and the regulations reflect that. In a sense we are at one on this: it will always be an area of difficulty.
It is true that it was said at the time that LASPO would be reviewed after three years and before five years had elapsed. I can confirm that that is what we intend; we have not yet announced the date of that review, and I am not tempted to do so today, but we do intend it and I hope that on that basis the Committee will support the regulations.
Question put and agreed to.
Draft Misuse of Drugs Act 1971 (Amendment) order 2016
(7 years, 6 months ago)
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The Parliamentary Under-Secretary of State for the Home Department (Sarah Newton)
I beg to move,
That the Committee has considered the draft Misuse of Drugs Act 1971 (Amendment) Order 2016.
It is a great pleasure to serve under your chairmanship, Mr Evans. The draft order was laid in Parliament on 20 July. The expert advice from the Advisory Council on the Misuse of Drugs has been key to this draft order, which was prompted by the council’s recommendations. The council’s advice relates to a third generation of synthetic cannabinoids, a group of new psychoactive substances commonly known as Spice; and to dienedione, an anabolic steroid used for performance enhancement.
The order will amend the generic definition of the synthetic cannabinoids in the Misuse of Drugs Act 1971 to include the new group as class B drugs, and will control dienedione as a class C drug. That will make it an offence to produce, import, export, supply or offer to supply the drugs without a Home Office licence. Similarly to other anabolic steroids, dienedione will be exempted from the Act’s possession offence to allow for its legitimate use on prescription.
As the Committee might expect, the cannabinoids in question are thought to pose similar harms to cannabis and other cannabinoids controlled under the 1971 Act. We have made specific exemptions in the order for cannabinoids used in medicinal products and some controlled drugs. There are no known legitimate or recognised uses of the remaining compounds, beyond potential research.
The ACMD advises that the potential physical and social harms of dienedione will be commensurate with those of other anabolic steroids, which, as Members will know, can alter growth and produce several effects on the reproductive system and sexual characteristics in men. The ACMD considers that the relevant substances are being or are likely to be misused, and that misuse is having, or at least capable of having, harmful effects sufficient to constitute a social problem. For those reasons, I have accepted the council’s advice that the substances should be subject to the order.
In due course, we will make two further related negative statutory instruments to come into force at the same time as the order, adding dienedione and the third-generation synthetic cannabinoids to the appropriate schedules in the Misuse of Drugs Regulations 2001, as well as designating the synthetic cannabinoids as substances for which there is no recognised legitimate use outside of research.
It is only through a balanced approach towards reducing demand, restricting supply and building recovery that the Government can address the harms associated with drug misuse. However, we do expect the order to have a notable impact on the availability of the relevant substances and to make it clear that their misuse poses an unacceptable risk to health if they are not placed under the controls of the 1971 Act. I commend the draft order to the Committee.
Lyn Brown (West Ham) (Lab)
It is a real pleasure to serve under your chairmanship, Mr Evans. It might be cold outside, but there is a little warmth inside this room.
As I understand it, and as the Minister explained really well, the draft order will bring a range of cannabinoids and one anabolic steroid under the control of the Misuse of Drugs Act 1971. Its contents are in accordance with recommendations from the Advisory Council on the Misuse of Drugs, and it has been made after careful evaluation of the harmful societal impact of the substances.
Article 4 of the order will bring the anabolic steroid known as dienedione under permanent control as a class C drug. As we have heard, professional athletes are currently prohibited from using dienedione, as it is banned by the World Anti-Doping Agency as a performance-enhancing drug. UK Anti-Doping has an arrangement with the Advisory Council on the Misuse of Drugs. The arrangement is sensible, because substances that are manufactured to aid elite sports performance can become popular among amateur sportsmen and women. Sometimes these performance-enhancing substances can carry really significant health risks. We are pleased that the ACMD undertook a review of dienedione at the request of the doping agency in 2015 and that the advisory council recommends controlling the substance as a class C drug because it is similar to other anabolic steroids, which have been found to have a number of really harmful effects, including cardiovascular difficulties and liver dysfunction.
The advisory council notes that anabolic steroids pose a particular risk to the young people. They state that the drugs
“potentially disrupt the normal pattern of growth and behavioural maturation.”
The ACMD points out that controlling the substance may help to reduce both demand and supply, minimising the risk of health harms, as the Minister stated. Given that carefully crafted and evidence-based recommendation from the advisory council, Her Majesty’s Opposition support the proposed controls on dienedione.
Article 3 of the order brings a range of third-generation synthetic cannabinoids under permanent control as class B substances. Synthetic cannabinoids are drugs that are designed to mimic the psychoactive effects of cannabis, as the Minister stated. Looking at past ACMD reports, there can be no doubt of the harm that these substances bring. Synthetic cannabinoids can produce severe adverse effects, including increased heart rate, panic attacks and convulsions. A number of users have visited A&E as a result of vomiting, hallucinations, and so on.
Early academic research suggests that users show evidence of acute withdrawal associated with cessation of long-term use of these products, suggesting dependence. The ACMD warns that there have been
“reports of psychosis and other psychiatric presentations associated with their use.”
The European Monitoring Centre for Drugs and Drug Addiction stated that
“their use has caused many serious poisonings and even deaths—sometimes these have manifested as outbreaks of mass poisonings.”
Given those harms, the Government have rightly moved to control synthetic cannabinoids substances in the past, as they did in both 2009 and 2012. However, the ACMD reported in November 2014 that since that action was taken, a third generation of synthetic cannabinoids, outside of the scope of controls, has entered the market and become widely available. In that report, a revised generic description of synthetic cannabinoids was put forward by the ACMD and accepted by Parliament under an order similar to this one.
This game of whack-a-mole, as I like to put it, has been going on between drug suppliers and the Government over synthetic cannabinoids, showing just why we needed legislation such as the Psychoactive Substances Act 2016, which introduced a ban on all substances that mimic the effects of controlled drugs. We hope that that Act, which came into force this year, will finally allow the Government to get one step ahead of the market and will significantly reduce the supply of these dangerous substances. May I also say, quite selfishly, that it might even the reduce the number of statutory instruments before Parliament?
This is the first order to place new psychoactive substances under the control of the Misuse of Drugs Act 1971 that Parliament has been asked to affirm since the Psychoactive Substances Act came into force. The Opposition were clear during the passage of the Psychoactive Substances Act that it should not be used as an excuse not to place dangerous substances under the stricter controls provided for by the Misuse of Drugs Act, so we are pleased to see the order. However, although we welcome the controls brought by the Psychoactive Substances Act and by the order, we have always been clear that legislation can be effective only if there is a wider strategy to reduce the demand for harmful substances. That is particularly true for synthetic cannabinoids, which, as Mentor points out, have become prevalent among vulnerable groups such as street homeless communities and prisoners. Hon. Members who served on the Psychoactive Substances Bill Committee—some are in this Committee Room today—will remember well our debates on that issue. Such vulnerable groups are usually less responsive to changes in the legal status of substances and in greater need of targeted intervention programmes.
During the passage of the Psychoactive Substances Act, the Government appeared to agree with us. They promised that the Act would be rolled out alongside a comprehensive drug awareness and education strategy. The previous Minister, the right hon. Member for Hemel Hempstead (Mike Penning), wrote to me—he wrote to me quite a lot, actually—and made that pledge:
“Going forward, we are developing a strategic communications plan to support the implementation of the Bill in April 2016. In developing our plans, we are recognising the value of raising public awareness of the harms of drug misuse”.
The Act came into force on 26 May; here we are, five months later, and the Government have still not released the promised education and awareness strategy. All that has been produced is the “Resource pack for informal educators and practitioners” on the Home Office website, which directs people to existing Government services such as “Talk to Frank”. I am not going to reiterate our debate about “Talk to Frank”, because that would take way too long and because my concerns have been outlined on numerous occasions, but we reached a conclusion across the Psychoactive Substances Bill Committee that the “Talk to Frank” service was frankly not doing what it needed to. I was expecting much more from the Government, and I know that drug charities were too. Perhaps the Government are planning to include a comprehensive education and awareness strategy for new psychoactive substances within their five-year reduction strategy, which was due to be published this summer but was not. Will the Minister explain why we have yet to see that strategy? Could she tell us when we will be able to see it, if the Government still intend to produce one?
I will push the Minister on one more point, which she did not cover in her speech. I am told that synthetic cannabinoids act on the same brain cell receptors as natural cannabis. People who suffer from multiple sclerosis and other such conditions may therefore be tempted to use such substances to alleviate their truly difficult and awful symptoms. I really have enormous sympathy for anyone suffering from multiple sclerosis who seeks the most effective pain relief available and who therefore seeks, in the absence of suitable prescribed products, to use substances available from local traders, shall we call them. Sufferers should not need to use illegal and unregulated substances that are in themselves harmful in order to have access to the medical benefits that are ascribed to cannabis.
Anne McLaughlin (Glasgow North East) (SNP)
The Scottish National party passed a resolution at its conference last weekend that called for exactly what the hon. Lady is talking about: the decriminalisation of cannabis for medicinal purposes. I understand that that resolution had the backing of the First Minister of Scotland. It is interesting to note the direction of travel there. Having said that, the Scottish Government have control over health, but not over this issue. The hon. Lady, and any other Member who wishes to do so, may feel free to back the devolution of those powers, so that the Scottish Government can make those decisions. I support what she says about decriminalisation for medicinal purposes.
Lyn Brown
I was not going that far. Let me be really clear. I am not going that far; I am starting to tremble. THC is the active ingredient in cannabis. It is used effectively in a drug called Sativex. Sativex is already licensed in the UK to relieve the symptoms of conditions such as MS. The Minister may be aware that Sativex is not available on the NHS in England, due to the cost of the drug, whereas in Wales, Sativex is available to sufferers on prescription.
Sufferers of conditions such as MS—and, I am told, pain from some cancers that cannot be controlled by drugs that the NHS currently uses—should not suffer greater pain and difficulty just because they live, on this occasion only, on the wrong side of the border. We certainly do not want to push sufferers into unregulated, synthetic and potentially dangerous cannabinoid usage. This is something that the Government could and should get a grip of.
So while it is ultimately a decision for NICE, will the Minister talk to her colleagues in the Department of Health and try to get NICE to look at this again? To conclude, the Opposition support the order before us. The Advisory Council on the Misuse of Drugs has made clear recommendations that these substances should be controlled after evaluating the evidence that they pose a societal risk. Legislation which controls substances will be successful only if it is part of an overall strategy to reduce demand for harmful substances.
The Government’s failure to provide a comprehensive education and awareness strategy alongside psychoactive substances and the delay in publishing their five-year strategy to reduce drug harm suggest that they are not taking this component of reducing drug harms seriously enough. Let us face it, the people who are caught up in use of these harmful and addictive substances will suffer most from the Government’s failure. It is very costly to pick up the pieces of blighted lives. Prevention, in this case as in most others, is much better than cure.
Jeremy Lefroy (Stafford) (Con)
Thank you, Mr Evans. It is an honour to serve under your chairmanship. I welcome the Minister to her position. I want to endorse the point that the hon. Member for West Ham has made about education. I think it is extremely important, and I have no doubt that the Minister will respond in some detail.
The only other point I wish to make is about treatment. Treatment is absolutely vital. In Staffordshire and Stoke-on-Trent we are facing some difficult choices on treatment in the coming months. I know that my hon. Friend the Member for Burton, who has the wonderful Burton addiction centre in his constituency is very concerned about this, as are we all. All our constituents in Stoke-on-Trent and Staffordshire benefit from that excellent facility.
What conversations has the Minister been having with her counterparts at the Department of Health on the matter of drug and alcohol treatment?
Sarah Newton
I would like to thank the hon. Member for West Ham and my hon. Friend the Member for Stafford for their interesting contributions. I welcome the hon Member for West Ham to her new position and look forward to working with her. She rightly says that this is an incredibly important area of policy. What could be more important for us as parliamentarians than keeping the communities we represent safe? I welcome the hon. Lady’s support. As she says, new psychoactive substances have already cost too many lives. The Psychoactive Substances Act is sending out a clear message: this Government will take whatever action is necessary to keep our families and communities safe. These drugs are not legal or safe and we will not allow them to be sold in this country. The hon. Lady is quite right that it is a game of cat and mouse and the Psychoactive Substances Act 2016 enabled us to get ahead of the game.
But where drugs continue to emerge, which are sufficiently harmful to warrant control under the Misuse of Drugs Act, the Government have a duty to impose that higher regime of control, both to support enforcement in restricting the supply of these substances and to send out the message that these drugs are too harmful to be in circulation.
Our approach to drugs must continue to be proportionate, informed by evidence of harm and ACMD advice, and characterised by a balanced response. The ACMD’s advice today is precisely that: it is proportionate and appropriate to control these emerging drugs under the Misuse of Drugs Act 1971. We are acting on that advice and will continue to do so.
I would like to reassure everyone that the Government understand that the response to drugs needs to be broader than restricting supply through legislation. I have made it my priority to take action to prevent the harms caused by drug misuse. I have first-hand experience of working with drug users and understand the complexities that they as individuals have to overcome in their recovery process, before we can begin to consider the wider harms and costs to our families, friends and communities. I fully recognise the scale of the challenge.
As a Minister I have already seen a range of excellent work across the country, including in Durham where the police are working with local partners and charities, including the Centre for Change, to tackle the supply, to empower people to resist drugs and to put in place highly effective programmes to help them recover from their dependence. That is why it is so important to have a balanced drugs strategy.
I can assure the Committee that the Government are committed to publishing a new cross-Government drugs strategy and will do so soon. That will include new action to prevent the onset of drug use and its escalation at all ages through universal action, combined with more targeted action for individual people.
That includes placing much greater emphasis on building resilience. This is where I would like to go into more detail to answer the questions about the educational tools and resources that are available. Since the introduction of the Psychoactive Substances Act we have developed a range of new and specific resources.
Yesterday I was at the national conference, sponsored by Mentor-ADEPIS, of all of those involved in our country. It pulled together all the best evidence and practice available to educators, teachers, parents and people working with young offenders, right across the spectrum. It is worth noting that ADEPIS has been praised by the United Nations as an example of best practice.
We really are leading the world in this area. One only needs to look at the data that clearly show the number of people across all age groups, particularly young people, who are no longer tempted to take drugs. We have seen really good evidence and data to show that fewer people are taking drugs and, indeed, alcohol.
Of course, we are not complacent. The number of deaths from people misusing drugs is too high. One person dying from taking drugs is one too many. Although I am not at all complacent, it is worth noting the success and achievement of those involved in drug education, prevention and rehabilitation services.
“Talk to Frank”, which came under some criticism from the hon. Member for West Ham, has been updated since the Psychoactive Substances Act. We do keep the databases and portals for the information and tools available regularly updated. We put evidence at the heart of everything that we do. It was interesting, when meeting the practitioners who are day in, day out on the front line of delivering this education in schools and a variety of settings, to hear the importance of using an evidence base.
Some things that we think, with very good intentions, will absolutely do the trick—for example, the short, sharp shock of ex-drug addicts or police officers going into schools—do not always work. Enabling young people to be more resilient, to focus on their health and wellbeing, and to make risk assessments and manage their own risky behaviours produce a far more sustainable and effective result.
I hope that by elaborating that, I have reassured the Committee that there is a lot of very good work going on.
Lyn Brown
The Minister has clearly supported our position on personal, social, health and economic education in her short statement. I am grateful to her for that. I say gently, and with a smile on my face, I will be pressing her on that in future. Will she tell me, however, when the Government will actually produce the strategy?
Finally, the Minister was kind enough to nod and smile at me when I was talking about Sativex. It would be great if she could tell us, on the record, that she will talk to her colleagues in the Department of Health and NICE about making it available to patients in England.
Sarah Newton
The hon. Lady anticipated my next point, which was to address the concerns that a number of honourable colleagues have expressed to me this morning. First, however, I will come back to her on PSHE. It is incredibly important that young people are provided extremely good education in schools, not only so that they can make the most of all the great opportunities of 21st-century Britain, but so that they understand the considerable risks that come along with that, especially online. Given my ministerial portfolio, I look at things such as the sexualisation of children and what more we can do to enable young people to have appropriate, respectful sexual relationships, and I am fully aware of the need for comprehensive, age-appropriate education for young people.
Craig Williams (Cardiff North) (Con)
I pay tribute to Mentor, which works in this area. As a Welsh MP, I am very aware, as I am sure the Minister is, of the devolution of education to three nations. Will she ensure that best practice in England and the other nations is shared, so that we may encourage cross-border working?
Sarah Newton
I am grateful to my hon. Friend for his intervention. He makes a good point. I am a passionate localist and think that communities working together often find the best solutions—better solutions than we find here in Westminster—but it is important to provide consistent, high-quality services and educational support by sharing best practice. I absolutely assure him that we will be doing that, and I will work with my colleagues in the Welsh Assembly, the Scottish Parliament and the Northern Ireland Assembly.
Coming on to issues relating to the decriminalisation of cannabis, I want to make it absolutely clear that the policy of the Government is not to decriminalise cannabis, which is clearly a very harmful—
Sarah Newton
I will answer the question. Cannabis is clearly a very harmful substance, and there is no evidence at all to support its decriminalisation. Moreover, we already have a very good regime that allows classified drugs to be used in scientific research and the development of medicinal substances—not only cannabis. I assure hon. Members that I have met with my colleagues over in the Department of Health, and that my officials have been in touch with officials there to re-examine the existing regime to ensure that it is not preventing scientific research, or stopping pharmaceutical companies from asking for licences to use cannabis.
We have talked about one particular medicine today, but a whole range of research is in fact funded by the Department of Health, such as research into the use of cannabis in the treatment of not only cancer but Parkinson’s disease. I have assured myself, through working with my colleagues, that the existing regime is fit for purpose and is producing beneficial effects. If at any stage scientists, researchers or medical researchers come to me with evidence that our regime is standing in the way of the positive use of listed substances that might have medicinal or positive effects, of course I will examine that evidence.
Lyn Brown
The Minister is being very generous in giving way and, I have to say, remarkably wonderful this morning, but may I press her on Sativex? She is right that our scientists have produced good, beneficial medicines from cannabis, THC and so on, but we need them to be available. It is no good them being available only to people in Wales, but not to people in England as well. I know that this is not part of her portfolio, but it would be great to have an ally pushing at the Department of Health and NICE to get those benefits available to all people in the United Kingdom.
Sarah Newton
I will also take the intervention of the hon. Member for Glasgow North East.
Anne McLaughlin
For the record, the Minister stated that the British Government had no intention of decriminalising cannabis, but neither I nor the Scottish National party was calling for that. The resolution that we passed specifically concerned medicinal purposes. I wanted to put that on the record again, in case there was any misunderstanding.
The Chair
Before I call the Minister, I point out that I will not allow a general debate on decriminalisation.
Sarah Newton
I appreciate the hon. Lady’s clarification, because I am sure we can all agree that it is not right to decriminalise the use of cannabis in the way described, because we would have no control. Does she really think that it would be okay for people to get seeds to plant at home, even though they know nothing about the percentage of harmful effects in the resulting plants, and for that to be totally unregulated? People would be able to imbibe incredibly harmful and damaging substances. What we are doing is far better—scientists coming forward for a licence as necessary, as proven with drugs that have already been licensed, so we know that we can use cannabis in a properly controlled and experimental way, with the drugs then being made available.
I have absolute sympathy with people who have MS and other chronic and degenerative diseases—all of us who have constituents in that situation do. They are suffering terribly, but we want to ensure that they have safe medication and that they are looked after by doctors. I do not want to encourage DIY medicine, which could have potentially devastating and harmful effects.
I have raised Sativex with my colleagues. With that drug and so many others found by NICE not to be cost-effective on the NHS—there are other cancer treatments—the Department of Health is always in dialogue with NICE and with the pharmaceutical industry to bear down on the cost of such drugs, so that they become cost-effective and more people in Britain can benefit from them. I hope that that has answered the questions asked of me this morning.
I also want to pick up on what my hon. Friend the Member for Stafford said about recovery and how important it is. Of course prevention has to be better than a cure, and of course it is right that we focus on restricting supply of drugs and on encouraging young people and people of all ages not to take the drugs in the first place, because we know that the road to recovery can be difficult and that not everyone can reach that recovery. Tragically, too many people are still losing their lives. I have seen a lot of good partnership work all over the country and, when we publish our strategy, I hope that my hon. Friend will see that, right at the heart of it, there is really good progress on how we will take forward recovery, building on good existing examples of partnership working from around the country. Our strategy will be out soon.
We have had a good debate and, Mr Evans, you have helpfully kept us on track. I hope that the case I have made this morning will help people to understand that legislative action is important, but that it is only one part of the Government’s comprehensive approach to prevent people from taking drugs. Legislative action is, none the less, crucial, and I hope that the Committee agrees that I have made the case to protect the public by controlling those harmful drugs on the basis of the vital evidence provided by the ACMD. I recommend the draft order to the Committee.
Question put and agreed to.
Resolved,
That the Committee has considered the draft Misuse of Drugs Act 1971 (Amendment) Order 2016.
Petition
Implementation of the 1995 and 2011 Pension Act
Digital Economy Bill (Fifth sitting)
Thursday 20th October 2016
(7 years, 6 months ago)
Public Bill CommitteesRead Full debate Digital Economy Act 2017 View all Digital Economy Act 2017 Debates Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 20 October 2016 - (20 Oct 2016)
The Committee divided: - Ayes: 7 / Noes: 10 - Question accordingly negatived.
The Chair
The Minister has asked for and been granted the Chair’s permission to take his jacket off. If other right hon. or hon. Members also wish to take their jackets off, they have permission to do so.
The Minister for Digital and Culture (Matt Hancock)
I beg to move,
That the Order of the Committee of 11 October be amended as follows—
(1) In paragraph (1), after sub-paragraph (f) insert—
“(g) at 9.25 am on Tuesday 1 November;”.
(2) In paragraph (4), for “5.00 pm on Thursday 27 October” substitute “11.25 am on Tuesday 1 November”.
On Tuesday night, the House approved a motion to extend the Committee. This amendment will provide the additional time required thoroughly to scrutinise the Bill.
Louise Haigh (Sheffield, Heeley) (Lab)
I thank the Government for replacing the sitting that we lost on Tuesday because of the debate that they scheduled on the BBC motion. We do not oppose this amendment, but the Government have tabled more than 130 amendments to the Bill since we agreed the programme motion, in good faith, on the basis that the Bill has 84 clauses. It is now clear that the Bill was not ready to come to Committee.
Not only have the Government tabled more than 130 amendments but they have made significant announcements about who the regulator will be. We welcome the significant publication of the codes of practice that will accompany part 5, but we should have had them earlier in the process. It is the job of Her Majesty’s loyal Opposition to scrutinise the Bill and table amendments, and we will not accept any criticism if the Committee does not get through the whole Bill. The Government should be prepared to add time if we do not make that progress.
Matt Hancock
We have been very accommodating on the timings. Not only did we remove the Tuesday afternoon sitting at the request of the Labour party, but we added another sitting at the end. We cancelled the sitting last Thursday afternoon at the request of the Labour party, despite the fact that we wanted it to happen. In fact, the amount of scrutiny in Committee will be less than we originally proposed, at the request of the Labour party. We will not have any truck with that one.
Kevin Brennan (Cardiff West) (Lab)
How many amendments has the Minister tabled?
Matt Hancock
Amendments have been tabled by Members on both sides of the Committee. The argument that we should not table amendments in Committee is an argument for having Bills come out of the parliamentary process in exactly the same form as they go in. Even the Government would not make that case. The central point here is that we offered plenty of time, which was agreed on a cross-party basis, and the Labour party has asked to reduce that time. In considering whether there has been enough time in Committee, those who read the transcript in the weeks and months to come ought to recognise that the Government have been as accommodating as possible, but that we had to give way to the Labour party’s request for less time and scrutiny in Committee.
Claire Perry (Devizes) (Con)
We have a Minister who is engaging with the nuts and bolts of a Bill that was prepared long before he came to office. I, for one, am delighted that we have an active Minister who is determined to make this exceptionally important Bill as good as it can be. I do not accept this criticism. It is excellent that the Government are tabling these amendments and allowing time to consider them.
Kevin Brennan
I note that the Minister has not answered my question, and I am not sure that he even knows how many amendments he has tabled. Of course it is appropriate to table amendments, but it is not appropriate to introduce a Bill that is so unready that the Government have already tabled more than 130 amendments. That is not good practice, and he knows very well that it is not; I do not know why he is contesting that fact. We want to proceed with the business, but we put our point on the record. I hope that he and his officials take note.
Matt Hancock
People reading the transcript will notice that we have eaten up another five minutes discussing the process.
Matt Hancock
No. I want to get on to the scrutiny of the Bill, but I will take on board the Labour party’s point that it does not think amendments are a good idea. I think the whole point of the parliamentary process is to make amendments. With that, I hope that we can get on with the Bill.
Kevin Brennan
On a point of order, Mr Stringer. If the Minister thinks that that is the attitude he should adopt in Committee to the Opposition when they are making a legitimate point about how ready the Bill can be for scrutiny if he has to introduce more than 130 amendments, he has got a lot to learn about how this place works. I put it clearly on the record that we think it is vital that amendments to a Bill are discussed, but the purpose of Committee is mainly is to ensure that the Opposition have that opportunity.
The Chair
I have given the hon. Gentleman some latitude, but that was not a point of order or a matter for the Chair. May I remind right hon. and hon. Members that interventions should be brief and to the point?
Question put and agreed to.
Clause 3
Automatic compensation for failure to meet performance standards
Amendment proposed (18 October): 60, in clause 3, page 2, line 35, at end insert—
“(db) require a communications provider to allow an end-user to terminate a contract on repeatedly failing to meet a specific standard or obligation;”—(Calum Kerr.)
Question again proposed, That the amendment be made.
The Chair
I remind the Committee that with this we are discussing the following:
Amendment 84, in clause 3, page 2, line 35, after “obligation”, add “within reasonable timescales” insert”.
New clause 2—Ability of end-user to cancel telephone contract in event of lack of signal at residence—
‘A telecommunications service provider must allow an end-user to cancel a contract relating to a hand-held mobile telephone if, at any point during the contract term, the mobile telephones is consistently unable to obtain a signal when located at the end-user’s main residence.’
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
I will not repeat the comments I made previously, but I want to focus again on new clause 2. I was explaining that consumers often face an impossible position. I gave an example from my constituency of something that happens around the UK. Indeed, uSwitch produced a report this morning that shows that across the UK nearly a third of consumers have either patchy or no signal inside their home, which is a real deficit in the product that they thought they were buying. Some of that will be down to there being no reasonable coverage in the area, and some of it will be down to other factors, but it is often down to a failure of the telecoms company that provides the service.
I will repeat the example that I gave from my constituency, because I think it is important. In Fort Augustus, my constituents had to do without their mobile telephones between January and May 2015, even though they had contracts, because the operator could not fix a problem. They were told that the only way to deal with that was to pay £200 to cancel the contract. That is flatly unacceptable. I have listened carefully to what has been said this morning; the Government stated clearly that they want to make the Bill as good as it can be, so let us make sure that we put in the new clause.
I first raised this issue with the UK Government in July 2015, and I was told at that time that there was merit in what I was saying. Ofcom accepted that, and said that it, too, felt that something should be done. The Minister’s predecessor, the right hon. Member for Wantage (Mr Vaizey), said in November 2015:
“We have a number of principles when we look at this market. One is that consumers should not be trapped in contracts in which they are not getting the coverage they expected to get. Ofcom is discussing with mobile providers the possibility of their offering redress, which would include allowing customers to leave a contract when service was unacceptable.”—[Official Report, 24 November 2015; Vol. 602, c. 1335.]
Let us please ensure that we do something about that, and put the new clause into the Bill.
Matt Hancock
The clause is all about making it easier for customers to claim compensation for service failures. This is all part of the fact that broadband is now a utility rather than a “nice to have”. Amendment 60 seeks to make it explicit that Ofcom can set general conditions to require communication providers to allow an end user to terminate a contract when a service repeatedly fails. New clause 2, which we have just been talking about, would specify that consumers can terminate a contract if mobile coverage is substandard at the main residence. There are already a number of options available to consumers who wish to cancel a contract due to poor coverage or connection, and we do not think that those additional options are necessary.
Before purchasing a contract, consumers can use Ofcom’s coverage checker, and if a contract is purchased online or over the phone, and the consumer finds that the coverage is a problem, they can cancel during the statutory cooling-off period—the first 14 days. Some companies offer extended periods, such as a 30-day network guarantee, during which customers can test the coverage and, should they be dissatisfied, cancel without penalty. Customers are entitled to leave a contract if they are mis-sold a service—if they are advised that they would get coverage in a certain location, but subsequently discover that they cannot.
Drew Hendry
I am listening carefully to the Minister. Those protections are important, and if somebody is mis-sold a product at the point of sale, a cooling-off period is valuable. However, the Minister is not addressing situations such as that in the Fort Augustus example that I gave. The people who got that contract were not able to get the service after the cooling-off period. That is happening across the UK.
Matt Hancock
It is reasonable that the period in which people can cancel be limited, because companies have to know, once they have entered into a contract, that it is valid. I think that the way that is done currently, through cooling-off periods, is appropriate. There is also a broadband speed code of practice, which is about the speed that people get. As of the end of September, seven providers have implemented the business broadband speeds code of practice, which allows business customers to exit a contract without penalty if download speeds are not at the guaranteed minimum.
Drew Hendry
I hear very clearly what the Minister says, but this is about people who have bought into mobile contracts and are not able to get coverage. Does the Minister think it is acceptable that somebody who is without a service for four months has to pay £200 to cancel their contract?
Matt Hancock
No, I do not, but I do think it is useful for the period in which contracts can be cancelled to be limited. The law currently provides for that.
Amendment 84 seeks to define the parameters of any general condition that Ofcom sets regarding compensation to customers. It is our intention that providers should offer prompt and proportionate compensation when their services do not meet agreed standards. It is right that any decision by Ofcom to set general conditions needs to be based on evidence drawn from its consultation process and applied proportionately. In June, Ofcom issued a call for input on the aim and scope of the automatic compensation scheme, and it will consult on the introduction of the regime in early 2017. We support Ofcom in that approach. I think that the way the clause is drafted is the right way to drive the policy, but until we have the benefit of Ofcom’s consultation, it would be wrong to constrain the parameters of a general compensation condition.
With that explanation, and given my point that there is already a time-limited period in which contracts can be cancelled, I hope that hon. Members will withdraw their amendments.
Calum Kerr (Berwickshire, Roxburgh and Selkirk) (SNP)
I am disappointed but not surprised that the Minister will not consider the change. There seems to be an unwillingness to amend the Bill other than by adopting one of the hundreds of Government amendments. I hoped that we might enter into a more constructive spirit.
We agree that the clause itself is a good move. As I said in my opening remarks, there is an opportunity to go to a high level of granularity—I contrasted the black-and-white, binary nature of telephony to the complex world of broadband—and I would like the Minister to assure us that the devolved Administrations will play a key role in that. Scotland is a disproportionately rural environment, and we must ensure that the rural voice is heard, although these issues are not unique to Scotland, or to my constituency, or that of my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey. This must go to a granular level and incentivise good performance, rather than provide compensation, as is currently set out in the Bill. All that our constituents want is a good level of service, rather than some money back for poor service.
Matt Hancock
I hope I can give assurances that might prevent the hon. Gentleman from pressing his amendment to a vote.
Ofcom’s consultations will of course include the Scottish Government, as well as rural areas of the rest of the United Kingdom. My explanation for not wanting to legislate through the Bill for redresses already provided for in law is that it is generally good practice for a particular redress to be covered in law just once. We might otherwise end up with a problem of overlap, which can make it harder to claim redress. That is why I have set out where I think redress is already available. Although of course we want to ensure that people who cannot get coverage or do not get good enough broadband speeds through the contract that they have signed up to have the opportunity to come out of that contract, we should not double legislate.
Question put, That the amendment be made.
Matt Hancock
Clause 3 will make it easier for customers to claim compensation for service failures and, we hope, help improve customer satisfaction and drive the sector to deliver on its service commitments. The clause is about providing not only compensation but incentives that we hope will make such compensation unnecessary. The clause makes explicit Ofcom’s power to set general conditions on communications providers, requiring them to adhere to automatic compensation regimes as defined by Ofcom. It is part of Ofcom’s remit to protect the interests of end-users.
Telecommunications customers increasingly view their digital connectivity as essential, just as power and water are essential. The clause helps to deliver on those higher expectations. According to research by Ofcom, customers suffering from a loss of broadband service incur on average a direct financial cost of £18, spend an average of four hours trying to resolve the issue, and have to contact their provider an average of three times. Automatic compensation will mean that customers will receive standardised compensation for specific service failures, either without having to complain directly or through a streamlined process.
Ofcom has made a call for inputs and will be consulting with customers, customer groups, industry and all parties that want to enter the consultation, including devolved Governments. It will define which services and service quality issues will be eligible, how much the compensation will be, and the fault-identification and payment processes. The consultation process will ensure that the compensation scheme is fair and proportionate, mitigating the risk of additional costs being passed on to customers.
Clause 3 accordingly ordered to stand part of the Bill.
Clause 4
The electronic communications code
Question proposed, That the clause stand part of the Bill.
Louise Haigh
Clause 4 contains changes to the highly complex electronic communications code, as we heard earlier in the debate. We recognise and support the amendments tabled in the Minister’s name, which seek to clarify the web of legal technicalities and ensure that it interconnects with the existing legal landscape; that the new code does not infringe on access to land where the person does not agree to that access being obstructed; and that subsisting agreements continue in place.
Our primary concern is to ensure that the significant savings that the clause will clearly create for the mobile industry are invested in their entirety into infrastructure and roll-out for the public benefit.
We would also like to explore what consideration has been given to how we can ensure that independently-owned infrastructure can have a significant role in the sector and, if possible, make up a larger proportion of our infrastructure in line with the global market. The much-discussed difficulties of the broadband roll-out highlight the issues when infrastructure is owned by a private monopoly. We should seek to break up this market as much as possible. For that to happen, investment incentives for independent infrastructure need to be maintained as they are under the current ECC.
The assets of these small infrastructure providers, which are a valuable part of the market, are dependent on land. We would like a commitment from the Minister that further inevitable redrafts continue to carve out electrical communications apparatus from the definition of land. The benefit of independent infrastructure is the much higher capacity available for all networks to use on an open and non-discriminatory basis. Operators in this space filled more substantial towers, which send signals much further than an average mobile operator-owned mast. That is particularly important in rural areas, where more than half their investments have been made. More networks operating from better infrastructure enable transformational improvements in capacity.
The sector also unlocks significant new inward investment with a low cost of capital from the same funds that invest in UK energy, transport and utility assets. Clearly, significant investment is needed in the UK’s wireless infrastructure. Improving mobile connectivity needs substantial and sustained investment. New communication masts are needed in rural and suburban areas to improve coverage. In urban areas, to support the exponential growth in mobile data usage and provide ubiquitous high-speed connectivity, 5G networks will need hundreds of thousands of small cells connected with a dense network of fibre.
Analysis from Ernst & Young highlights that independently operated towers across Europe and North America host, on average, twice as many networks as vertically-owned towers. The UK is now lagging behind competitive telecoms markets around the world in respect of adopting the more efficient independent model; more than 60% of global and 80% of US masts are now operated independently of the networks that use them. Independent infrastructure can deliver investment in a way that maximises its productivity and enables the greatest level of connectivity.
Furthermore, we are aware that the industry has concerns about the clause given what is known as “stopping up”. That is the procedure that highway authorities use to decommission stretches of public highway. Under the new code, when streets are stopped up, the occupier of the land can give notice to quit and mobile operators would not then be able to cover the cost of relocation.
As I understand it, unlike the other reforms, this reform is intended to apply retrospectively, so we would be interested to hear the Minister’s thinking. More broadly on the clause, clearly the Minister and officials are attempting to make revisions to this enormously complex code, which obstructs or interferes with the means of access to this land.
There is a broader point. Despite the additional powers that the Bill provides to telcos over the landowners, in practice there absolutely must remain a solid working relationship between the two. As we heard in evidence last week, if good relationships are not continued, the industry might as well just go home for the next four to five years and forget about further expanding the network, such is the importance of good relationships and access to allow for upgrading and installing new infrastructure.
Industry evidence suggests that, on average, infrastructure facilities will need to be accessed every 12 days, so we must ensure that the legislation strikes the right balance between increasing access, which will help to upgrade the network, and maintaining a good relationship with the landowners who will help that roll-out.
The clause is intended to improve mobile coverage, so I will go back to something that the Minister said on Tuesday in Committee:
“That is why delivery on this commitment by the MNOs”—
that is, by the mobile network operators—
“is so important. The deal as agreed, which is a legally binding commitment, will result in nearly 100% of UK premises receiving 3G/4G data coverage, and 98% coverage to the UK landmass by the end of 2017.”—[Official Report, Digital Economy Public Bill Committee, 18 October 2016; c. 124.]
Those figures were not immediately familiar to me at the time. As I understand it, they were not in the legal agreement between the Government and the mobile network operators, which only requires guaranteed voice and text to each operator by 2017 to 90% and full coverage to 85% by 2017.
I believe that the Minister may have been referring to the new emergency service contract, which is being delivered by EE. That is exactly the point I was making: that is only one operator. Furthermore, is it not the case that currently only 46% of premises have access to 4G from all mobile network operators and that there remains a substantial 7%, or 1.5 million homes nationwide, that do not have basic voice or text coverage across the three networks?
The roll-out of this vital infrastructure by EE for the benefit of emergency services is obviously welcome and the coverage figures for the UK landmass are impressive. However, that does not constitute universal coverage, as it will be only for the benefit of EE customers, unless some kind of agreement that we are not aware of has been reached. Clearly, although that means that data coverage is reaching all corners of the UK, there is no parity of provision across the mobile network operators and that near-universal coverage, which is so needed, is still far from a reality.
New clause 20, to which we will return later, seeks to do something about that. It would empower the Secretary of State to commission a strategic review of mobile network coverage and to consider measures to enable universal coverage for residences across all telecommunications providers. That would enable the Government to take a second look at ways, including national roaming, genuinely to extend coverage across 3G and 4G to all network providers, because, as the Minister said in Committee on Tuesday, it is no good having full coverage with one provider if the others are not covered.
Calum Kerr
That was an excellent introduction from the Opposition spokesperson, highlighting a lot of the issues. I will try not to repeat them.
What I will do, however, is start by welcoming these overdue changes to the electronic communications code. We absolutely need to make it much easier for infrastructure to be rolled out—not just for masts; this also applies to the likes of Virgin, which is very concerned about wayleaves and access and how it can roll out wire networks. We very much welcome anything that will help increase coverage across the whole of the UK, and in particular across Scotland.
Matt Hancock
Clause 4 amends the Telecommunications Act 1984 and the Communications Act 2003 to give force to the new electronic communications code, which is in schedule 1 to the Bill. That includes repealing the existing code, which is currently set out in schedule 2 to the 1984 Act and schedule 3A to the 2003 Act. So in a sense the clause is short because it gives effect to a lot of detail set out elsewhere.
I will answer some of the questions. Of course we consult the Scottish Government on many of these matters, just as we consult local authorities all around England and the Welsh and Northern Ireland Governments. Communications are a reserved matter, but obviously how they are delivered in each jurisdiction is important.
Let me address the point about 5G and the importance of fibre. Fibre is the future. A very strong fibre backbone is very important for the roll-out of 5G; hon. Members on both sides of the Committee agree on that. However, that does mean that getting down the cost of sites is important. I agree with the hon. Member for Berwickshire, Roxburgh and Selkirk that this is not about single mobile phone providers having sites. Wireless infrastructure providers make up one third of the market. That is lower than in other countries, but it is important.
This comes down to the question of cost. It is wrong to argue that because some of these sites are hosted by the Forestry Commission and other parts of the public sector, we should not reduce the cost and make it easier to roll out infrastructure; you can’t have your cake and eat it. We want to make it easier to roll out infrastructure. That is why we think it is good that the costs come down. However, most of these deals will remain commercial deals. What we are putting in place is a lower backstop, which I think is the right approach.
On the points made about the MNO deal for coverage, the hon. Member for Sheffield, Heeley is precisely right in her analysis of what I said. The figures that I gave on Tuesday are for the expected national result of the individual contractual requirements. I agree with her, of course, that it is better to have all MNOs available in one place, but having one rather than none is the first and most important step.
Dealing with notspots is the most important stage; the next is dealing with partial notspots: areas of the country covered by some but not all providers. That is why there is a difference between particular contracts and the figures that I gave, although EE’s contract—partly because it has the emergency service contract, which will come into force at the end of next year—has the widest expected future coverage of all the MNOs. The hon. Lady is exactly right. I would just say that we must not let the best be the enemy of the good; let us keep the roll-out going.
On the point that the hon. Lady made about stocking up, we are engaging with stakeholders to consider the concerns, and we will ensure that there is no retrospective effect. On the distinction between land and apparatus, we think that there is one, and we want to ensure that the revised code delivers access to viable sites. That is fundamental to the legal framework underpinning the deployment of electronic communication apparatus, and it must be the case regardless of whether it is on land owned by the operator or any other market player.
There is clearly a delicate balance to be achieved when considering what must be left purely to commercial agreement and what should be regulated in the code. Restricting the scope of legislation too far is likely to be counterproductive to ensuring that viable land remains on the market. We believe that the revised code achieves that balance effectively. I hope that I have made the case effectively for the revised code, and I hope that it helps ensure that we can roll out wireless infrastructure more widely across Britain. I commend the clause to the Committee.
Question put and agreed to.
Clause 4 accordingly ordered to stand part of the Bill.
Schedule 1
The electronic communications code
Matt Hancock
I beg to move amendment 12, in schedule 1, page 82, line 29, leave out “and keep”.
The code will deal with cases where apparatus has already been installed on land. Amendments 12, 13 and 14 therefore provide for installing apparatus and keeping apparatus on land to be treated separately, and for rights described in sub-paragraphs (c), (ca) and (d) to be described consistently with this.
Matt Hancock
This is a series of Government amendments to improve the new code. Amendments 12 to 14 are minor drafting amendments to clarify that the new electronics communications code will allow already installed apparatus to be kept on land, and to ensure consistency of terminology in paragraph 3 of the code. The remaining amendments are to part 6 of the new code, which deals with the right to remove electronic communications apparatus from land and related rights.
Amendment 24 inserts a new paragraph 36(a) into the code to provide that an owner or occupier of neighbouring land has a right to remove apparatus from other land where it obstructs access. If apparatus is installed on land A, the owner or occupier of land B can require removal where it obstructs or interferes with access to their own land. Amendment 25 inserts another new paragraph into the code to provide that an owner or occupier of neighbouring land also benefits from the right to require an operator to disclose whether it owns the apparatus, as it is important for neighbours to know that.
Amendments 15, 18, 26 to 30 and 32 to 35 are consequential on amendment 24 and 25. Amendment 37 inserts new paragraphs 38(a) and (b) to provide that the right to require removal of apparatus applies not only to those with an interest in land but also to a person whose right to require removal of apparatus arises from statute or other legal basis. It is necessary to establish the procedures by which such parties can require the removal of the electronic communications apparatus.
Amendments 16, 23, 40, 41, 43 and 45 are consequential on amendment 37. Amendment 38 clarifies how a person with an interest in the land can, when there is no longer apparatus on that land, ask the court to restore the land to its original condition, and amendments 19, 20, 39, 40 and 44 are consequential on that.
Amendment 31 clarifies that a landowner or occupier can require the removal of apparatus only in accordance with the procedure set out in the code. Amendment 36 ensures that proceedings before a court to enforce removal cannot finally be determined until any application for new rights made by the operator has been concluded, and amendment 17 is consequential on that.
Paragraph 36 of the new code provides for conditions that must be met before a landowner has the right to require the removal of apparatus from their land, and amendment 21 clarifies paragraph 36(2). Amendment 22 clarifies that a person whose code agreement was not subject to part 5 can apply to remove electronic communications apparatus when the code rights have ceased to apply to them.
Amendment 12 agreed to.
Amendments made: 13, in schedule 1, page 82, line 30, at end insert—
(aa) to keep installed electronic communications apparatus which is on, under or over the land,”.
The code will deal with cases where apparatus has already been installed on land. Amendments 12, 13 and 14 therefore provide for installing apparatus and keeping apparatus on land to be treated separately, and for rights described in sub-paragraphs (c), (ca) and (d) to be described consistently with this.
Amendment 14, in schedule 1, page 83, line 2, leave out from “installation” to end of line 4 and insert
“of electronic communications apparatus on, under or over the land or elsewhere;
(ca) to carry out any works on the land for or in connection with the maintenance, adjustment, alteration, repair, upgrading or operation of electronic communications apparatus which is on, under or over the land or elsewhere,”.
The code will deal with cases where apparatus has already been installed on land. Amendments 12, 13 and 14 therefore provide for installing apparatus and keeping apparatus on land to be treated separately, and for rights described in sub-paragraphs (c), (ca) and (d) to be described consistently with this.
Amendment 15, in schedule 1, page 86, line 26, leave out
“The reference in sub-paragraph (2)”
and insert
“A reference in this code”.
This applies the extended meaning of “means of access to or from land” across the code. It is consequential on amendment 24.
Amendment 16, in schedule 1, page 95, line 2, after “36” insert
“or as mentioned in paragraph 38A(1)”.
This is consequential on amendment 37.
Amendment 17, in schedule 1, page 95, line 10, leave out “or” and insert “and”.
This is consequential on amendment 36.
Amendment 18, in schedule 1, page 102, line 1, leave out
“with an interest in land”.
This is consequential on amendment 37.
Amendment 19, in schedule 1, page 102, line 3, at end insert
“or the restoration of land,”.
This is consequential on amendment 38.
Amendment 20, in schedule 1, page 102, line 6, after “removal” insert
“of apparatus or restoration of land”.
This is consequential on amendment 38.
Amendment 21, in schedule 1, page 102, line 14, after “never” insert
“since the coming into force of this code”.
This provides for a condition for having a right to require removal of apparatus to be met if the only right there has been to keep the apparatus on the land was a right that came to an end under the code that Schedule 1 to the Bill replaces, or that ceased under that code to be binding on the landowner.
Amendment 22, in schedule 1, page 102, line 24, at end insert “, or
( ) where the right was granted by a lease to which Part of this code does not apply.”.
Part 5 of the code (termination of agreements creating code rights) does not apply to certain leases governed by landlord and tenant law. The amendment provides for the ending of code rights under such a lease and under Part 5 to be treated in the same way for the purposes of rights to require removal of apparatus.
Amendment 23, in schedule 1, page 103, line 17, at end insert—
‘( ) This paragraph does not affect rights to require the removal of apparatus under another enactment (see paragraph 38A).”.
This is consequential on amendment 37.
Amendment 24, in schedule 1, page 103, line 17, at end insert—
“When does a landowner or occupier of neighbouring land have the right to require removal of electronic communications apparatus?
36A (1) A landowner or occupier of any land (“neighbouring land”) has the right to require the removal of electronic communications apparatus on, under or over other land if both of the following conditions are met.
(2) The first condition is that the exercise by an operator in relation to the apparatus of a right mentioned in paragraph 13(1) interferes with or obstructs a means of access to or from the neighbouring land.
(3) The second condition is that the landowner or occupier of the neighbouring land is not bound by a code right within paragraph 3(f) entitling an operator to cause the interference or obstruction.
(4) A landowner of neighbouring land who is not the occupier of the land does not meet the second condition if—
(a) the land is occupied by a person who—
(i) conferred a code right (which is in force) entitling an operator to cause the interference or obstruction, or
(ii) is otherwise bound by such a right, and
(b) that code right was not conferred in breach of a covenant enforceable by the landowner.
(5) In the application of sub-paragraph (4)(b) to Scotland the reference to a covenant enforceable by the landowner is to be read as a reference to a contractual term which is so enforceable.”.
New paragraph 36A makes provision for a landowner or occupier of neighbouring land to have a right to require removal of apparatus that obstructs or interferes with a means of access to that land.
Amendment 25, in schedule 1, page 103, line 27, at end insert—
‘(1A) A landowner or occupier of neighbouring land may by notice require an operator to disclose whether—
(a) the operator owns electronic communications apparatus on, under or over land that forms (or, but for the apparatus, would form) a means of access to the neighbouring land, or uses such apparatus for the purposes of the operator’s network, or
(b) the operator has the benefit of a code right entitling the operator to keep electronic communications apparatus on, under or over land that forms (or, but for the apparatus, would form) a means of access to the neighbouring land.”.
This is consequential on amendment 24. Paragraph 37(1A) provides for a landowner or occupier of neighbouring land to have the rights in paragraph 37 to require an operator to disclose whether it owns apparatus or has code rights relevant to the neighbouring land.
Amendment 26, in schedule 1, page 103, line 33, after “(1)” insert “or (1A)”.
This is consequential on amendment 25.
Amendment 27, in schedule 1, page 103, line 34, after “landowner” insert “or occupier”.
This is consequential on amendment 25.
Amendment 28, in schedule 1, page 103, line 37, after “landowner” insert “or occupier”.
This is consequential on amendment 25.
Amendment 29, in schedule 1, page 103, line 38, after “landowner” insert “or occupier”.
This is consequential on amendment 25.
Amendment 30, in schedule 1, page 103, line 47, after “landowner” insert “or occupier”.
This is consequential on amendment 25.
Amendment 31, in schedule 1, page 104, line 2, leave out from beginning to “requiring” in line 9 and insert—
(1) The right of a landowner or occupier to require the removal of electronic communications apparatus on, under or over land, under paragraph 36 or 36A, is exercisable only in accordance with this paragraph.
(2) The landowner or occupier may give a notice to the operator whose apparatus it is”.
The amendment clarifies that a landowner or occupier can require removal of electronic communications apparatus only in accordance with the procedure set out in paragraph 38.
Amendment 32, in schedule 1, page 104, line 23, after “landowner” insert “or occupier”.
This is consequential on amendment 24.
Amendment 33, in schedule 1, page 104, line 33, after “landowner” insert “or occupier”.
This is consequential on amendment 24.
Amendment 34, in schedule 1, page 104, line 40, after “landowner” insert “or occupier”.
This is consequential on amendment 24.
Amendment 35, in schedule 1, page 104, line 41, after “landowner” insert “or occupier”.
This is consequential on amendment 24.
Amendment 36, in schedule 1, page 104, line 42, at end insert—
‘( ) On an application under sub-paragraph (6) or (7) the court may not make an order in relation to apparatus if an application under paragraph 19(3) has been made in relation to the apparatus and has not been determined.”.
This provides that the court cannot order removal of apparatus under Part 6 of the code if there is an outstanding application under paragraph 19 (to keep the apparatus installed) that has not been determined.
Amendment 37, in schedule 1, page 104, line 42, at end insert—
“How are other rights to require removal of apparatus enforced?
38A (1) The right of a person (a “third party”) under an enactment other than this code, or otherwise than under an enactment, to require the removal of electronic communications apparatus on, under or over land is exercisable only in accordance with this paragraph.
(2) The third party may give a notice to the operator whose apparatus it is, requiring the operator—
(a) to remove the apparatus, and
(b) to restore the land to its condition before the apparatus was placed on, under or over the land.
(3) The notice must—
(a) comply with paragraph 85 (notices given by persons other than operators), and
(b) specify the period within which the operator must complete the works.
(4) The period specified under sub-paragraph (3) must be a reasonable one.
(5) Within the period of 28 days beginning with the day on which notice under sub-paragraph (2) is given, the operator may give the third party notice (“counter-notice”)—
(a) stating that the third party is not entitled to require the removal of the apparatus, or
(b) specifying the steps which the operator proposes to take for the purpose of securing a right as against the third party to keep the apparatus on the land.
(6) If the operator does not give counter-notice within that period, the third party is entitled to enforce the removal of the apparatus.
(7) If the operator gives the third party counter-notice within that period, the third party may enforce the removal of the apparatus only in pursuance of an order of the court that the third party is entitled to enforce the removal of the apparatus.
(8) If the counter-notice specifies steps under paragraph (5)(b), the court may make an order under sub-paragraph (7) only if it is satisfied—
(a) that the operator is not intending to take those steps or is being unreasonably dilatory in taking them; or
(b) that taking those steps has not secured, or will not secure, for the operator as against the third party any right to keep the apparatus installed on, under or over the land or to re-install it if it is removed.
(9) Where the third party is entitled to enforce the removal of the apparatus, under sub-paragraph (6) or under an order under sub-paragraph (7), the third party may make an application to the court for—
(a) an order under paragraph 39(1) (order requiring operator to remove apparatus etc), or
(b) an order under paragraph 39(2) (order enabling third party to sell apparatus etc).
(10) If the court makes an order under paragraph 39(1), but the operator does not comply with the agreement imposed on the operator and the third party by virtue of paragraph 39(5), the third party may make an application to the court for an order under paragraph 39(2).
(11) An order made on an application under this paragraph need not include provision within paragraph 39(1)(b) or (2)(d) unless the court thinks it appropriate.
(12) Sub-paragraph (9) is without prejudice to any other method available to the third party for enforcing the removal of the apparatus.
How does paragraph 38A apply if a person is entitled to require apparatus to be altered in consequence of street works?
38B (1) This paragraph applies where the third party’s right in relation to which paragraph 38A applies is a right to require the alteration of the apparatus in consequence of the stopping up, closure, change or diversion of a street or road or the extinguishment or alteration of a public right of way.
(2) The removal of the apparatus in pursuance of paragraph 38A constitutes compliance with a requirement to make any other alteration.
(3) A counter-notice under paragraph 38A(5) may state (in addition to, or instead of, any of the matters mentioned in paragraph 38A(5)(b)) that the operator requires the third party to reimburse the operator in respect of any expenses incurred by the operator in or in connection with the making of any alteration in compliance with the requirements of the third party.
(4) An order made under paragraph 38A on an application by the third party in respect of a counter-notice containing a statement under sub-paragraph (3) must, unless the court otherwise thinks fit, require the third party to reimburse the operator in respect of the expenses referred to in the statement.
(5) Paragraph 39(2)(b) to (e) do not apply.
(6) In this paragraph—
“road” means a road in Scotland;
“street” means a street in England and Wales or Northern Ireland.”.
New paragraphs 38A and 38B provide for a right to require removal of electronic communications apparatus to be available to not only to a person with an interest in land (see paragraph 36(1)) but also to a “third party” whose right to require removal of apparatus arises pursuant to an enactment, or on some other legal basis.
Amendment 38, in schedule 1, page 104, line 42, at end insert—
“When can a separate application for restoration of land be made?
38C (1) This paragraph applies if—
(a) the condition of the land has been affected by the exercise of a code right, and
(b) restoration of the land to its condition before the code right was exercised does not involve the removal of electronic communications apparatus from any land.
(2) The occupier of the land, the owner of the freehold estate in the land or the lessee of the land (“the relevant person”) has the right to require the operator to restore the land if the relevant person is not for the time being bound by the code right.
This is subject to sub-paragraph (3).
(3) The relevant person does not have that right if—
(a) the land is occupied by a person who—
(i) conferred a code right (which is in force) entitling the operator to affect the condition of the land in the same way as the right mentioned in sub-paragraph (1), or
(ii) is otherwise bound by such a right, and
(b) that code right was not conferred in breach of a covenant enforceable by the relevant person.
(4) In the application of sub-paragraph (3)(b) to Scotland the reference to a covenant enforceable by the relevant person is to be read as a reference to a contractual term which is so enforceable.
(5) A person who has the right conferred by this paragraph may give a notice to the operator requiring the operator to restore the land to its condition before the code right was exercised.
(6) The notice must—
(a) comply with paragraph 85 (notices given by persons other than operators), and
(b) specify the period within which the operator must complete the works.
(7) The period specified under sub-paragraph (6) must be a reasonable one.
(8) Sub-paragraph (9) applies if, within the period of 28 days beginning with the day on which the notice was given, the landowner and the operator do not reach agreement on any of the following matters—
(a) that the operator will restore the land to its condition before the code right was exercised;
(b) the time at which or period within which the land will be restored.
(9) The landowner may make an application to the court for—
(a) an order under paragraph 39(1A) (order requiring operator to restore land), or
(b) an order under paragraph 39(2A) (order enabling landowner to recover cost of restoring land).
(10) If the court makes an order under paragraph 39(1A), but the operator does not comply with the agreement imposed on the operator and the landowner by virtue of paragraph 39(5), the landowner may make an application to the court for an order under paragraph 39(2A).
(11) In the application of sub-paragraph (2) to Scotland the reference to a person who is the owner of the freehold estate in the land is to be read as a reference to a person who is the owner of the land.”.
New paragraph 38C makes provision about restoration of land where restoration does not involve the removal of apparatus.
Amendment 39, in schedule 1, page 105, line 2, at end insert—
‘(1A) An order under this sub-paragraph is an order that the operator must, within the period specified in the order, restore the land to its condition before the code right was exercised.”.
This is consequential on amendment 38.
Amendment 40, in schedule 1, page 105, line 3, after “landowner” insert
“, occupier or third party”.
This is consequential on amendments 24 and 37.
Amendment 41, in schedule 1, page 105, line 15, after “landowner” insert
“, occupier or third party”,
This is consequential on amendments 24 and 37.
Amendment 42, in schedule 1, page 105, line 15, at end insert—
‘(1A) An order under this sub-paragraph is an order that the landowner may recover from the operator the costs of restoring the land to its condition before the code right was exercised.”.
This is consequential on amendment 38.
Amendment 43, in schedule 1, page 105, line 16, after “paragraph” insert
“on an application under paragraph 38”.
This is consequential on amendments 24 and 37.
Amendment 44, in schedule 1, page 105, line 24, after “(1)” insert “or (1A)”.
This is consequential on amendment 38.
Amendment 45, in schedule 1, page 105, line 25, after “landowner” insert
“, occupier or third party”.—(Matt Hancock.)
This is consequential on amendments 24 and 37.
Question proposed, That the schedule, as amended, be the First schedule to the Bill.
Matt Hancock
This schedule is the reformed electronic communications code, which is to be inserted into the Communications Act 2003. The debate we have just had on clause 4, which repeals the previous code, explains precisely why the new code is important. This is all about making sure that the law is up to date. The code was established by the 1984 Act and has not been substantively amended since then. The legal framework just has not kept pace with rapid changes. Our debate on clause 4 demonstrates why it is important to get this right.
The revised code forms part of a series of measures to improve this country’s communications infrastructure. We have worked closely with the devolved Administrations to make sure that the code will work effectively in all jurisdictions. The code has 17 parts, each dealing with the rights and responsibilities of site providers and operators, and I will quickly go through each part.
Part 1 is about the concepts in the code, including some of the definitions. Part 2 sets out how code rights are conferred and on whom they are binding. Part 3 sets out the automatic rights to assign code rights and addresses the upgrading and sharing of apparatus. Part 4 sets out the circumstances in which a court can impose an agreement where one cannot be reached between the parties—that is a crucial element of the code—including the procedures to be followed in such circumstances.
Parts 5 and 6 address how parties can bring an agreement to an end and how landowners can have apparatus removed. Parts 7 to 10 address the regime in place for land that requires distinct treatment due to its particular characteristics, such as transport land. Parts 11 and 12 provide rights for third parties to object to apparatus. Part 13 addresses the right to lop trees. Parts 14 and 15 make provision for compensation notices under the code. Part 16 provides for enforcement and dispute resolution, and it introduces the power for the Secretary of State to make regulations to transfer jurisdiction on code cases to the Upper Tribunal (Lands Chamber). Lastly, part 17 contains supplementary provisions, including on general interpretation, and addresses the definition of “land”.
The crucial reason for the changes is that part 2 is structured to underpin consensual agreements for code rights. As we discussed, consensual agreements are important, but, where agreement cannot be reached, part 4 means that a court has the power to impose code rights against a site provider in favour of an operator. The court can calculate the price an operator should pay a site provider for code rights.
Matt Hancock
I beg to move amendment 46, in schedule 2, page 138, line 17, leave out “under paragraph 2(1)” and insert—
“for the purposes of paragraph 2 or 3”.
This provides that the subsisting agreements covered by the transitional provisions in Schedule 2 include agreements under paragraph 3(1) of the existing code (agreement to confer a right to obstruct access) as well as paragraph 2(1).
The Chair
With this it will be convenient to discuss Government amendments 47 to 54 and Government amendment 1.
Matt Hancock
This is a group of technical amendments. Amendments 46 to 54 are to schedule 2, which contains transitional arrangements for moving from the existing code to the new code introduced by the Bill. The amendments will clarify and simplify the transitional provisions in the schedule. Amendment 1 is a drafting change to make clear that the power in clause 5 to make transitional provision in connection with the new electronic communications code includes the power to make saving provision.
Amendment 46 agreed to.
The Chair
With the leave of the Committee, I propose that we combine the questions on Government amendments 47 to 54 as a single question.
Amendments made: 47, in schedule 2, page 138, line 28, at end insert—
‘(2) A person who is bound by a right by virtue of paragraph 2(4) of the existing code in consequence of a subsisting agreement is, after the new code comes into force, treated as bound pursuant to Part 2 of the new code.’
This provides that a person who was bound by a right pursuant to a subsisting agreement (see paragraph 2(4) of the existing code) continues to be treated as bound by that agreement, under the provisions of Part 2 of the new code (see paragraph 10 of the new code).
Amendment 48, in schedule 2, page 138, line 31, after “are” insert “— (a)”
Amendments 48, 49 and 50 are consequential on amendment 46 and provide for references in the new code to a “code right” in relation to a subsisting agreement to have the corresponding meaning depending on whether the agreement was for the purposes of paragraphs 2(1) or (3(1) of the existing code.
Amendment 49, in schedule 2, page 138, line 31, leave out “the agreement” and insert—
“an agreement for the purposes of paragraph 2 of the existing code”
Amendments 48, 49 and 50 are consequential on amendment 46 and provide for references in the new code to a “code right” in relation to a subsisting agreement to have the corresponding meaning depending on whether the agreement was for the purposes of paragraphs 2(1) or (3(1) of the existing code.
Amendment 50, in schedule 2, page 138, line 33, at end insert—
‘(b) in relation to land to which an agreement for the purposes of paragraph 3 of the existing code relates, a right to do the things mentioned in that paragraph.’
Amendments 48, 49 and 50 are consequential on amendment 46 and provide for references in the new code to a “code right” in relation to a subsisting agreement to have the corresponding meaning depending on whether the agreement was for the purposes of paragraphs 2(1) or (3(1) of the existing code.
Amendment 51, in schedule 2, page 139, line 11, leave out sub-paragraph (1) and insert—
‘5A (1) This paragraph applies in relation to a subsisting agreement, in place of paragraph 28(2) to (4) of the new code.
(2) Part 5 of the new code (termination and modification of agreements) does not apply to a subsisting agreement that is a lease of land in England and Wales, if—
(a) it is a lease to which Part 2 of the Landlord and Tenant Act 1954 applies, and
(b) there is no agreement under section 38A of that Act (agreements to exclude provisions of Part 2) in relation the tenancy.
(3) Part 5 of the new code does not apply to a subsisting agreement that is a lease of land in England and Wales, if—
(a) the primary purpose of the lease is not to grant code rights (the rights referred to in paragraph 3 of this Schedule), and
(b) there is an agreement under section 38A of the 1954 Act in relation the tenancy.
(4) Part 5 of the new code does not apply to a subsisting agreement that is a lease of land in Northern Ireland, if it is a lease to which the Business Tenancies (Northern Ireland) Order 1996 (SI 1996/725 (NI 5)) applies.
6 (1) Subject to paragraph 5A, Part 5 of the new code applies to a subsisting agreement with the following modifications.’
The amendment provides for the interaction of landlord and tenant law and Part 5 of the new code (termination and modification of agreements) in the case of subsisting agreements (see paragraph 1(4) of Schedule 2).
Amendment 52, in schedule 2, page 140, line 17, leave out
“the following provisions of this paragraph” and insert “sub-paragraph (3)”
This is consequential on amendment 53.
Amendment 53, in schedule 2, page 140, line 21, leave out sub-paragraphs (4) to (10)
This relates to applications under paragraph 5(1) of the existing code (power of court to dispense with need for required agreement). The effect of the amendment is that, if an application has been made to the court before the new code comes into force, the procedures under the existing code apply, but any resultant order takes effect as an order made under the new code.
Amendment 54, in schedule 2, page 142, line 7, leave out paragraphs 19 to 22 and insert—
‘19A (1) This paragraph applies where before the repeal of the existing code comes into force a person has given notice under paragraph 21(2) of that code requiring the removal of apparatus.
(2) The repeal does not affect the operation of paragraph 21 in relation to anything done or that may be done under that paragraph following the giving of the notice.
(3) For the purposes of applying that paragraph after the repeal comes into force, steps specified in a counter-notice under sub-paragraph (4)(b) of that paragraph as steps which the operator proposes to take under the existing code are to be read as including any corresponding steps that the operator could take under the new code or by virtue of this Schedule.’—(Matt Hancock.)
The amendment replaces transitional provisions for requiring the removal of apparatus. It provides for paragraph 21 of the existing code to continue to apply if a notice under that paragraph has been given, but treats an operator seeking rights to keep the apparatus installed as seeking rights also under the new code or transitional provisions.
Schedule 2, as amended, agreed to.
Schedule 3
The electronic communications code: consequential amendments
Question proposed, That the schedule be the Third schedule to the Bill.
The Chair
With this it will be convenient to discuss Government new schedule 1—Electronic communications code: consequential amendments.
Matt Hancock
Schedule 3 contains consequential amendments that accompany the electronic communications code found in schedule 1. They amend existing legislation to ensure that implementation aligns and is consistent with other existing legislation. Since the introduction of the Bill, a number of additional necessary consequential amendments have been identified. New schedule 1 substitutes a new, revised and more comprehensive schedule, which contains an expanded list of necessary consequential amendments. I will therefore move new schedule 1 at the appropriate point in our proceedings.
Schedule 3 disagreed to.
Clause 5
Power to make transitional provision in connection with the code
Amendment made: 1, in clause 5, page 3, line 23, leave out “or transitory” and insert “, transitory or saving”—(Matt Hancock.)
The amendment adds power to make saving provision in connection with the coming into force of the new electronic communications code.
Clause 5, as amended, ordered to stand part of the Bill.
Clauses 6 and 7 ordered to stand part of the Bill.
Clause 8
Regulation of dynamic spectrum access services
Matt Hancock
I beg to move amendment 2, in clause 8, page 8, line 16, leave out “imposed” and insert “specified”.
This amendment reflects the fact that a notification under new section 53E of the Wireless Telegraphy Act 2006 will specify a penalty rather than imposing it.
Matt Hancock
Amendments 2 to 6 are all technical amendments, to enable Ofcom to register dynamic spectrum access service providers and to set out what Ofcom can do where there is a contravention of the restrictions or conditions of registration.
Amendment 2 agreed to.
Amendments made: 3, in clause 8, page 8, line 19, at end insert—
‘( ) The amount of any other penalty specified under this section is to be such amount, not exceeding 10% of the relevant amount of gross revenue, as OFCOM think—
(a) appropriate, and
(b) proportionate to the contravention in respect of which it is imposed.”
This amendment ensures that the penalty based on the relevant amount of gross revenue applies only where the daily default penalty specified under new section 53F(4) of the Wireless Telegraphy Act 2006 does not apply.
Amendment 4, in clause 8, page 9, line 21, leave out subsection (1).
This amendment is consequential on amendment 3.
Amendment 5, in clause 8, page 9, line 25, leave out “this section” and insert “section 53F”.
This amendment is consequential on amendments 3 and 4.
Amendment 6, in clause 8, page 12, line 21, after “penalty” insert “specified”.—(Matt Hancock.)
This amendment brings new section 53L(5) of the Wireless Telegraphy Act 2006 into line with new section 53F(5) of that Act.
Question proposed, That the clause stand part of the Bill.
Louise Haigh
As the Committee is aware, spectrum which covers the electromagnetic frequency range from 3 kHz to 3,000 GHz is a central ingredient of all forms of wireless technology. The Opposition agree that making better use of spectrum is obviously essential to facilitate the development of the UK’s digital communications infrastructure. This is a national asset and it is important that the Government are constantly reviewing the way in which we can make better use of spectrum, particularly white space, which are used parts of the allocated spectrum.
It is also clearly important for Ofcom to have the power to police—for want of a better word—spectrum and it is important that, for instance, mobile network operators are achieving the coverage set out in their licence. We therefore support the specification of financial penalties if coverage requirements are not satisfied.
However, we would like reassurance on two issues: first, that amendment 2 does not water down the penalties that Ofcom can impose. The explanatory notes are not entirely clear and at present it seems as if, rather than allowing Ofcom to impose a penalty if coverage requirements are not satisfied, it simply must have regard to a potential penalty. We would welcome clarity from the Minister on that point.
My second, wider point is that, in the aftermath of Britain’s exit from the European Union, it is important that we continue to maintain influence in the allocations and regulation of spectrum. As the Minister will know, at present the EU member states harmonise spectrum access conditions EU-wide to ensure an efficient use of radio spectrum. In cases where there are conflicts between different usages of spectrum, they establish policy priorities. This is especially important with new and emerging technology, where the EU will ensure that fair allocation and reallocation of frequencies is harmonised across the European Union. In the aftermath of our exit from the EU, we must continue to communicate effectively with our European partners, as a pan-European strategy will still be in our interest. Will the Minister ensure that he continues to work closely with those partners, particularly as our loss of influence is unlikely to be compensated by our involvement in international forums?
Matt Hancock
I am very grateful for the Opposition’s support of the reforms to the way that spectrum is allocated. Spectrum is a finite asset and it is incredibly important that our digital communications, and especially wireless communications, increase so that we make best use of it. It is very good to see cross-party recognition of the importance of that management and that Ofcom play an excellent role in adjudicating on this.
I shall take the hon. Lady’s second specific question on the EU first. Of course we will continue discussions with neighbours about allocations. Ultimately, there are many spectrum frequencies that are dealt with on a global basis—for instance, those that are used in aviation. It is therefore important that we have international discussions, both in the EU and around the rest of the world. I can assure the hon. Lady that those discussions and that collaboration will continue. Indeed, some of it is going on as we speak.
On the hon. Lady’s first point about watering down the penalties, the way in which this is structured does not require a penalty, in case there are reasons not to have one, but allows for penalties. I think that gives Ofcom the necessary wiggle room, should it need it.
Question put and agreed to.
Clause 8, as amended, accordingly ordered to stand part of the Bill.
Clause 9
Statement of strategic priorities
Question proposed, That the clause stand part of the Bill.
Louise Haigh
We are grateful for the Minister’s reassurances in response to our concerns about clause 8. However, given those concerns, we think it is important that the statement of strategic priorities is updated in the aftermath of Britain’s exit from the EU and that consultation should begin right away. The statement of strategic priorities becomes much less clear after Brexit, when the Government will be required to take on significantly more of the burden and have much greater regard for the international element of spectrum access, as we will not be able to rely on European policy.
Clearly, Brexit will significantly alter the policy priorities of the Government in the operation of spectrum. We know that Ofcom is an international thought leader in this area, which may aid the Government. However, we believe that the statement must be amended to avoid any confusion and that that should be done in full consultation with industry.
Matt Hancock
The hon. Lady is dead right that we have to ensure that the strategic priorities take into account our exit from the European Union. Of course, some parts of spectrum that have very short distances can be set domestically, not least because there is a physical boundary of a minimum 26 miles between the UK and any other country. There are longer frequencies that have a bigger range, where minimising interference is important. Some are used on a global basis, in which case global agreement is required.
The issue has to be taken into account, and we will take on board the hon. Lady’s suggestion about ensuring that we have a statement of Government priorities post-Brexit that is appropriate to the UK outside the EU needing to engage with the EU, as well as with the rest of the world, and that domestic priorities are set where possible.
Calum Kerr
Spectrum licensing is our most effective tool for ensuring we get the coverage model we want. The form of the code will help, but it is through licensing that we will drive the level of coverage we want. Will the Minister confirm that the Government will leave nothing off the table in that? One option might be taking back spectrum where appropriate—for example, in rural areas that cannot be covered, as has happened in the US.
Matt Hancock
Of course, the management of spectrum needs to be as efficient as possible. The new dynamic spectrum management in clause 8, which we just agreed to, will help to deal with white space—spectrum that is not used but could be. New technology allows that to be used far more efficiently. I am delighted that we got unanimous support for clause 8. On clause 9 and setting out a set of strategic priorities, I am sure that the hon. Gentleman’s comments will be taken on board.
Question put and agreed to.
Clause 9 accordingly ordered to stand part of the Bill.
Clause 10
Penalties for contravention of wireless telegraphy licences
Matt Hancock
I beg to move amendment 7, in clause 10, page 16, line 7, at end insert—
‘( ) In Schedule 8 to that Act (decisions not subject to appeal), at the end of paragraph 44 insert “for a relevant multiplex contravention”.
This allows an appeal to the Competition Appeal Tribunal against a penalty imposed by OFCOM under section 42 of the Wireless Telegraphy Act 2006 for a breach of a wireless telegraphy licence, except where the breach relates only to broadcast content (in which case, as at present, an appeal to the Tribunal will not be possible).
Matt Hancock
Amendment 7 provides Ofcom with powers to impose a financial penalty for contravention of a wireless telegraphy licence condition. It will allow an appeal to be made to the Competition Appeal Tribunal against a decision by Ofcom to impose a penalty under section 42 of the Wireless Telegraphy Act 2006 except, as is currently the case, where the penalty is imposed for contravention of a condition relating to broadcast content.
Amendment 7 agreed to.
Clause 10, as amended, ordered to stand part of the Bill.
Clauses 11 to 13 ordered to stand part of the Bill.
Clause 14
Time limits for prosecutions under Wireless Telegraphy Act 2006
Matt Hancock
I beg to move amendment 8, in clause 14, page 17, line 10, leave out “and (8)”.
This is consequential on amendment 11.
Matt Hancock
The amendments will amend the Wireless Telegraphy Act 2006 to extend the time limit for bringing prosecutions for some summary offences—for example, those relating to unauthorised use of wireless telegraphy equipment. Amendment 10 makes provision about when proceedings in Scotland are deemed to have commenced for the purposes of the extended time limits. Amendments 8, 9 and 11 make minor changes to clarify the drafting.
Calum Kerr
Some of the amendments specifically relate to the law in a way that goes back to my earlier point. Will the Minister confirm whether the Scottish Administration have been consulted on this issue, given that it is clearly a devolved matter?
Matt Hancock
Yes—although I have had no discussions with them at a ministerial level about the amendments, I understand that discussions have taken place between officials. The effect of the amendments will be to make the law work better, so I hope they will have cross-party support.
Amendment 8 agreed to.
Amendments made: Government amendment 9, in clause 14, page 17, line 18, leave out “Subsections (3A) and (3B)” and insert
“Section 41(7) and subsection (3B) above”.
Subsection (3C), inserted in section 107 of the Wireless Telegraphy Act 2006 by the clause, lists enactments displaced by the time limits mentioned in subsections (3A) and (3B). Subsection (3A) merely refers to section 41(7), and the amendment substitutes a direct reference to that provision for the reference to subsection (3A).
Government amendment 10, in clause 14, page 17, line 26, at end insert—
“(3D) In relation to proceedings in Scotland, subsection (3) of section 136 of the Criminal Procedure (Scotland) Act 1995 (date when proceedings deemed to be commenced for the purposes of that section) applies also for the purposes of section 41(7) and subsection (3B) above.”.
The amendment adds provision about when proceedings in Scotland are deemed to be commenced for the purposes of the time limits in section 41(7) and new subsection (3B) of section 107 of the Wireless Telegraphy Act 2006.
Government amendment 11, in clause 14, page 17, line 31, at end insert—
“() for subsection (8) substitute—
“(8) For further provision about prosecutions see section 107.””.—(Matt Hancock.)
Existing section 41(8) of the Wireless Telegraphy Act 2006 applies to section 41(7) and is superseded by section 107(3C) inserted by the clause (see amendment 9). Amendment 10 also inserts provision applying to section 41(7) into section 107. Amendment 11 therefore substitutes a subsection referring the reader to section 107.
Clause 14, as amended, ordered to stand part of the Bill.
Clause 15
Internet pornography: requirement to prevent access by persons under the age of 18
Claire Perry
I beg to move amendment 65, in clause 15, page 18, line 15, at end insert—
“(d) how persons can make a report to the age-verification regulator about pornographic material available on the internet on a commercial basis that is not complying with subsection (1).”.
This amendment places a requirement on the age-verification regulator to provide guidance as to how persons can report non-compliant pornography websites to the age-verification regulator.
I am extremely glad to have tabled a series of amendments to the vital provisions in part 3 of the Bill. As I said on Second Reading, we have come such a long way, and the enormous cross-party consensus to make the internet safer for young people has been crucial to that. We have seen some very effective sponsorship and responses from the previous Minister and his Department under the leadership of the last Prime Minister. Without his championship of this issue, we would not be where we are today.
My intention in tabling the amendments was to make provisions that are already good somewhat better, in the spirit of trying to encourage the Government to think hard about the line-by-line drafting. It has been made clear to me in meetings with organisations such as the British Board of Film Classification that there are ways to enhance the role of a regulator. I am delighted that the BBFC has been given the role, because it is truly a trusted brand; it is innovative and it does brilliant work to define age-rating boundaries. I have listened carefully to it.
What I am looking for is a clearer understanding of how the Government envisage the process of regulating websites and apps that provide access to material defined as pornographic in the UK. In his evidence session last week, David Austin referred to
“stages 1 to 3 of the regulation.”––[Official Report, Digital Economy Public Bill Committee, 11 October 2016; c. 39, Q84.]
I would be interested to hear the Minister’s explanation of how those different stages might work and to understand better how the enforcement element will work in practice—perhaps we will touch on that today but return to it in a later sitting.
I was struck by evidence given by those who do not support the changes; they feel that the issue is important but they argue that we should not be bringing in the new rules because we will not be able to make them stick. I must also mention my gratitude to the many organisations that have provided information and support on part 3 of the Bill. In particular, I note the contributions of Christian Action Research and Education, the Digital Policy Alliance, the National Society for the Prevention of Cruelty to Children and the Centre for Gender Equal Media.
My first amendment is to clause 15, which sets out the extremely welcome requirement that age verification should be introduced by websites and apps that are making commercial pornography available in the UK. Amendment 65 would add a new paragraph to clause 15(3) to strengthen enforcement by allowing the public and industry to provide intelligence to the regulator about the sites that do not have age verification.
I have always been struck by what we do not know about the internet. We all know that there is a massive proliferation of sites. I do accept what is said about much of the pornographic traffic concentrating around particular sites, but it grows like a Hydra every day. One of the BBFC’s most effective acts has been to allow effectively self-regulation and allow people to report and comment on a particular posting, which is, if you like, a sort of self-rating scheme. That would be extremely valuable. Clearly, the regulator cannot be expected to scrutinise the entire world of sites. Allowing members of the public and industry to notify the regulator that information is there that should be regulated would be helpful.
I note that the Digital Policy Alliance recommended in one of its parliamentary briefings back in April that this power should be available. It would be an excellent way to ensure that the public can feel involved in protecting their children. One of the messages I have heard over the past few years is how much families feel disempowered in the process of keeping their children safe. Of course, people accept the notion of parental responsibility and of course schools have become involved in this process, but we have made it uniquely difficult for families effectively to keep their children safe on a digital platform.
We have other rules and regulations around broadcast and written media that make it much easier for families wanting to be involved in that process. The amendment, allowing the BBFC to provide notice that these referrals can be made, would be very helpful. I note that David Austin of the BBFC said last week that he does intend to take referrals from the public.
Will the Minister please confirm that it is also the Government’s intention to promote the involvement of the whole community in championing online targeted child protection, and how this referral mechanism can be guaranteed? I hope he will consider this small change to the Bill.
Matt Hancock
Our intention is to establish a new regulatory framework and new regulatory powers tackling the viewing of adult content by minors. I pay tribute to the work of my hon. Friend over many years in getting us to this point. It has already ensured that there is voluntary activity, and that there are now legislative proposals is in many ways largely thanks to her campaigning. I am delighted that we have reached this point.
I am also delighted that, as we heard last week, the British Board of Film Classification will be designated as the age verification regulator. That is undoubtedly the best body in the land to do that job. It has the capability, as we heard at the evidence session. It will be responsible for identifying and notifying infringing sites. That will enable payment providers and other ancillary services to withdraw services from those providers that do not comply as soon as possible. Proceeding in that way will allow us to work quickly and effectively with all parts of the industry to ensure that they are fully engaged—indeed, that engagement has already started. We need to ensure the system is robust but fair and the providers of pornographic material are encouraged to be compliant by the processes in place.
I have every confidence, as I think we all should, in the BBFC’s ability to deliver on this. We heard from David Austin, the chief executive, in evidence that he is already working on this. He said that the BBFC would create something, and that it has done so with mobile operators. I think that its commitment to enable members of the public and organisations such as the NSPCC to report a particular website is the best way forward. That is a sensible approach for the regulator to take.
We should take a proportionate approach to the regulator’s role and allow the BBFC to do the job at which it is expert. We have required the regulator to issue guidance in circumstances where it allows the subjects of regulation to understand how the regime applies to them, but I think that going further and requiring this level of specification is not necessary, given the BBFC’s commitment and the uncontroversial nature of the need. That will give us flexibility as well as a clear commitment to make this happen. I hope that given that explanation, my hon. Friend will withdraw her amendment.
Claire Perry
I am pleased to hear that the Minister shares the view that the BBFC should be given a permissive regime to do some of the things it does well, rather than the Government specifying too much. With that assurance, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Louise Haigh
I beg to move amendment 85, in clause 15, page 18, line 20, leave out subsection (5)(a).
The Chair
With this it will be convenient to discuss the following:
Amendment 87, in clause 15, page 18, line 25, leave out subsection 6.
New clause 7—On-demand programme services: requirement to prevent persons under the age of 18 accessing pornographic material with an 18 classification certificate—
“On-demand programme services: requirement to prevent persons under the age of 18 accessing pornographic material with an 18 classification certificate
Section 368E of the Communication Act 2003 (harmful material) is amended as follows—
(a) in subsection (5)—
(i) after subsection (a) insert—
“(aa) a video work in respect of which the video works authority has issued an 18 classification certificate, and that it is reasonable to assume from its nature was produced solely or principally for the purposes of sexual arousal,”;
(ii) after subsection (b) insert—
“(ba) material that was included in a video work to which paragraph (aa) applies, if it is reasonable to assume from the nature of the material—
(i) that it was produced solely or principally for the purposes of sexual arousal, and
(ii) that its inclusion was among the reasons why the certificate was an 18 certificate,
“(bb) any other material if it is reasonable to assume from its nature—
(i) that it was produced solely or principally for the purposes of sexual arousal, and
(ii) that any classification certificate issued for a video work including it would be an 18 certificate.”
(b) in subsection (7) after “section” insert—
““18 certificate” means a classification certificate which—
(a) contains, pursuant to section 7(2)(b) of the Video Recordings Act 1984, a statement that the video work is suitable for viewing only by persons who have attained the age of 18 and that no video recording containing that work is to be supplied to any person who has not attained that age, and
(b) does not contain the statement mentioned in section 7(2)(c) of that Act that no video recording containing the video work is to be supplied other than in a licensed sex shop;””
This new clause requires the extension of measures for UK-based video on-demand programming to protect children from 18 material as well as R18 material.
Louise Haigh
The amendments all explicitly include on-demand programme services in the age verification measures proposed by the Government. Given the rise in the use of mobile devices and tablets in the past decade, the case for appropriate online pornography enforcement has increased. We commend the Government’s intention in the proposals. I also put on the record our thanks and congratulations to the hon. Member for Devizes, who has campaigned on this issue for many years along with many other hon. Members, not least my hon. Friend the Member for Bristol West.
The ultimate goal is to seek parity of protection for children between the online and offline worlds, but how that is done in practice is fraught with issues. I hope that we can improve the proposals before us. Teens have an emerging right to independent communication with friends and family, and we recognise and respect that. We must not fall back on outdated means of protection such as blanket parental permissions. We need to empower and protect young people in ways that make sense to them and that they can and will use.
As the Committee knows, the effects of online pornography on unhealthy attitudes to sex and relationships are only just starting to be explored, but the research indicates a troubling trend. The NSPCC study of more than 1,000 young people aged 11 to 18 found that over half the sample had been exposed to online pornography, and nearly all of that group—94%—had seen it by age 14. Just over half the boys believed that the pornography that they had seen was realistic, and a number of girls said that they worried about how it would make boys see girls and the possible impact on attitudes to sex and relationships. One respondent said:
“Because you don’t get taught how to go on the internet and keep yourself safe, there are loads of tricks to get you to give away or to go on a bad website.”
Crucially, in research by Barnardo’s, four fifths of teenagers agreed that it was too easy for young people to see pornography online by accident.
Adult products and spaces, including gambling shops, sex shops and nightclubs, are restricted in the offline sphere. Contents such as film and television, advertising and pornography are all also limited, with penalties ranging from fines to custodial sentences available to discharged proprietors who do not comply. It is a transparent, accountable process overseen by regulators and licence operators such as Ofcom, the BBFC and the Gambling Commission to ensure that children are protected from age-inappropriate content and experiences.
Labour is happy to support the Government’s efforts to introduce age verification, but we must ensure that enforcement is strong enough. Our amendment speaks to that broad aim of the Opposition, which I know is supported by Government Back Benchers, given the other amendments tabled today. However, the measure cannot be seen as a silver bullet, which is why tacking this manifesto commitment on to a Digital Economy Bill is inadequate. First, slotting it into a Bill on the digital economy gives the impression, however unintentional, that the measure is designed to deal only with commercial providers of pornography, those who exploit data or benefit from advertising or subscription services—those who are, in short, part of the digital economy, rather than all providers of pornography online.
Although we are aware that most pornography providers operate on a commercial basis, many do not. Peer-to-peer networks and Usenet groups, however difficult to police, would presumably not be in the scope of the Bill. That is on top of pornography available through apps that are commercial enterprises, such as Twitter and Tumblr, or free webpages, such as WordPress, where the provision of pornography is incidental or provides no income to the overall business, or is not used for commercial purposes at all. Under clause 15 as it stands, it is by no means clear that all pornography available on the internet will be subject to age verification requirements.
Allow me to remind the Minister what the Conservative party manifesto said on the matter in 2015. It stated that
“we will stop children’s exposure to harmful sexualised content online, by requiring age verification for access to all sites containing pornographic material”.
There is no prevarication or equivocation there, and I commend the wording in the manifesto. Unfortunately, between that time and the legislation being drawing up, a rogue adjective has been added to the commitment, which seemed perfectly clear in the manifesto. One could easily argue that if a site such as Tumblr does not make pornography available on a commercial basis, then it is exempt, which would leave that manifesto commitment in some difficulty. Can we therefore have a commitment from the Minister that the regulator will be able to go after all sites containing pornographic material and not just those operating on a commercial basis, however broadly we may want to define “commercial”? The word seems at best unnecessary, and at worst a breach of the manifesto commitment.
Slotting age verification into the Bill gives Members nothing like the scope needed to tackle the effect of under-age viewing of pornography, which is surely the intention behind its implementation, because the measure is not enough to protect children. For a start, the regulator should also be responsible for ensuring that services undertake self-audits and collect mandatory reports in relation to child abuse images, online grooming and malicious communication involving children. To ensure that services are working to consistent principles and to best support the collection and utilisation of data, the regulator should also be responsible for developing a definition of child abuse.
We need to improve reporting online. Children and young people are ill served by the currently inadequate and unreliable reporting systems when they experience online abuse. Reporting groups need to be standardised, visible, responsive and act rapidly to address issues. Every reporting group must be designed in ways children say they can and will use. The NSPCC found that 26% of children and young people who used the report button saw no action whatever taken in response to their complaint; and of those who did get a response, 16% were dissatisfied with it. The Government should include independent mediation and monitoring of responses to complaints.
Clearly, we need compulsory sex education in our schools. Compulsory age-appropriate lessons about healthy relationships and sex are vital to keeping children safe on and offline. We know that children are exposed to pornography, sometimes in an extreme or violent form. Alongside regulation to limit access to these materials, building resilience and instilling an early understanding of healthy relationships can help to mitigate the impact of that exposure.
On that point, we are incredibly keen to ensure that legislation is as clear as possible and that any potential loopholes are closed. One such loophole is clause 15(5)(a), which for reasons that are unclear excludes on-demand programme services. Explicitly excluding any on-demand programme service available on the internet in the Bill—although we are aware that they are regulated by Ofcom—risks on-demand programme services being subject to a much looser age verification requirement than the Bill would enforce on other pornography providers. We do not believe that the legislation intends to create two standards of age verification requirements for online content, regardless of whether it is separately regulated. The amendment is intended to close that loophole.
Claire Perry
I will speak to amendments 85 and 87. I raised a question with David Austin last week about the regulation of video on demand. He confirmed that the intention of the Bill as it stands is to maintain the regulation of UK video on demand with Ofcom under the Communications Act 2003. That seems totally reasonable to me because Ofcom has done a good job. I think the issue is that the framework only requires age verification for R18 material.
I am not trying to give everyone a lesson—by the way, this is why we are so grateful to the BBFC; it gives very clear definitions of the material—but R18 is effectively hardcore porn. It contains restricted scenes that we would all consider to be pornography. Since 2010, the 18-certificate guidelines permit the depiction of explicit sex in exceptional justifying circumstances, so it is perfectly feasible for children to view 18-rated content that we would all consider to be pornographic. I fully agree with the sentiment behind amendments 85 and 87 to provide a level playing field for all online media, but we must ensure that all R18 and 18 content accessed through video-on-demand services is included in the provisions. However, removing clauses 15(5)(a) and 16(6) would cause a fair amount of confusion, as video-on-demand services would be regulated by Ofcom for the majority of the time but for age verification matters would be regulated by the BBFC and Ofcom, which raises the question of who has precedence and how enforcement would work.
I have therefore tabled new clause 7, which would meet the same objective in a slightly different way by amending the current regulatory framework for video on demand to ensure that children are protected from 18-rated as well as R18-rated on-demand material. The relevant section of the Communications Act 2003, section 368E, was amended by the Audiovisual Media Services Regulations 2014 to specify that R18 material should be subject to age verification to protect children. It is not a big step to require 18-rated pornographic material, which is the subject of much of this part of the Bill, to be included within the scope of that section. That would effectively create a legal level playing field. It would remove the issue of parity and precedence and would give us parity on the fundamental issue of the protection of children.
I agree with much of what the hon. Member for Sheffield, Heeley said. Ofcom’s latest figures on children and the media show that 51% of 12 to 15-year-olds watched on-demand services in 2015. The viewing of paid for on-demand content has gone up and accounts for 20% of viewing time for young people aged 16 to 24. They can view content rated 18 or R18 that would be prohibited for some of them if they were to purchase it in the offline world. With new clause 7, I recommend that the Government should try to ensure parity between the online and offline worlds. This Bill is a brilliant way to ensure that there is parity in the way that pornographic content is accessed.
Kevin Brennan
On the point that my hon. Friend the Member for Sheffield, Heeley made about the wording of the clause and how it talks about material that is made available “on a commercial basis”, does the hon. Member for Devizes have any concerns that that might be a definitional problem that could create a loophole?
Claire Perry
The hon. Gentleman raises a challenge. The explanatory notes make it clear that the Government intend to capture both commercial and freely provided material, which gets to the root of his concern. If someone is benefiting from the viewing of such material, the Government intend to capture that within the definition. I commend both the Minister and his Department for asking the BBFC to take on the role of regulator, because I have a high level of faith in its ability to do just that.
Kevin Brennan
I take the hon. Lady’s point that the Government have said that they would like to capture such material, but my hon. Friend the Member for Sheffield, Heeley said that they might not capture everything. We tabled a probing amendment to take out the words “on a commercial basis” to test that, but it was ruled out of scope because the Bill is about the digital economy. So it has to be material that is made available on a commercial basis only, otherwise it is out of the scope of the Bill.
Claire Perry
The hon. Gentleman is splitting hairs. The Government have issued clear guidance that the definition of “commercial” includes free content. There are very few altruistic providers of this material. Free content tends to be provided as a taster for commercial sites.
Claire Perry
Well, I accept that is true of streaming and on-demand, which is why this provision is important. It would capture material that is rated 18, not just restricted-18, and put it on a level playing field with restricted-18 material. The on-demand video content that the hon. Member for Sheffield, Heeley mentioned would be covered by the changes. I am interested to hear the Minister’s response to my proposed new clause 7, which would support parity of both content and regulator.
Ordered, That the debate be now adjourned.—(Graham Stuart.)
Digital Economy Bill (Sixth sitting)
Thursday 20th October 2016
(7 years, 6 months ago)
Public Bill CommitteesRead Full debate Digital Economy Act 2017 View all Digital Economy Act 2017 Debates Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 20 October 2016 - (20 Oct 2016)
The Committee divided: - Ayes: 7 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 10 / Noes: 7 - Question accordingly agreed to.
The Chair
I remind the Committee that with this we are discussing the following:
Amendment 87, in clause 15, page 18, line 25, leave out subsection 6.
New clause 7—On-demand programme services: requirement to prevent persons under the age of 18 accessing pornographic material with an 18 classification certificate—
“Section 368E of the Communication Act 2003 (harmful material) is amended as follows—
(a) in subsection (5)—
(i) after subsection (a) insert—
“(aa) a video work in respect of which the video works authority has issued an 18 classification certificate, and that it is reasonable to assume from its nature was produced solely or principally for the purposes of sexual arousal,”;
(ii) after subsection (b) insert—
“(ba) material that was included in a video work to which paragraph (aa) applies, if it is reasonable to assume from the nature of the material—
(i) that it was produced solely or principally for the purposes of sexual arousal, and
(ii) that its inclusion was among the reasons why the certificate was an 18 certificate,
“(bb) any other material if it is reasonable to assume from its nature—
(i) that it was produced solely or principally for the purposes of sexual arousal, and
(ii) that any classification certificate issued for a video work including it would be an 18 certificate.”
(b) in subsection (7) after “section” insert—
““18 certificate” means a classification certificate which—
(a) contains, pursuant to section 7(2)(b) of the Video Recordings Act 1984, a statement that the video work is suitable for viewing only by persons who have attained the age of 18 and that no video recording containing that work is to be supplied to any person who has not attained that age, and
(b) does not contain the statement mentioned in section 7(2)(c) of that Act that no video recording containing the video work is to be supplied other than in a licensed sex shop;””
This new clause requires the extension of measures for UK-based video on-demand programming to protect children from 18 material as well as R18 material.
Thangam Debbonaire (Bristol West) (Lab)
First, I thank my hon. Friend the Member for Sheffield, Heeley for making such a clear and cogent argument for why the Bill needs further amendment. As I think she said—I am sure that she will correct me if I am wrong—we want to ensure that the Government stick to their manifesto commitment to protect children from all forms of online pornography. That will take consistency and a depth of modesty about the extent of our various levels of knowledge about how the internet works.
The hon. Member for Devizes made a good speech, and I am grateful to her for making the argument about on-demand films, as my hon. Friend the Member for Sheffield, Heeley also did, but the hon. Lady said—please correct me if I am wrong—that there were not many providers of free online pornography. I must respectfully disagree. Given the existence of peer-to-peer sharing and other forms of availability—my hon. Friend mentioned Tumblr and other social media websites—I am afraid that it is incredibly easy, as my nephews and nieces have confirmed, sadly, for a young person to access free online pornographic content in ways that most of us here might not even understand.
Claire Perry (Devizes) (Con)
I am happy to clarify. My focus was on the Government’s intention to capture free and commercial pornography. The hon. Lady is absolutely right that there is a plethora of free stuff out there, and she is right to focus on the harm that it causes.
Thangam Debbonaire
I thank the hon. Lady for that clarification. I understand from an intervention made by my hon. Friend the Member for Cardiff West that the reason why we were not allowed to remove the words “on a commercial basis” was that they were deemed out of scope. As I understand it, the word “economy”, if we stick to the letter of it, includes transactions for which there is no financial payment. There are transactions involved, and the word “digital” is in the title of the Bill, so I think it unfortunate that the amendment was not agreed to. Taking out the words “on a commercial basis” would have done a great deal to make consistent across all platforms and all forms of pornographic content available online the restrictions that we are placing on commercial ones.
I support the amendments proposed by my hon. Friend to the wording of clause 15(5)(a) and (6), for reasons that have already been given, and I want to add to the arguments. Hon. Friends and Members may have read the evidence from Girlguiding. As a former Guide, I pay tribute to the movement for the excellent work that it has done. It has contributed a profound and well-evidenced understanding of what young women are saying about online pornography. I will pick out a couple of statistics, because they make arguments to which I will refer in interventions on later clauses. That will make my speeches less long.
In the 2016 girls’ attitudes survey, half of the girls said that sexism is worse online than offline. In the 2014 survey, 66%, or two thirds, of young women said that they often or sometimes see or experience sexism online. It is a place where young women routinely experience sexism, and part of that sexism is the ubiquity of pornography. In 2015, the survey found that 60% of girls aged 11 to 21 see boys their age—admittedly, some of those are over the age of 18, but they are still the girls’ peers—viewing pornography on mobile devices or tablets. In contrast, only 27% of girls say that they see girls their age viewing pornography. The majority of those young women say from their experience that children can access too much content online and that it should be for adults only. In the survey, we see a certain degree of concord among young women in the Girlguiding movement, Opposition Members and the Government manifesto, which pledged, as my hon. Friend said, to exclude children from all forms of online pornography.
The 2015 Girlguiding survey also found that those young women felt that pornography was encouraging sexist stereotyping and harmful views, and that the proliferation of pornography is having a negative effect on women in society more generally. Those young women are the next generation of adults.
I have worked with young men who have already abused their partners. In my former job working with domestic violence perpetrators, I worked with young men of all ages; for the men my age, their pornography had come from the top shelf of a newsagent, but the younger men knew about forms of pornography that those of us of a certain age had no understanding of whatever. They were using pornography in ways that directly contribute to the abuse of women and girls, including pornography that is filmed abuse. I shall come back to that point later, but we need to recognise that young men are getting their messages about what sex and intimacy are from online pornography. If we do not protect them from online pornography under the age of 18, we are basically saying that there are no holds barred.
The hon. Member for Devizes and my hon. Friend the Member for Sheffield, Heeley mentioned loopholes. When we leave loopholes, it creates a colander or sieve for regulation. Yes, the internet is evolving and, yes, we in this Committee Room probably do not know every single way in which it already provides pornography, and certainly not how it will in future, but that is a good reason to provide a strong regulatory framework when we have the chance. We have that chance now, and we should take it. If it remains the case that removing the words “on a commercial basis” is deemed outside our scope, which I find very sad—I think it is a missed opportunity, and I hope the House can return to it at some point and regulate the free content—we must definitely ensure that we are putting everything else that we possibly can on a level playing field. That means that the regulation of video on demand has to be consistent and that we have to close any other loophole we can spot over the next few days.
I hope Opposition amendments will make the Government think about the manifesto commitment they rightly made—I am happy to put on the record that I support it—and take the opportunity to stick to it. Young women want that; young men need it, because my experience of working with young men who have abused their partners and ex-partners is that they felt that they were getting those messages from pornography; and we as a society cannot afford to ignore this problem any longer. We have a chance to do something about it, so let us take that opportunity.
The Minister for Digital and Culture (Matt Hancock)
It is great to hear that outbreak of support for the Conservative party manifesto.
Thangam Debbonaire
I must have it clearly on the record that I supported that commitment only: not the whole Conservative manifesto, just the bit that says “We want to protect all children from all online pornography.”
Matt Hancock
I am sure our powers of persuasion will extend that support in the future. The outbreak of support for our manifesto is welcome; this is an incredibly important area, and I am proud to lead the Front-Bench effort to deal with underage people’s access to adult material by introducing age verification. I want to respond in detail to the points made, because it is important we get this right.
Before I come to the specific amendments, I will deal with commercial providers. The measures in the Bill will apply equally to all commercial providers, whether their material is paid for directly or appears on free sites that operate on a different business model. “Commercial” has quite a broad meaning, as my hon. Friend the Member for Devizes said. If a provider makes money from a site in any way, whether or not it makes a profit, it can be caught by the legislation. That is the right distinction, because it targets those who make money and are indifferent to the harm their activities may cause to children.
Matt Hancock
If the hon. Lady will hold on, I want to explain this in full, rather than in part, before I give way. The age verification regulator must publish guidance on the circumstances in which it will regard a site or app as commercial. It will be for the regulator to judge whether a site is commercial, and there is no definition that states which website platforms are covered. Crucially, the regulator will also be able to take a view if specific social media and other types of sites are ancillary service providers—a person who appears to be facilitating or enabling the making available of pornographic material by non-compliant persons. I think that the capturing of others as ancillary service providers is an important part of making sure that we fully deliver our manifesto commitment, as I believe this Bill does.
Louise Haigh
We are aware that “commercial” is not limited to sites that require payment. It includes online advertising and other business models, as the Minister has said. However, it is unclear how the regulator will be able to enforce these measures given that the only enforcement available to them is notifying other payment service providers and ancillary services.
Matt Hancock
No doubt we will come on to enforcement. A number of clauses and amendments are on enforcement. The point is that other social media sites can be classified by the regulator as ancillary service providers for facilitating or enabling the making of available pornographic material. Our view is that enforcement through disrupting business models is more powerful because you are undermining the business model of the provider. However, I do not want to get too distracted, in an out of order way, into enforcement which is rightly dealt with in later clauses.
Louise Haigh
If the Bill is clearly designed to enable the regulator to focus on social media sites and other ancillary service providers, why was that term “on a commercial basis” included in these sections?
Matt Hancock
The principle is that there is a distinction between those who are making money by targeting and are indifferent to potential harm and those whose services facilitate the provision of porn to those who are under age. I think it is a reasonable distinction. We are trying to deal with the mass of the problem. By its nature, it is very difficult to get to 100%. I think that leaving the Bill in this way, with flexibility for the regulator to act, has a big advantage over being overly prescriptive in primary legislation and too specific about the way in which the regulator acts, not least because disrupting the business model is the goal of trying to provide enforcement.
Claire Perry
I support the Minister’s point about over-prescription, but perhaps he could help me by talking about a particular case. Let us take Tumblr hosting a stream of content which is 18. Who would the regulator target if it issued an enforcement notice? Would it be the content provider, or would it be the social media platform that is hosting that content?
Matt Hancock
In that case, the platform—I do not want to get into individual platforms, but I am happy to take my hon. Friend’s example—would likely be an ancillary service provider and therefore captured. This is a very important distinction. There is a difference between somebody who is actively putting up adult material and choosing not to have age verification, and a platform where others put up adult material, where it is not necessarily impossible but much harder to have a control over the material. There is an important distinction here. If we try to pretend that everybody putting material onto a platform, for example, the one that my hon. Friend mentions, should be treated the same way as a porn-providing website, we will be led into very dangerous territory and it makes it harder to police this rather than easier. That is my argument.
On the specific amendments, I understand entirely where the argument on demand is coming from. I want to give an assurance which I hope will mean that these clauses will not be pushed to the vote. On-demand audio-visual media services under UK jurisdiction are excluded from part 3 of the Bill because they are regulated by Ofcom under part 4A of the Communications Act 2003. As my hon. Friend the Member for Devizes said, other on-demand services that are not currently regulated in the UK will be caught by the Bill regime.
Thangam Debbonaire
Forgive me, but the Minister just gave a lot of information, and I want to clarify something. Whichever regulator is doing it, will the effect of the legislation as he would like to see it put R18 films and 18-rated films on on-demand services at the same level of age verification? I am not clear on that point.
Matt Hancock
The aim is that even though the regulator may be different in those two cases, the result would be the same. I can give the hon. Lady that assurance. The Bill will do that without having double regulation. As we discussed earlier with regard to a different part of the Bill, having double regulation in the same area can lead to confusion and worse outcomes, rather than clarity and better outcomes.
A service that falls within part 4A of the Communications Act 2003—that is to say, one that is outwith the proposals —must not contain any specially restricted material, unless that material is made available in a manner that secures that persons under the age of 18 will not normally see or hear it. Specially restricted material includes R18 material and other material that might seriously impair the physical, mental or moral development of persons under the age of 18. Our intention is that such other material should include material that the BBFC would describe as 18 sex works. I think that answers precisely the point that the hon. Lady was making.
Kevin Brennan (Cardiff West) (Lab)
This is a genuine inquiry: did the Minister consider not having double regulation but awarding regulatory oversight of all this to a single regime, possibly the BBFC, thereby taking it away from Ofcom? If he considered that idea, why did he reject it?
Matt Hancock
Partly because the regulation of areas currently covered by Ofcom is considered to be working well, so I did not want to throw that regime up in the air. I did want to deal with the additions and make provisions additional to the existing regime.
Kevin Brennan
The Minister’s response prompts the question: if that is the case, why did he not give the responsibility to Ofcom?
Matt Hancock
Because I think the BBFC is best at making the very nuanced distinctions between different types of material and their regulation that are required. The way it has landed, with the two regulators sitting side by side, but with the aim that the result of the regulation is the same, is the better way of doing it.
Christian Matheson (City of Chester) (Lab)
May I seek clarification from the Minister? Is there scope for a mechanism whereby the two regulatory authorities can pass items between each other if one is better suited to judge an item that has been referred to the other?
Matt Hancock
There is clarity in the Bill about what is under the jurisdiction of one regulator and what is under the jurisdiction of the other. I will, though, take that away and seek to give an assurance that the two regulators will work together to ensure that that boundary is dealt with adequately. There is flexibility in the Bill to ensure that that can happen. I cannot speak for Ofcom or the BBFC, but it would seem to me to be perfectly reasonable and obvious that the boundary has to work properly. I would not like to over-specify that in the Bill because of the nature of changes in technology. The distinction between broadcast and on-demand services is changing as technology develops, and it is better to leave it structured as it is. I am sure that both regulators will have heard the hon. Gentleman’s important point that the boundary between the two needs to be dealt with appropriately and that they need to talk to each other.
Nigel Huddleston (Mid Worcestershire) (Con)
Is the Minister reassured, as I am, by the fact that in the evidence sessions there was enthusiastic support from the BBFC for embracing the role, as well as very clear guidance that it had the competence to do so? We have not necessarily heard that from anybody else. The support and enthusiasm for taking on that role is very telling.
Matt Hancock
My hon. Friend has just given the final paragraph of my speech. With those assurances and the broad support from the BBFC and its enthusiasm to tackle the need for age verification in that way, I hope that the hon. Member for Sheffield, Heeley will withdraw the amendment.
Louise Haigh
Quite a lot of clarification is needed, and I hope it will come during the Bill’s passage. I do not think that the distinction between Ofcom and the BBFC is clear in this part of the Bill or in later clauses on enforcement. However, given that it states elsewhere in the Bill that the proposal is subject to further parliamentary scrutiny, and as the BBFC has not yet officially been given the regulator role—as far as I am aware—I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Claire Perry
I beg to move amendment 66, in clause 15, page 18, line 24, at end insert
“or an internet service provider.”.
This amendment and amendment 67 ensure that the requirement to implement age verification does not fall on ISPs but commercial sites or applications offering pornographic material; and defines internet service providers.
The Chair
With this it will be convenient to discuss the following:
Amendment 90, in clause 22, page 23, line 29, leave out
“or ancillary service provider”
and insert
“, ancillary service provider, or internet service provider.”.
Amendment 77, in clause 22, page 24, line 23, at end insert “or
(c) an internet service provider.”.
This amendment and amendment 78 ensure that the definition of an ancillary service provider would include ISPs; and defines internet service providers.
Amendment 91, in clause 22, page 24, line 23, at end insert—
“(6A) In this section an “ancillary service provider” includes, but is not limited to, domain name registrars, social media platforms, internet service providers, and search engines.”.
Amendment 67, in clause 25, page 26, line 2, at end insert—
““internet service provider” has the same meaning as in section 124N of the Communications Act 2003 (interpretation);”.
See the explanatory statement for amendment 66.
New clause 8—Duty to provide a service that excludes adult-only content—
“(1) This section applies to internet service providers who supply an internet access service to subscribers.
(2) For the purposes of subsection (1), “subscribers” includes—
(a) domestic subscribers;
(b) schools; and
(c) organisations that allow a person to use an internet access service in a public place.
For the purposes of the conditions in subsections (3) and (4), if the subscriber is a school or organisation a responsible person within the school or organisation shall be regarded as the subscriber.
(3) A provider to whom subsection (1) applies must provide to subscribers an internet access service which excludes adult-only content unless all of the conditions listed in subsection (4) have been fulfilled.
(4) The conditions are—
(a) the subscriber “opts in” to subscribe to a service that includes online adult-only content;
(b) the subscriber is aged 18 or over; and
(c) the provider of the service has an age verification scheme which meets the standards set out by OFCOM in subsection (4) and which has been used to confirm that the subscriber is aged 18 or over before a user is able to access adult-only content.
(5) It shall be the duty of OFCOM, to set, and from time to time to review and revise, standards for the—
(a) filtering of adult content in line with the standards set out in Section 319 of the Communications Act 2003;
(b) age verification policies to be used under subsection (4) before an user is able to access adult content; and
(c) filtering of content by age or subject category by providers of internet access services.
(6) The standards set out by OFCOM under subsection (5) must be contained in one of more codes.
(7) Before setting standards under subsection (5), OFCOM must publish, in such a manner as they think fit, a draft of the proposed code containing those standards.
(8) After publishing the draft code and before setting the standards, OFCOM must consult relevant persons and organisations.
(9) It shall be the duty of OFCOM to establish procedures for the handling and resolution of complaints in a timely manner about the observance of standards set under subsection (5), including complaints about incorrect filtering of content.
(10) OFCOM may designate any body corporate to carry out its duties under this section in whole or in part.
(11) OFCOM may not designate a body under subsection (10) unless, as respects that designation, they are satisfied that the body—
(a) is a fit and proper body to be designated;
(b) has consented to being designated;
(c) has access to financial resources that are adequate to ensure the effective performance of its functions under this section; and
(d) is sufficiently independent of providers of internet access services.
(12) It shall be a defence to any claims, whether civil or criminal, for a provider to whom subsection (1) applies to prove that at the relevant time they were—
(a) following the standards and code set out in subsection (5),; and
(b) acting in good faith.
(13) Nothing in this section prevents any providers to whom subsection (1) applies from providing additional levels of filtering of content.
(14) In this section—
“adult-only content” means material that contains offensive and harmful material from which persons under the age of 18 are protected;
“age verification scheme” is a scheme to establish the age of the subscriber;
“internet access service” and “internet service provider” have the same meaning as in section 124N of the Communications Act 2003 (interpretation);
“material from which persons under the age of 18 are protected” means material specified in the OFCOM standards under section 2;
“OFCOM” has the same meaning as in Part 1 of the Communications Act 2003;
“offensive and harmful material” has the same meaning as in section 3 of the Communications Act 2003 (general duties of OFCOM); and
“subscriber” means a person who receives the service under an agreement between the person and the provider of the service.”.
This new clause places a statutory requirement on internet service providers to limit access to adult content by persons under 18. It would give Ofcom a role in determining the age verification scheme and how material should be filtered. It would ensure that ISPs were able to continue providing family friendly filtering once the net neutrality rules come into force in December 2016.
New clause 11—Power to make regulations about blocking injunctions preventing access to locations on the internet—
“(1) The Secretary of State may by regulations make provision about the granting by a court of a blocking injunction in respect of a location on the internet which the court is satisfied has been, is being or is likely to be used for or in connection with an activity that is contravening, or has contravened, section 15(1) of this Act.
(2) “Blocking injunction” means an injunction that requires an internet service provider to prevent its service being used to gain access to a location on the internet.
(3) Regulations introduced under subsection (1) above may, in particular—
(a) make provision about the type of locations against which a blocking injunction should be granted;
(b) make provision about the circumstances in which an application can be made for a blocking injunction;
(c) outline the type of circumstances in which the court will grant a blocking injunction;
(d) specify the type of evidence, and other factors, which the court must take into account in determining whether or not to grant a blocking injunction;
(e) make provision about the notice, and type of notice, including the form and means, by which a person must receive notice of an application for a blocking injunction made against them; and
(f) make provision about any other such matters as the Secretary of State considers are necessary in relation to the granting of a blocking injunction by the court.
(4) Regulations under this subsection must be made by statutory instrument.
(5) 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.
(6) In this Part— “Internet service provider” has the same meaning as in section 16 of the Digital Economy Act 2010. In the application of this Part to Scotland “injunction” means interdict.”.
This new Clause empowers the Secretary of State to introduce regulations in relation to the granting of a backstop blocking injunction by a court. The injunction would require an internet service provider to prevent access to a site or sites which do not comply with the age-verification requirements. This would only be used where the other enforcement powers (principally fines) had not been effective in ensuring that sites put in place effective age-verification.
Claire Perry
I welcome the Minister’s previous comments, which gave me some real assurances on the parity of content and regulator. I also reassure him of how popular he will be when the Bill finally passes—the Centre for Gender Equal Media said that, in its most recent survey, 86% of people support a legal requirement on companies to prevent children’s access to pornography. We are moving in the right direction.
Amendment 66 seeks to pick through slightly more carefully who is responsible and is captured by the Bill’s language. There are four internet service providers in the UK through which the majority of broadband internet traffic travels, and they have come a long way. Five years ago, they accepted none of our proposals, be it single click protection for all devices in the home or the implementation of a filtering system that required selection—we could not select whether or not the filters were on. They have gone from that to the position now whereby, in some cases, we have ISPs that provide their services with the filters already on as default—something that we were told was absolutely unimaginable. With that regime, the level of complaints is very low and the level of satisfaction is very high.
Amendment 67 is consequential on amendment 66 and both seek to clarify the scope of who exactly would be covered under the wording of clause 15(1), which states:
“A person must not make pornographic material available on the internet on a commercial basis to persons in the United Kingdom except in a way that secures that, at any given time, the material is not normally accessible by persons under the age of 18.”
The Government have made it quite clear in the consultation, and the Minister clarified in his previous remarks, that the proposals apply to companies running websites aimed specifically at providing pornographic content for commercial gain, and that they want those who profit from such material being made available online to act in a legal, socially responsible way. It could be argued that ISPs both profit from the material being made available online and also make pornographic material available online, even though they are not the original source of the material. We also heard from the Minister that he is minded to consider social media platforms in that same category. In my view, the regulator must also publish guidance under clause 15(3) about
“circumstances in which the regulator will treat an internet site or other means of accessing the internet as operated or provided on a commercial basis”.
It is my concern that that could also be read as applying to ISPs. The amendments are intended to clarify that. In fact, I can quote from an article from July, which said:
“Internet access providers are likely to feel left in an uncertain position at the moment as, while the Bill does not reference them in this context, the definition of ‘makes pornographic material available’ could be argued as incorporating companies which provide connectivity to servers used for the making available of pornographic material”,
and piping that material into the home.
Paragraph 22 of the explanatory notes makes reference to “commercial providers of pornography”, and that obviously appears to place the onus of this suite of measures firmly on the content providers, but an optimal approach would be to improve the drafting to make the legislative attempt clear. I know we will have further discussions about the role of ISPs, but ISPs have done what we have asked them to do in introducing family friendly filters.
Kevin Brennan
I am trying to understand why the hon. Lady believes that ISPs should not have this responsibility.
Claire Perry
Because various other aspects of the Bill capture ISPs. My concern is that the Bill focuses on the commercial content providers where they are. The amendment is intended to probe the Government about how they are thinking about ISPs vis-à-vis commercial content providers in the drafting of the clause.
Louise Haigh
Our amendments are designed to enable the regulator to ask the internet service provider to block offending sites. This goes back to the point we made earlier on the differences between sites operated “on a commercial basis” and social media sites and ancillary sites. The proposals as they stand do not give the regulator sufficient powers to enforce the mechanisms proposed in the Bill.
Broadening the definition of “ancillary service provider” specifically to include internet service providers would require the regulator to notify them of non-compliant sites. That will put ISPs in the same bracket as payment service providers, which will be required to withdraw their services if other measures have been exhausted. In the case of ISPs, they would be required to block offending sites.
The amendments would create a simple backstop power where enforcement through the Government’s proposals had not achieved its intended objective and commercial providers had not withdrawn their services, either because the fine does not act as a deterrent or because, due to their international status, they do not need to comply. If pornography providers continued to provide content without age verification restrictions, the regulator would then have the power to require ISPs to take down the content.
We believe that, without amendment, the proposals will not achieve the Bill’s aim, as non-compliant pornographers would not be absolutely assured of payment services being blocked. First, the proposals do not send anywhere near a strong enough signal to the porn industry that the Government are serious about the proposals and their enforcement. Giving the regulator the power but not the stick suggests that we are not all that bothered about whether sites comply. Secondly, we can have no reassurance that sites will be shut down within any kind of timeframe if there is non-compliance. As drafted in the explanatory notes, “on an ongoing basis” could mean yearly, biannually or monthly, but it makes a mockery of the proposals if sites could be non-compliant for two years or more before payment services may or may not act. That does not provide much of an incentive to the industry to act.
Throughout the evidence sessions we heard that there are significant difficulties with the workability of this entire part of the Bill. For instance, many sites will hide their contact details, and a substantial number will simply not respond to financial penalties. Indeed, an ability already exists in law for ISPs to be compelled to block images that portray, for example, child sex abuse. There is also an ability to block in the case of copyright infringement. It therefore seems eminently reasonable that in the event of non-compliance, the regulator has a clear backstop power. We believe that even just legislating for such a power will help speed up enforcement. If providers know that they cannot simply circumvent the law by refusing to comply with notices, they will comply more efficiently. That will surely help the age verifier to pass the real-world test, which is integral to the Bill’s objectives.
Thangam Debbonaire
I am a little puzzled as to what the hon. Member for Devizes has against requiring ISPs to block porn sites. As my hon. Friend the Member for Sheffield, Heeley said, they are already required to block other sites. If we require ISPs to block sites that offend copyright laws, I really do not understand the problem with requiring them to block sites that provide pornography to children.
Claire Perry
On a point of order, Mr Stringer. Perhaps this shows my ignorance of doing Committees from the Back Benches, but I intended to go on in my speech to discuss new clause 8, which I have tabled and which defines more clearly what I expect internet service providers to do. Would it be in order for me to deliver those remarks, or have I lost my opportunity?
The Chair
Let me be clear: we are considering amendment 66 to clause 15, amendments 90, 77, 91 and 67, and new clauses 8 and 11. Members can speak more than once in Committee if they wish to. The hon. Lady has the right to discuss her new clause.
Claire Perry
May I please rise again, then? Apologies to the Committee—[Interruption.] I am so sorry; the hon. Member for Bristol West was speaking.
Thangam Debbonaire
I defer to the hon. Lady. She mentioned something she is going to say in due course; I look forward to hearing it. Nevertheless, I stand by my comments. We need to be clear about whether we are going to fail to require ISPs to do something that we already require them to do for copyright infringement and other forms of pornography involving children. I fail to see what the problem is. Having a blocking injunction available to the regulator would give them another tool to achieve the aim that we have all agreed we subscribe to, which is being able to block pornography from being seen by children and young people.
Claire Perry
Mr Stringer, I assume that, like me, you sometimes have the feeling that you have sat down before you have finished what you are saying. I apologise to the Committee. I am rarely short of words, but in this case I was.
I want to respond to the point made by the hon. Member for Bristol West and clarify exactly what we have asked and should be asking internet service providers to do. In doing so, I shall refer to the new EU net neutrality regulations, which, despite the Brexit vote, are due to come into force in December. They cause many of us concerns about the regime that our British internet service providers have put in place, which I believe leads the world—or, at least, the democratic free world; other countries are more draconian—in helping families to make these choices. We do not want all that good work to be unravelled.
Our current regime falls foul of the regime that the European Union is promoting, and unless the Government make a decision or at least give us some indication relatively quickly that they will not listen to that, we may have an issue in that all the progress that we have made may run out by December 2016. I would be grateful if the Minister told us what the Government are doing to get the new legislation on the statute book in line with the schedule set out by his colleague Baroness Shields last December.
We have an effective voluntarily filtering arrangement. I believe—I think that this point is in the scope of ancillary service providers—that we intend to capture internet service providers as part of the general suite of those responsible for implementing over-18 verification, but I want the Government to make crystal clear that they are aware of the responsibilities of internet service providers and intend for the regulator to include them in the basket of those that they will investigate and regulate.
The big missing link in all this has been getting content providers that provide material deemed to be pornographic to do anything with that material. The difference is that content providers of, say, gambling sites have always been required to have age-verification machinery sitting on their sites.
The hon. Member for Bristol West is quite right that we want ISPs to be captured under this regulatory regime, but I am keen to hear from the Minister that all the work that we have done with ISPs that have voluntarily done the socially and morally responsible thing and brought forward family-friendly filters will not be undone by December 2016, when the EU net neutrality regulations are intended to come into place.
Matt Hancock
Quite a lot of points have been raised, and I seek to address them all. Clause 22 is an important provision containing the powers at the heart of the new regime to enable the age-verification regulator to notify payment service providers and ancillary service providers that a person using their services is providing pornographic material in contravention of clause 15 or making prohibited material available on the internet to persons in the UK.
Amendments 66, 67, 77, 78, 90 and 91 would provide that the requirement to implement age verification does not fall on ISPs and further clarify that ISPs are to be considered ancillary service providers. Amendment 91 would clarify that as well as ISPs, domain name registrars, social media platforms and search engines are all to be considered ancillary service providers for the purposes of clause 22, which makes provision for the meaning of “ancillary service provider”.
This is a fast-moving area, and the BBFC, in its role as regulator, will be able to publish guidelines for the circumstances in which it will treat services provided in the course of business as either enabling or facilitating, as we discussed earlier. Although it will be for the regulator to consider on a case-by-case basis who is an ancillary service provider, it would be surprising if ISPs were not designated as ancillary service providers.
New clause 8 would impose a duty on internet service providers to provide a service that excludes adult-only content unless certain conditions are met. As I understand it, that measure is intended to protect the position of parental filters under net neutrality. However, it is our clear position that parental filters, where they can be turned off by the end user—that is, where they are a matter of user choice—are allowed under the EU regulation. We believe that the current arrangements are working well. They are based on a self-regulatory partnership and they are allowed under the forthcoming EU open internet access regulations.
Claire Perry
I think I understand the Minister to be saying that in cases where companies have introduced filters that are on by default, the fact that the users can choose to turn those filters off in the home means that they would not be captured by the net neutrality rules. Is that correct?
Matt Hancock
That is exactly what I am saying. On that basis, with the Government’s position having been put clearly on the record, I hope that my hon. Friend will not press new clause 8 to a vote.
New clause 11 would empower the Secretary of State to introduce regulations in relation to backstop blocking injunctions. We have looked carefully at the option of blocking by ISPs and have talked to a lot of stakeholders about it. We take the problem seriously, and we think our measures will make a real difference. We are yet to be persuaded that blocking infringing sites would be proportionate, because it would not be consistent with how other harmful or illegal content is dealt with. There is also a question of practicality: porn companies would be able to circumvent blocking relatively quickly by changing URLs, and there is an additional risk that a significant number of sites that contain legal content would be blocked. We would need to be convinced that the benefits of ISP blocking would not be outweighed by the risks.
Louise Haigh
I am a little confused about how the Minister envisages the provisions being enforced against the free sites we discussed in the previous group of amendments without that additional power, which indeed has been requested by the regulator that the Government have designated.
Matt Hancock
As the regulator said, the proposals here mark a huge step forward in tackling the problem. We have to make a balanced judgment: there is a balance to be struck between the extra powers to block and the need to ensure that they are proportionate. The powers are not a silver bullet; sites that were actively trying to avoid the Bill’s other enforcement measures would also be able to actively avoid these measures. It is questionable how much additional enforcement power they would bring, given those downsides.
Thangam Debbonaire
I must press the Minister to consider that children’s charities have told us that this is one of the most important amendments to the Bill. The Minister says that porn sites could simply move their URLs, but that is not a reason not to take a stand by giving the regulator the power that it has asked for and that children’s charities have particularly asked for.
Matt Hancock
Children’s charities and the regulator have asked for action to solve the problem of needing age verification. That is what the Bill delivers. The question of how to enforce that is incredibly important; there are different considerations to be made, and I think the Bill has ended up with the correct balance.
Louise Haigh
The BBFC witness explicitly said last week that
“we suggested, in our submission of evidence to the consultation back in the spring, that ISP blocking ought to be part of the regulator’s arsenal.”––[Official Report, Digital Economy Public Bill Committee, 11 October 2016; c. 41, Q91.]
The BBFC says that notification of payment providers or ancillary services providers and fines may not be sufficient. I appreciate that porn sites might well use different URLs to evade it, but why has the Minister explicitly removed ISP blocking as a further backstop power? We are not talking about blocking too many sites; we have been very clear that it is intended as a backstop power when other measures fail.
Matt Hancock
David Austin of the BBFC said:
“We see this Bill as a significant step forward in terms of child protection.”––[Official Report, Digital Economy Public Bill Committee, 11 October 2016; c. 42, Q94.]
We think, on balance, that the regulator will have enough powers—for example, through the provisions on ancillary service providers—to take effective action against non-compliant sites. For that reason, I think this is the appropriate balance and I ask my hon. Friend the Member for Devizes to withdraw her amendment.
Claire Perry
I think that we are running through two definitions of ISPs: one relating to ancillary service providers and the other to enforcement and blocking. If we include ISPs in the definition of ancillary service providers, we want to make sure that they are captured, either explicitly or as a service provider. Is the Minister saying that he is comfortable with the enforcement regime without blocking? Would it require further legislation for blocking to be carried out if the regulator felt it was an appropriate measure? Are we ruling that out in this legislation?
The Chair
Order. The hon. Lady is making a speech. If the Minister wants to intervene, he may.
Claire Perry
I apologise. I would like to conclude my speech by inviting the Minister to respond.
Matt Hancock
I thank my hon. Friend for giving way. I would like to provide a point of clarity on the speech she has made. Treatment of an ASP will not lead to blocking. I think that is the answer to her question.
Claire Perry
I thank the Minister for that intervention. We will return to this subject in a series of amendments around clause 20. I want to thank the Minister for clarifying some of the murkiness around definitions in the Bill. I want to ask him and his team, though, to consider what his colleague had said, which goes back to the net neutrality point.
I accept what the Minister says about the spirit being absolutely clear, that our current filtering regime will not be captured, but Baroness Shields did say that we needed to legislate to make our filters regime legal. I did not hear from the Minister that that legislation is something that the Department is preparing or planning to introduce.
Louise Haigh
We very much share the hon. Lady’s concerns that the legislation has explicitly excluded the ability of internet service providers to block. We simply cannot understand why the Government have ruled out that final backstop power. We appreciate it is not perfect but it would give the regulator that final power. We will return to new clause 11 at the end of the Bill and be pushing it to a vote when we come to it.
Claire Perry
I thank the hon. Lady for making her intentions clear. I am prepared to withdraw or not push my new clause to a vote on the basis of what the Minister said, but I would love to get his assurances—perhaps he will write to me—to be crystal clear on the fact that he believes the Government do not have to legislate in order to push back on the net neutrality regime.
Kevin Brennan
Before the hon. Lady sits down, she did mention the view of Baroness Shields that there should be new legislation. Notwithstanding our remarks about the number of Government amendments, does the hon. Lady believe this Bill could be a useful vehicle to achieve that?
Claire Perry
Given the Brexit vote, I would be inclined to accept a letter from the Minister suggesting that we will absolutely resist any attempt to make EU net neutrality apply to what is a very fine, though not perfect, voluntary regime. On that basis, I accept the Minister’s assurances that that is what he intends to do. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 15 ordered to stand part of the Bill.
Clause 16 ordered to stand part of the Bill.
Clause 17
The age-verification regulator: designation and funding
Question proposed, That the clause stand part of the Bill.
Louise Haigh
In this and related clauses, we seek to strengthen the proposals that the Government have put forward. We have said that the regulation needs to be beefed up to require internet service providers to be notified about non-compliance. We would like to see an injunction power to take down any content which a court is satisfied is in breach of the age-verification legislation, as soon as possible, at the start of the four-tier regulation process the Government have identified in their amendments and letters published to the Committee last week.
That would require a regulator with sufficient enforcement expertise and the ability to apply that injunction and push enforcement at an early stage. As we are aware, however, the BBFC heads of agreement with the Government do not cover enforcement. Indeed, they made perfectly clear that they would not be prepared to enforce the legislation in clauses 20 and 21 as they stand, which is part 4 of that enforcement process, giving the power to issue fines. The BBFC is going to conduct phases 1, 2 and 3 of the notification requirements, presumably before handing over to a regulator with sufficient enforcement expertise, but that has not been made clear so far.
While we welcome the role of the BBFC and the expertise it clearly brings on classification, we question whether it is unnecessarily convoluted to require a separate regulator to take any enforcement action, which will effectively have been begun by the BBFC and which so far has not been mentioned in the legislation. This goes back to the point my hon. Friend the Member for Cardiff West made earlier about the two separate regimes for on-demand programme services.
As I understand it, although it is not clear, the BBFC will be taking on stage 3 of the regulation, meaning it will be involved in the first stage of enforcement—in notification. That is fine, but it will then have to hand over the second stage of enforcement to another regulator—presumably Ofcom. The enforcement process is already incredibly weak and this two-tiered approach involving two separate regulators risks further delays in enforcement against non-compliant providers who are to protect or take down material that is in breach of the law. In evidence to the Committee, the BBFC said:
“Our role is focused much more on notification. We think we can use the notification process and get some quite significant results.”—[Official Report, Digital Economy Public Bill Committee, 11 October 2016; c. 41, Q83.]
We do not doubt it, but confusion will arise when the BFFC identifies a clearly non-compliant site that is brazenly flouting the law, and it does not have power to enforce quickly but will have to hand it over.
We would also like to hear when the Government are planning to announce the regulator for the second stage and how they intend to work with the BBFC. As far as I can see, this will require further amendments to the Bill. If it is Ofcom, it would have been helpful to have heard its views on what further enforcement powers it would like to see in the Bill, rather than being asked to fill in after the Bill has passed through Parliament. There is a clear danger that the enforcement regulator could be asked to take over enforcement of age verification, which it thinks requires more teeth to be effective.
We therefore have very serious concerns about the process by which clause 17 will be have effect. Although we will not vote against the clause, we want to make it very clear that we would have preferred to have seen an official announcement about who will carry out the enforcement provisions in the Bill before being asked to vote on it.
Matt Hancock
The debate on clause stand part is about the set-up of the regulatory structure and making sure that we get designation and funding right. It is our intention that the new regulatory powers and the new regulator or co-regulators will deliver on this. As the hon. Lady says, the BBFC has signed up to be designated as the age verification regulator responding for identifying and notifying. This will enable the payment providers and other ancillary services to start to withdraw services to sites that do not comply as soon as possible.
Louise Haigh
In what kind of timeframe does the Minister envisage the payment service providers acting from notification from the BBFC?
Matt Hancock
We intend formally to designate the BBFC as regulator in autumn 2017 and expect to be in a position to commence the provisions requiring age verification within 12 months of Royal Assent.
Louise Haigh
That was not quite my question. How long does the Minister anticipate that ancillary service providers or payment service providers will take to act on receiving notification from the BBFC that a site is non-compliant?
Matt Hancock
I would expect that to happen immediately. The question of the designation of the backstop enforcement regulator does not stop or preclude the BBFC from getting going on this. As we have heard, it is already working to put in place its own internal systems. As I have just said to the Committee, we have a new commitment that we expect to commence the provisions in terms of getting the system up and running within 12 months of Royal Assent; after that, if the BBFC has designated that there is a problem, I would expect action to be immediate, because I expect the BBFC to ensure through good relations that systems are in place.
I see enforcement very much as a back-up to good behaviour. As we have seen with the taking down of child pornography and material related to terrorism, many providers and platforms respond rapidly when such material is identified. It will be far better if the system works without having to resort to enforcement. We will set out in due course who is best placed to be the regulator for enforcement, but the system is new, and the approach provides the level of flexibility that we need to get it right. I have every confidence in the BBFC’s ability and enthusiasm to deliver on these aims, so I commend the clause to the Committee.
Question put and agreed to.
Clause 17 accordingly ordered to stand part of the Bill.
Clauses 18 and 19 ordered to stand part of the Bill.
Clause 20
Enforcement of sections 15 and 19
Claire Perry
I beg to move amendment 68, in clause 20, page 21, line 5, at beginning insert
“If the person in contravention of section 15(1) is resident in the United Kingdom,”.
This amendment and amendments 69, 70, 71, 72, 73 and 74 place a requirement on the age-verification regulator to impose fines where a UK person has contravened clause 15(1) unless the contravention has ceased; or to issue an enforcement notice to person outside of the UK who has contravened clause 15(1).
The Chair
With this it will be convenient to discuss the following:
Amendment 69, in clause 20, page 21, line 5, leave out “may” and insert “must”.
See the explanatory statement for amendment 68.
Amendment 70, in clause 20, page 21, line 7, after “15(1)”, insert “, unless subsection (5) applies”.
See the explanatory statement for amendment 68.
Amendment 71, in clause 20, page 21, line 10, at beginning insert
“If the person in contravention of section 15(1) is not resident in the United Kingdom,”.
See the explanatory statement for amendment 68.
Amendment 72, in clause 20, page 21, line 10, leave out “may” and insert “must”.
See the explanatory statement for amendment 68.
Amendment 73, in clause 20, page 21, line 16, leave out subsection (4).
See the explanatory statement for amendment 68.
Amendment 74, in clause 20, page 21, line 42, leave out “may” and insert “must”.
See the explanatory statement for amendment 68.
Claire Perry
This is a series of consequential and investigatory amendments intended to probe the Minister’s thinking about what the regulator can actually do. At the moment, enforcement operates through a series of financial penalties, which we can discuss further when we debate clause 21, or of enforcement notices. We heard clearly last week from David Austin that the challenge is that almost none of the content-producing sites that we are discussing are based in the UK; in fact, I think he said that all the top 50 sites that the regulator will rightly target are based overseas.
The challenge is how the Government intend to carry out enforcement. I know that the BBFC’s current enforcement role is not carried out through its own designated powers; it is carried out through various other agencies, and the Bill makes further provision for financial penalties. I tabled the amendments to press the Minister on the point that it would be clearer to specify that where a site, or the company that owns a site, is based in the UK, a financial penalty can and will be applied.
For overseas sites, enforcing a financial penalty, if one can even get to grips with what the financial accounts look like, may be difficult, hence the enforcement notice and then a series of other potential backstop actions; I know that the Minister is aware that I do not feel that we have exhausted the debate on blocking. I am trying to probe the Government on whether there is a way to use the Bill to reflect the reality that content providers are unlikely to be based primarily in the UK, and that perhaps a different approach is needed for those based offshore.
Louise Haigh
We completely support the hon. Lady’s amendments, which propose a sensible toughening up of the requirements of the age verification regulator. We particularly welcome the measures to require the regulator to issue enforcement notices to people outside the UK if they do not comply. That is an attempt to close a large hole in the current proposals. How will the BBFC tackle providers outside the UK?
At the evidence session last week, David Austin said that
“you are quite right that there will still be gaps in the regime, I imagine, after we have been through the notification process, no matter how much we can achieve that way, so the power to fine is essentially the only real power the regulator will have, whoever the regulator is for stage 4”;
we are not yet certain.
He continued:
“For UK-based websites and apps, that is fine, but it would be extremely challenging for”
the BBFC, Ofcom or whoever the regulator is for stage 4
“to pursue foreign-based websites or apps through a foreign jurisdiction to uphold a UK law. So we suggested, in our submission of evidence to the consultation back in the spring, that ISP blocking ought to be part of the regulator’s arsenal.”––[Official Report, Digital Economy Public Bill Committee, 11 October 2016; c. 41, Q91.]
That is precisely why we will return to the amendment on ISP blocking, because if we are to pursue foreign-based providers, the ability to block will be integral to that strategy.
Thangam Debbonaire
My hon. Friend is making a series of excellent points which I hope the Minister can answer. We keep discovering that there are gaps, inconsistencies and potential confusion in the Bill. She has referred to the witnesses who gave evidence last week. Does she agree that it is really important that we focus carefully on the gaps that children’s charities such as the NSPCC have identified?
Louise Haigh
Obviously, I completely agree with my hon. Friend. We appreciate that the Government have consulted extensively with partners and representatives of all the relevant stakeholders, but it is not clear to us why they have not allowed ISPs that ultimate backstop power to block. For that reason, and to meet the objective of tackling providers outside the UK, we support amendments tabled by the hon. Lady the Member for Devizes.
Calum Kerr (Berwickshire, Roxburgh and Selkirk) (SNP)
I rise to support the amendments. It will not surprise the Committee to learn that I seek clarity about the impact on Scots law. It comes back to the same point: a lot of the issues that are being wrestled with in this place apply in a different legal jurisdiction. Perhaps the Minister could address that.
Christian Matheson
I should like to add to the comments made by hon. Friends. My concern is that if there are too many gaps and loopholes in the legislation, that may, perversely, put greater pressures on the enforcement authorities, because they will have to seek out so many different mouse-holes down which some of the content providers may run and disappear. I am slightly concerned and ask the Minister to consider the danger of an unintended consequence, because if it is not possible to stamp out content immediately, vital resources and focus will be diverted.
Louise Haigh
Does my hon. Friend also agree that with too many loopholes in the legislation, the more responsible providers of content will include age verification measures but users who want to avoid those tools will be pushed on to perhaps more extreme or violent pornography and perhaps even in to the deep web?
Christian Matheson
Yes. I raised this with the gentleman from the British Board of Film Classification, I believe, and I questioned his assertion about the top 50 websites. He said that the process would not stop there but proceed to the next 50, but if those 50 content providers are constantly moving all over the place, it will be rather like a game of whack-a-mole. Unless we have a sufficiently large mallet to give the mole a whack early on—[Interruption.] This is a serious business, and if I am sounding a bit jocular, that is not meant to take away from the serious issue. If we do not have the tools to address those who are deliberately not complying, and those who do not wish to comply with the regulations that we are putting in place to protect our children, I fear that we will be chasing after them too much.
My hon. Friend the Member for Sheffield, Heeley is right that there will also be the danger that investigative authorities use too many of their resources to go after this, when there are other things they need to go after as well. We need to put the tools at the disposal of the investigative and enforcement authorities, to give them the opportunity to make as clean an attack as possible on the providers that are not complying with the desire of this House.
Thangam Debbonaire
I will return to the evidence on this point to make clear why I support what the hon. Member for Devizes is trying to do. In his evidence last week, the NSPCC’s Alan Wardle—I think I have got that right—said quite clearly:
“I think that is why the enforcement part is so important…so that people know that if they do not put these mechanisms in place there will be fines and enforcement notices, the flow of money will be stopped and, crucially, there is that backstop power to block if they do not operate as we think they should in this country. The enforcement mechanisms are really important to ensure that the BBFC can do their job properly and people are not just slipping from one place to the next.”––[Official Report, Digital Economy Public Bill Committee, 11 October 2016; c. 47, Q108.]
So what my hon. Friend the Member for Sheffield, Heeley has just said is summed up very well by the NSPCC in its official evidence, and I hope that the Minister will have an answer for the NSPCC as well as for this Committee.
Matt Hancock
I am thankful for the opportunity to respond. I will actually respond to the points made about these amendments, which were tabled by my hon. Friend the Member for Devizes, rather than the reiteration of the blocking debate, which we have had and will no doubt have again on further clauses.
First, clause 17 clearly makes provision for the Secretary of State to designate more than one person as a regulator. Secondly—a crucial point—the complexity in regulation is deciding who is satisfying the rules and who is not, and that is for the BBFC to determine, whereas issuing fines is essentially a matter of execution and could be fulfilled by a variety of bodies. We will come forward with more detail on that in due course.
I think the whack-a-mole analogy inadvertently made the point, which is that when we are trying to deal with a problem on the internet, where people can move about, we can deal with the mainstream of the problem, which comes from reliable providers of adult material, who are already engaged and want to ensure they comply with the law. In future, once this measure becomes law, refusing to put age verification on adult material will be illegal, so we will be dealing with illegal activity. That will mean that the vast majority of people will comply with the law, and we heard that very clearly in the evidence session. The question then is how to deal with non-compliance and on the internet we know that that is very difficult. The proposals are to deal with non-compliance by disrupting business models and by imposing financial penalties.
I understand what my hon. Friend is trying to do. She is trying to strengthen the imposition of financial controls. Inadvertently, however, her amendments would reduce the regulator’s discretion by obliging the it to apply sanctions when they are available, and they would remove the power to apply financial penalties to non-UK residents.
We want to be able to fine non-UK residents—difficult as that is—and there are international mechanisms for doing so. They do not necessarily reach every country in the world, but they reach a large number of countries. For instance, Visa and other payment providers are already engaged in making sure that we will be able to follow this illegal activity across borders.
Therefore, while I entirely understand where my hon. Friend is coming from, the amendments would inadvertently have the effect of removing the ability to apply an enforcement notice to a UK resident, although I am certain that that is not what she intended. So I resist the amendment but I give her the commitment that we have drafted the clause in such a way as to make it as easy as possible for the enforcement regulator to be able to take the financial route to enforcement.
On the point made by the hon. Member for Berwickshire, Roxburgh and Selkirk, the provisions do extend to Scotland, with necessary modifications to Scottish law. I am sure that he, like me, will have seen clause 17(5) and clause 20(11)(b), which refer to modifications needed to be consistent with Scottish law. On the basis of that information, I hope that my hon. Friend will withdraw the amendment.
Claire Perry
I thank the Minister for that clarification and for the mention of support. The intention was to help to provide a practical solution rather than cut off aims. He has persuaded me that I do not need to press the amendment to a vote. Although I take the point about shared regulation, I would ask him to consider in setting up the BBFC as the primary regulator that it is working reasonably well in the video-on-demand world, but this may be having them stray into a new sphere of expertise in terms of finding, identifying and sending out enforcement notices or penalties, particularly for foreign-based companies. I think the whack-a-mole analogy is entirely consistent—they will shut their doors and reopen in another jurisdiction almost overnight. Given the anonymity principles, it is sometimes almost impossible to know where they actually are. If the Minister is assuring us that everyone is aware of the problem, he believes the powers allow the regulator to be flexible, and it is something that his Department will consider, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Louise Haigh
I beg to move amendment 86, in clause 20, page 21, line 40, leave out paragraph (b) and insert—
“(b) “during the initial determination period fix the date for ending the contravention of section 15(1) as the initial enforcement date.”.
The Chair
With this it will be convenient to discuss the following:
Amendment 88, in clause 20, page 21, line 40, at end insert—
“(c) after the initial determination period fix a period of one week for ending the contravention of section 15(1)”.
Amendment 89, in clause 20, page 22, line 13, at end insert—
‘(14) In this section, “initial determination period” means a period of 12 months from the date of the passing of this Act to the initial enforcement date.”.
Louise Haigh
This group of amendments goes even further—they have the straightforward intention of continuing the process of strengthening the powers and, crucially, of speeding up the enforcement period, to help the Government achieve their manifesto commitment. The Bill would give the regulator the power to set a lengthy, if not indefinite, period for ending the contravention of section 15. The amendment would speed up the enforcement, requiring the regulator to issue an enforcement period of one week. Given that we do not anticipate that the BBFC will be the official regulator or have these powers for another 12 months on Royal Assent, we do not anticipate that a one-week enforcement period would be too onerous on content providers.
The group should be seen in tandem with our other amendments providing a backstop power requiring ISPs to block a site, and would send a clear message to content providers that the Government would treat any contravention of section 15 with the utmost seriousness and that continuing to provide content without age verification for a prolonged period of time would not be tolerated. We believe that, if the enforcement powers under clauses 20 and 21 are toughened up, the message will spread throughout the industry and it will make it clear that age verification is not an optional extra, but a central requirement in the effort to tackle what under-18s can see.
Matt Hancock
I am sympathetic to the purpose of this group of amendments. We think that decisions on when and how to enforce should be left to the regulator, but I see the point of trying to put a week into the Bill. However, it is overly prescriptive to do so in primary legislation. Our aim is for a proportionate regime, where the regulator can prioritise and deal with problems in a way that is aligned with its goals of protection, rather than having to fulfil legal requirements that might lead to unintended consequences.
Louise Haigh
Can the Minister give us any example where a one-week enforcement period would not be doable?
Matt Hancock
No, but I cannot—and she cannot—foresee all the circumstances that the regulator will have to deal with. It is far better to have a regulator with flexibility to respond and clear aims and intentions, rather than it having to fulfil an arbitrary timescale because that is in primary legislation.
Louise Haigh
Can the Minister confirm whether the legislation enables the regulator to set a time limit for enforcement?
Matt Hancock
Yes, it will allow the regulator that flexibility. I would rather have that flexibility at the level of the regulator than in primary legislation. I think that is a reasonable approach. The regulator will then be able to act in the way that it is clear from this debate is intended. I hope that on that basis, the amendment may be withdrawn.
Louise Haigh
It is useful to have on the record the Minister’s agreement that one week is a suitable enforcement period. On that basis, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Calum Kerr
I beg to move amendment 62, in clause 20, page 22, line 13, at end insert—
“(14) Within 12 months of this Act coming into force, the Secretary of State shall commission a review of the effectiveness of the enforcement of sections 15 and 19 and shall lay the report of the review before each House of Parliament.”
The Chair
With this it will be convenient to discuss amendment 81, in clause 82, page 80, line 18, at end insert—
“(4A) Part 3 will come into force at the end of the period of one year beginning on the day on which the Act is passed.”
This amendment ensures that Part 3 will be implemented by ensuring the Part comes into effect a year to the day the Act is passed, rather than on the day the Secretary of State determines through regulations.
Calum Kerr
It took me a while to get out of my seat: I was astonished that we actually got some agreement there. Perhaps we have a new spirit of progress as we near the end of the day.
Calum Kerr
I doubt it too, but never mind. It is better to be an optimist, especially on the Opposition Benches.
Calum Kerr
No comment. Had we made more progress, amendment 62 might not have been necessary, but as I feared, we have not. I am confident that we all agree on the merit of the intent of this part of the Bill. We all want to protect young children from accessing inappropriate pornographic material. I do not want any of my children doing so, and I know how much they use electronic devices. My youngest, Robert, is only seven, and he is phenomenally tech savvy. It would not be that difficult in this world to stray, even with some of the blocking systems that are in place.
A lot of the problems that we have here are to do with international sites. I am dismayed at the Government’s unwillingness to move and not even so much as listen to Opposition Members, the regulator or charities, who all insist that ISP blocking is the kind of extra measure that we should put in place. Given that broader context and the Minister’s conviction, which I believe is sincere, that he has a package of measures that will work, in light of our concerns and those of many others, a review should be put in place. I know that in the past the answer to anything involving a review has been, “That’s what the Select Committee process is for; they will have a review,” but we should not leave something as important as protecting young children to a Select Committee. The Government should take responsibility rather than abdicate it to a Select Committee. The Government should put ISP blocking in the Bill, show that they treat the issue seriously and have a review to ensure that we get the outcome that we all want: a safer environment for our children on the internet.
Louise Haigh
Given that the Government have been so intransigent on the sensible suggestions for how their proposals could be strengthened, certainly on the issue of internet service provider blocking, I completely agree with the hon. Gentleman. The Minister keeps saying that he does not want to be too prescriptive, but we argue that the phrase “on a commercial basis” is too prescriptive and limits the powers of the age-verification regulator. Given the broad support for additional powers, we want the age-verification regulator and any other regulator involved in enforcement to come back to the House and tell us what additional powers they need to make this work. There are significant loopholes in the Bill and it could have serious unintended consequences for our young people. We completely support the SNP amendment.
Matt Hancock
I entirely understand the enthusiasm for commencement, and I have given the commitment that we would expect it within 12 months of Royal Assent. I hope that that deals with the demand for a timing of commencement to be put on the face of the Bill. Unfortunately, that renders the SNP amendment slightly impractical, because it would require a review within 12 months of Royal Assent, but if the Act commences only 12 months after Royal Assent, a review at that point might not show as much progress as we would hope.
Calum Kerr
I like the way the Minister is engaging. Is he telling me that he likes the idea, but it is just that we have worded it slightly wrongly? If that is the case, I would happily move the review 12 months on, if that is what he is suggesting.
Matt Hancock
Unfortunately, the hon. Gentleman has lost his opportunity for that because the deadline for tabling amendments has passed. We should have an enduring assessment of the effectiveness of the Bill and an ongoing review of how effective the policy is. Select Committees have an important role to play in doing that. I resist the amendment on the grounds that it is impractical, because of the timings I have discussed, and because it is far better that such matters are reviewed constantly, rather than just on a one-off.
Thangam Debbonaire
In my experience, ongoing reviews tend to mean never. If you do not have a deadline or target, that gives you the scope just to say, “We are doing it and will carry on doing it for some time,” without there ever being a point at which you say, “Here’s a review.” An annual review is such an easy thing to which to commit; why not do it?
The Chair
Order. I remind the hon. Lady that I am not going to do anything with regard to the Bill. She should return to using normal parliamentary speech.
Matt Hancock
We thought you might be the regulator for part 4, Mr Stringer.
I suppose this is the difference between the two sides of the House: for the Opposition, an ongoing review means never; for the Government, an ongoing review means always.
Calum Kerr
My background is in telecoms, latterly as a global consultant coaching front-line leaders. People always said to me, “Oh yeah, we always have reviews,” but unless there is a cadence on it and it is put down in black and white, it is not done properly. They would not do it in the business world, and Opposition Members would not do it; perhaps Government Members are a bit more blasé than we are.
Matt Hancock
That tells us all we need to know about consultants. There we are. I commit that we will keep the effectiveness of the legislation under review. I know that that will happen anyway because I know that my hon. Friend the Member for Devizes is not going to let this one go.
Christian Matheson
How might the Minister review the ongoing review to ensure that progress is being made?
Matt Hancock
We will have a continuous review of the ongoing review. With that, I urge the hon. Gentleman to withdraw the amendment.
Question put, That the amendment be made.
Louise Haigh
I will not test the Committee’s patience further by going over arguments that we have already had, but there is one further area of clause 20 that we wish to touch on—the lack of an appeals process in the legislation. The Minister may expect the regulator to build that appeals process in: it would be helpful to have some clarity from him on that.
As I understand it, the BBFC will use analytics to identify sites that should have age verification. Analytics are not foolproof, so obviously an appeals mechanism will be needed for websites incorrectly prevented from operating. Previous such systems have wrongly filtered out websites such as breast cancer charities or forums for gay and transgender people. That is incredibly important: let us put ourselves in the shoes of a young gay man or woman, growing up in a religious household perhaps, who does not know where to turn to ask the questions that would plague any teenager coming to terms with their sexuality and who seeks refuge and solace in internet forums with other people going through the same issues. As risky as the internet can be, it can also be an incredibly empowering, transformative space that can literally save lives in such situations. Such lifelines must absolutely not be filtered out by ASPs or made subject to age verification; the Bill should include a mechanism that allows for correction when they have been mistakenly identified.
We also need clarification on who will develop the analytics, the data they will be based on and whether it will be done in consultation with the tech industry. We can only assume that this is an oversight that will be corrected when working out how the regulator is to proceed.
Claire Perry
The hon. Lady raises an important point about access to information about sex education, sexuality, abortion and all sorts of things that are incredibly valuable. She is right to draw attention to safe forums. I reassure her that many of the same issues came up with respect to the question of voluntary filtering and, despite what some of those giving evidence said, the incidence of false blocking of such valuable sites is incredibly low. The BBFC as regulator is really good: it is not in the business of defining based on imagery, and it has fairly detailed algorithms. I share her concern, but I want to offer some comfort.
Louise Haigh
I am grateful. I heard the BBFC or the Open Rights Group say that the incidence was very low, but it would do no harm to build an appeals process into the legislation to ensure that where sites that should not be blocked or require age verification have fallen through the cracks, that can be resolved at the behest of the regulator.
Matt Hancock
The hon. Lady is absolutely correct that there needs to be an appeals process. That process is provided for in clause 17(4):
“The Secretary of State must not make a designation under this section unless satisfied that arrangements will be maintained by the age-verification regulator for appeals”.
I agree with everything else she said. It is worth remarking on the recent announcement that gay and bisexual men will now be pardoned over abolished sexual offences—that is not in the Bill, so that remark was completely out of order, but I still think it was worth making. Appeals are important; I hope she is satisfied that they are provided for.
Question put and agreed to.
Clause 20 accordingly ordered to stand part of the Bill.
Clause 21 ordered to stand part of the Bill.
Clause 22
Age-verification regulator’s power to give notice of contravention to payment service providers and ancillary service providers
Claire Perry
I beg to move amendment 75, in clause 22, page 23, line 28, at end insert; “and
(c) the person has been the subject of a enforcement notice under section 20(2) and the contravention has not ceased.”
The Chair
With this it will be convenient to discuss the following:
Amendment 76, in clause 22, page 23, line 29, leave out “may” and insert “must”
This amendment places a requirement on the age-verification regulator to give notice to payment or ancillary service providers that a person has contravened clause 15(1) or is making prohibited material available on the internet to persons in the United Kingdom.
Amendment 79, in clause 22, page 24, line 24, leave out “may” and insert “must”
This amendment places a requirement on the age-verification regulator to issue guidance about the services that it determines are enabling or facilitating the making available of pornographic or prohibited content.
New clause 6—
“Requirement to cease services to non-complying persons
‘(1) Where the age-verification regulator has given notice to a payment-services provider or ancillary service provider under section 22(1), the payment-services provider or ancillary service provider must cease the service provided to the person making pornographic material available in the United Kingdom.
(2) A payment-services provider or ancillary service provider who fails to comply with a requirement imposed by subsection (1) commits an offence, subject to subsection (3).
(3) No offence is committed under subsection (2) if the payment-services provider or ancillary service provider took all reasonable steps and exercised all due diligence to ensure that the requirement would be complied with.
(4) A payment-services provider or ancillary service provider guilty of an offence under subsection (2) is liable, on summary conviction, to a fine.
(5) In this section “payment-services provider” and “ancillary service provider” have the same meaning as in section 22.”
This new clause requires payment and ancillary services to block payments or cease services made to pornography websites that do not offer age-verification if they have received a notice of non-compliance under section 22(1). This provision would only apply to websites outside of the UK. This would enhance the enforcement mechanisms that are available under the Bill.
New clause 18—Approval of Age-verification providers—
‘(1) Age-verification providers must be approved by the age-verification regulator.
(2) In this section an “age-verification provider” means a person who appears to the age-verification regulator to provide, in the course of a business, a service used by a person to ensure that pornographic material is not normally accessible by persons under the age of 18.
(3) The age-verification regulator must publish a code of practice to be approved by the Secretary of State and laid before Parliament.
(4) The code will include provisions to ensure that age-verification providers—
(a) perform a Data Protection Impact Assessment and make this publicly available,
(b) take full and appropriate measures to ensure the accuracy, security and confidentiality of the data of their users,
(c) minimise the processing of personal information to that which is necessary for the purposes of age-verification,
(d) do not disclose the identity of individuals verifying their age to persons making pornography available on the internet,
(e) take full and appropriate measures to ensure that their services do not enable persons making pornography available on the internet to identify users of their sites or services across differing sites or services,
(f) do not create security risks for third parties or adversely impact security systems or cyber security,
(g) comply with a set standard of accuracy in verifying the age of users.
(5) Age-verification Providers must comply with the code of practice.
(6) To the extent that a term of a contract purports to prevent or restrict the doing of any act required to comply with the Code, that term is unenforceable.”
Claire Perry
We promised to return to the topic of enforcement and blocking, and we have reached it today. That is very good; it suggests that our progress on the Bill is excellent.
The purpose of these amendments and new clause 6 is to clarify and strengthen the enforcement process. We have already discussed fruitfully how clause 20 will be used, particularly for sites based overseas, and I was reassured by what the Minister said, but I want to turn to the “what ifs”. What happens if the regulator acts, has clarity about whether they are imposing a fine or an enforcement notice, and nothing actually happens—none of the sanctions in the current regime leads to a website imposing age verifications? I welcome what the Bill says about involving a direct relationship between not just the regulator and the platform or the website, but the payment providers. As the Minister said, cutting off the business model—the cash flow—is a very effective way of making enforcement happen.
I have a series of questions relating to the process. First, it is not clear when the regulator will inform providers that such a contravention is happening. Some questions were asked about how long it will be and what the time period will be, but when does the regulator actually issue a notice? Amendment 75 states that the regulator has a power to issue a notice under clause 22 when an enforcement notice has been issued and the contravention has not yet ceased. I think websites ought to be given the opportunity to respond to the regulator’s intervention before the payment providers and ancillary services are involved. That process should be very clear. It is the same if we have an issue with service provision at home: we know what our rights are, what period of time we have to complain and what happens when that period expires.
Secondly, as I read the Bill—I am in no way setting myself up as somebody who understands every aspect of the legal jargon—there appears to be no requirement for the regulator to inform the payment providers and ancillary services of a contravention. It may just be implicit, but amendment 66 would make it mandatory for the regulator to inform the payment providers and ancillary services if there were a contravention. I would be interested to hear the Minister’s views on that.
Thangam Debbonaire
I am pleased that we have returned to enforcement and compliance, and I hope we are going to spend more time on blocking. The hon. Lady’s amendment uses the term “ancillary service provider”, to which she referred earlier. I would be very grateful if she spent some time spelling out in a bit more detail what an ancillary service provider is. Does it include ISPs? I think she alluded to that earlier, but I am not sure. Can she help clear up the confusion with some detail, please?
Claire Perry
I apologise if I have caused any confusion. I will let the Minister specify exactly what he thinks. In tabling these amendments, I wanted to ensure that as wide a group of people and companies as possible is involved in doing something we all think is very valuable—implementing these age verification mechanisms. As I read the Bill as drafted, it does not contain a clear distinction between ISPs and ancillary service providers; they are included in the same bucket. I want to clarify that I think that both ISPs and ancillary service providers—in my mind, ancillary service providers are the platforms that we discussed by name earlier—have a duty and a legal responsibility to ensure that the age-verification mechanisms are in place.
Thangam Debbonaire
The hon. Lady will have to forgive me. We are going to hear from the Minister shortly, but I would like to know if, in her amendment, ancillary service providers definitely include internet service providers. I know it is a difference of just one word, but I would be grateful for her clarification.
Christian Matheson
I share some of the hon. Lady’s uncertainty—I was going to say confusion, but it is not—about the terminology. Would the definition include, for example, telecoms providers over whose networks the services are provided?
Claire Perry
I am perhaps going to let the Minister spell that out exactly. The hon. Gentleman raises a very important point: we all know now that access to internet services is often done entirely over a mobile network. I can again give some comfort on this issue. The BBFC, which is an excellent choice, has worked for many years with the mobile service providers—a witness gave evidence to this effect—so they already offer a blocking service based on the BBFC’s definition of 18-plus and 18-minus material. It is essentially an opt-in service. Someone has to say that they are under 18 and checks are carried out. The providers already offer the service, and it seems to work reasonably effectively.
I apologise for inadvertently misleading the Committee —perhaps it reflects some of the confusion in the wording—and I want to be very clear about who we are trying to capture with the amendments. We would all support the idea of spreading the net as widely as possible in ensuring the right behaviour, but it is important to make clear that ISPs are to be expected and legally mandated to carry out the same checks.
Another point I wanted to make with amendment 79 was to ask the regulator to issue guidance on the sort of businesses that will be considered to be ancillary services. The reason for putting that in the Bill is that, as we debated extensively in earlier sittings, the world changes. We had very good debates about why 10 megabits per second might not be appropriate in a couple of years’ time and why the USO as originally construed was laughably small. We all try to do the right thing, but of course the world changes. The reference by the hon. Member for City of Chester to Whac-A-Mole was interesting. What will the consequences be of implementing the Bill? We are a very substantial revenue stream for many websites, and new service models might arise. Someone might be scrutinising the letter of the law and thinking, “We are not captured by this, so we are not captured by these regulations.” Asking for the regulator to issue guidance on the types of businesses that will be considered to be ancillary services could future-proof some of the Bill.
Thangam Debbonaire
I am grateful for the hon. Lady again allowing me to intervene. I apologise for interrupting her sentence; that was not my intention. I am pleased to see her amendments. This discussion is helping me and perhaps all of us to come to some form of understanding. I have a little metaphor in mind. If a cinema was allowing children to see pornography, we would hold the ticket seller responsible, as well as the organisation running the cinema, but not the bus driver who drove the bus the child took to get to the cinema. Does that metaphor help?
Claire Perry
It depends whether the bus driver was paid for by the cinema. That is the point. Businesses pop up. There might be a bespoke Odeon cinema. My point is that we need to ensure that the regulator has as much flexibility as possible to respond to changing definitions. The current definition of an ancillary service provider is quite clear, although I would like the Minister to clarify it, but my amendment would try to future-proof the definition.
Thangam Debbonaire
In raising the issue of whether the bus driver was paid for by the cinema, the hon. Lady has helped me to hit on something else. Are we not considering the role of search engines in this matter and whether they are driving things or complicit? I do not know the answer to that question. She has raised a helpful analogy in response to my analogy.
Claire Perry
How long has the Committee got to hear about search engines? The hon. Lady raises a fascinating point. It was through a very strong cross-party effort and with the leadership of the former Prime Minister that we got the search engines to do some compelling things. Let me give her an example. It was clear that search engines in Europe were happy to allow terms to be typed in that could only lead to sexual images of child abuse being returned. I had the important but unenviable job, as the Prime Minister’s special adviser on the issue, of sitting down with the parents of April Jones, the little girl murdered in Wales, and trying to explain to them why, when their daughter’s killer typed in “naked little girls in glasses”, they received an image. It took many levels of conversation, including a personal conversation between me and the head of Google Europe, saying, “How do you as a parent feel about this? I don’t care about you saying ‘We serve up everything at all times’; I don’t care that the search terms themselves are not illegal. What I care about is your duty. You have a duty to do no evil, and in my view, you are breaching that.”
This is why I am so proud of what the Government have done. With all that effort and by recruiting Baroness Shields, who has been a worthy addition, we got the internet service providers not only to not return illegal imagery but, with the help of experts, not to return anything at all to a whole series of search terms that were found to be used by paedophiles in particular. I am sure that the hon. Lady will have seen that the Government then went further. It all comes down to what is legal. Your porn is my Saturday night viewing. [Laughter.] Theoretically.
Thangam Debbonaire
I urge the hon. Lady to consider re-wording what she just said, for my sake and for hers.
Claire Perry
I may have come up with a Daily Mirror headline. My point is that the whole debate about pornographic material has always ended in the cul-de-sac of freedom of speech. That is why we worked with internet service providers, saying, “Let parents choose. Let’s use the BBFC guidelines. They have years of experience defining this stuff based on algorithms.” It is not for the hon. Lady or me to decide what people should not be viewing; we quite properly have an independent agency that says, “This is appropriate; this is not.”
However, the hon. Lady has eloquently raised the point that for too long, we have treated the internet as a separate form of media. We accept in cinemas, whether or not the bus driver is working for them, that if a film is R18, we are pretty negligent if we take our kids to see it, but we are helped to see that. We do not let our kids wander into the cinema and watch the R18 stuff with nobody stopping them along the way, but for too long, that has been the situation with the internet. The hon. Lady has raised a good point about search engines. I can assure her that the world has changed significantly, certainly in the UK, although other jurisdictions may not have been so influenced.
Nigel Huddleston
I should probably declare that prior to becoming an MP, I worked at Google. Does my hon. Friend agree that this is where it becomes complex? A search engine, to use another analogy, is a bit like a library. The books are still on the shelves, but the search engine is like the library index: it can be removed and changed, but the content is still there. That is why we need to do much more than just removing things from the search engine: the content is still there, and people can find alternative ways to get to it. We must do much more.
Claire Perry
I defer to my hon. Friend’s knowledge. Of course we all agree that certain instances of countries taking things down are utterly abhorrent; I am thinking of information about human rights in China, or about female driving movements in Saudi Arabia. We do not want to be in the business of over-specifying what search engines can deliver. We have not even touched on Tor, the dark web or the US State Department-sponsored attempts to circumvent the public internet and set up some rather difficult places to access, which have increasingly been used for trafficking illegal material.
Thangam Debbonaire
We need to keep hold of the search engine issue for a moment, because search engines are part of the process. To restate the bus driver analogy, a search engine is also like a sign saying to adults, and children, “You can go here to see pornography”.
Claire Perry
I think we will let the Minister talk about that. Again, think about the practical series of keystrokes. Let us take gambling for a moment. It is quite a good analogy, because we mandated in the Gambling Act 2005 that there should be age verification. The search engine host provides access to a site, and users must go through an age verification mechanism. Age verification is incumbent on the site, and the service provider is legally responsible. I shall let the Minister discuss search engines in his speech.
Louise Haigh
I rise to speak to new clause 18, which stands in my name and that of my hon. Friend the Member for Cardiff West. I also support the amendments tabled by the hon. Member for Devizes. The Government’s proposals really do rely on an awful amount of good will among all the stakeholders involved in the legislation. It makes sense to create a backstop power for the regulator to require payment services to act should they not do so in the first instance.
New clause 18 comes from a slightly different perspective. It would oblige the age-verification regulator to ensure that all age verification providers—the companies that put the tools on websites to ensure compliance—are approved by the regulator; to perform a data protection impact assessment that they make publicly available; and to perform an array of other duties as well.
The new clause is designed to address some of the concerns about the practicality of age-verification checks, ensuring that only minimal data are required, and kept secure; that individuals’ privacies and liberties are protected; and that there is absolutely no possibility of data being commercialised by pornographer. We raise the latter as a potential risk because the proposals were drafted with the input of the pornography industry. That is understandable, but the industry would have a significant amount to gain from obtaining personal data from customers that might not currently be collected.
As we said earlier, we have full confidence in the BBFC as regulator, but, as with the proposals in part 5 of the Bill, it is vital that some basic principles—although certainly not the minutiae—are put on the face of the Bill. We are certainly not asking anything that is unreasonable of the regulator or the age-verification providers. The principles of privacy, anonymity and proportionality should all underpin the age-verification tool, but as far as I am aware they have not featured in any draft guidance, codes of practice, or documents accompanying the Bill.
The Information Commissioner agrees. The Information Commissioner’s Office’s response to the Department for Culture, Media and Sport’s consultation on age verification for pornography raised the concern
“that any solution implemented must be compliant with the requirements of the DPA and PECR”—
the Data Protection Act 1998, and the Privacy and Electronic Communications (EC Directive) Regulations 2003 that sit alongside it. It continues:
“The concept of ‘privacy by design’ would seem particularly relevant in the context of age verification—that is, designing a system that appropriately respects individuals’ privacy whilst achieving the stated aim… In practical terms, this would mean only collecting and recording the minimum data required in the circumstances, having assessed what that minimum was. It would also mean ensuring that the purposes for which any data is used are carefully and restrictively defined, and that any activities keep to those restricted purposes…In the context of preventing children from accessing online commercial pornography, there is a clear attribute which needs to be proven in each case—that is, whether an individual’s age is above the required threshold. Any solution considered needs to be focussed on proving the existence or absence of that attribute, to the exclusion of other more detailed information (such as actual date of birth).”
The Commissioner made it clear that she would have
“significant concerns about any method of age verification that requires the collection and retention of documents such as a copy of passports, driving licences or other documents (of those above the age threshold) which are vulnerable to misuse and/or attractive to disreputable third parties. The collection and retention of such information multiplies the information risk for those individuals, whether the data is stored in one central database or in a number of smaller databases operated by different organisations in the sector.”
I understand that the Adult Provider Network exhibited some of the potential tools that could be used to fulfil that requirement. From the summary I read of that event, none of them seem particularly satisfactory. My favourite was put forward by a provider called Yoti, and the summary I read describes the process for using it as follows:
“install the Yoti App…use the app to take a selfie to determine that you are a human being…use the app to take a picture of Government ID documents”—
passport or driving licence, I imagine—
“the app sends both documents to Yoti…Yoti (the third party) now send both pictures to a fourth party; it was unclear whether personal data (e.g. passport details) is stripped before sending to the fourth party…Fourth party tells Yoti if the images (selfie, govt ID) match…Yoti caches various personal data about user”
to confirm that they are over 18. The user can then visit the porn site—whatever porn site they would like to visit at that time—and then the
“porn site posts a QR-like code on screen…user loads Yoti app…user has to take selfie (again) to prove that it is (still) them…not a kid using the phone…user scans the on-screen QR-code, is told: ‘this site wants to know if you are >18yo, do you approve?’…User accepts…Yoti app backchannel informs porn site…that user >18yo”
and then the user can see the pornography.
I do not know whether any Committee members watch online pornography; I gather that the figure is more than 50% of the general population, and I am not convinced that hon. Members are more abstinent than that. I ask Members to consider whether they would like to go through a process as absurd as the one suggested.
Louise Haigh
The hon. Lady has got ahead of the potential Daily Mail headline when the freedom of information request comes in for her Google search history.
I am not convinced that anybody would want to go through a process as the one I have just described, or even one significantly less convoluted. I suggest that instead they would seek entertainment on a site that did not impose such hurdles. The BBFC in its evidence made the telling point that the majority of the viewing population get their content from the top 50 sites, so it is very easy to target those—we see that entrenched in clause 23. The problem with that, as my hon. Friend the Member for City of Chester pointed out, is that targeting those sites may push viewers to the next 50 sites, and so on. We therefore need to ensure that the process is as straightforward and as minimal as possible.
Christian Matheson
My concern about users being pushed to the next 50 sites is that those sites are much less regulated, and I hazard a guess that they are much more likely to be at the extreme end of the spectrum.
Louise Haigh
That is exactly my concern. I imagine that the top 50 providers are not as hardcore, are less extreme and may not include such violent images; as we move on to the next 50 or the 50, there is a danger of images becoming more extreme.
The solution must not result in the wholesale tracking or monitoring of individuals’ lawful online activities or the collection of data with a view to unlawful profiling of individuals. I am not convinced that the BBFC is properly resourced to undertake the significant additional workload, nor am I convinced that the practicalities of the software that have so far been exhibited, or their implications, have been properly worked out.
Christian Matheson
My hon. Friend is generous in giving way. She is absolutely right about resourcing. I am no technical expert, but does she agree that such a database may be a prime target for hackers unless it is properly resourced and defended?
Louise Haigh
That is absolutely right, and I will come to that point. We heard evidence from the BFFC that it intended potentially to use age-verified mobile telephony to ensure that sites are properly age verified, but I am afraid that that approach is also flawed. First, there is the obvious issue that there is nothing to stop an underage child using the information attached to that phone—be it the phone number or the owner’s name—to log on and falsely verify. Equally, there are enormous privacy issues with the use of mobile-verified software to log on.
The BBFC said clearly that it was interested not in identity but merely in the age of the individual attempting to access online pornography, but as we all know, our smartphones contain a wealth of information that can essentially be used to create a virtual clone. They are loaded with our internet conversations, financial data, health records, and in many cases the location of our children. There is a record of calls made and received, text messages, photos, contact lists, calendar entries and internet browsing history—the hon. Member for Devizes may want to take note of that—and they allow access to email accounts, banking institutions and websites such as Amazon, Facebook, Twitter and Netflix. Many people instruct their phones to remember passwords for those apps so they can quickly be opened, which means that they are available to anyone who gets into the phone.
All that information is incredibly valuable—it has been said that data are the new oil—and I imagine that most people would not want it to be obtained, stored, sold or commercialised by online pornography sites. The risks of creating databases that potentially contain people’s names, locations, credit card details—you name it—alongside their pornographic preferences should be quite clear to anyone in the room and at the forefront of people’s minds given the recent Ashley Madison hack. I am not condoning anyone using that website to look for extramarital affairs, nor am I privileging the preferences or privacy of people who wish to view online pornography over the clearly vastly more important issue of child protection. However, one consequence of that hack was the suicide of at least three individuals, and we should proceed with extreme caution before creating any process that would result in the storing of data that could be leaked, hacked or commercialised and would otherwise be completely private and legitimate.
That is the reasoning behind our reasonable and straightforward amendment, which would place a series of duties on the age-verification regulator to ensure that adequate privacy safeguards were provided, any data obtained or stored were not for commercial use, and security was given due consideration. The unintended consequences of the Government’s proposals will not end merely at the blocking of preferences, privacy or security issues, but will include pushing users on to illegal or at the very least non-compliant sites. We are walking a thin tightrope between making age verification so light-touch as to be too easily bypassed by increasingly tech-savvy under-18s and making it far too complicated and intrusive and therefore pushing viewers on to either sites that do not use age verification but still offer legitimate content or completely illegal sites that stray into much more damaging realms. These provisions clearly require a lot more consultation with the industry, and I am confident that the BBFC will do just that, but the Opposition would feel a lot more confident and assured if the regulator was required to adhere to these basic principles, which we should all hold dear: privacy, proportionality and safety.
Claire Perry
The hon. Lady rightly gets to the great concern that somehow, in doing something good, an awful lot of concern can be created, and I am sympathetic to her points. I remind her that it is not as if these sites do not know who is visiting them anyway. One of the great conundrums on the internet is that every single keystroke we take is tracked and registered. Indeed, that is why shopping follows us around the internet after we have clicked on a particular site. Unless people are very clever with their private browsing history, the same is the case for commercial providers.
Louise Haigh
I absolutely support the Government’s intention here. We just want to ensure it is done in the right way and balances both sides of the argument. I think it is absolutely right that internet service providers are offering this filter, but does the hon. Lady share my concern that very few families take it up and very many families turn it off?
Claire Perry
There are Ofcom data. One of the requirements we asked for was for Ofcom to monitor. Take-up improved, and, as I said, some internet service providers now have an automatic “on” system, whereby a person has to intervene to take the filters off. I am told that only about 30% of families choose to do so. Here is the savvy thing: we all know that people live in households with multiple ages and multiple requirements on the internet, so many ISPs now offer a service that enables people to disable the filters for a period and automatically reinstate them the following day. They do not have to do anything if they want the filters to be in place, but they might want to access over-18 content as an adult.
I want to discuss some of the other issues that have come up in this conversation, in the process of finally speaking about these amendments. Is it in order to do so, Mr Stringer?
The Chair
It is if it is covered by the amendments and new clauses 6 and 18, but I cannot tell until you start speaking.
Claire Perry
Then I will carry on, because it definitely is. I think I misspoke at the beginning when I talked about new clause 7. I was actually referring to new clause 6; it was just my note-taking.
I was trying ensure that we put in place series of protections, including enforcement notices that are acted upon, financial penalties that make a difference and the ability to stop income streams moving from the payment providers to the various content providers. I want to press the Minister on the question of blocking, because it comes back to the issue of why anyone would care. If somebody does not respond to an enforcement notice—if, for example, the fine is not sufficient to make them stop —how can it be that we are not considering blocking? Of course, we do that for other sites. I know it is not applicable to every form of illegal content, but I am very struck by copyright infringement, which generates take-down notices very swiftly, and upon which the entire provision of internet service providers and ancillary services act. I would be really interested to hear from the Minister why blocking has been rejected so far. Could it be put in place as a backstop power? I worry that, without it, all of this amazing progress will not have teeth.
Matt Hancock
It is sometimes said that Parliament skates over matters and does not get under the skin of things, but in the discussion we have just had Committee members displayed a great deal of analysis, experience and wisdom, and our debate on the Bill has been enriched by it. I am very grateful to hon. Members on both sides of the Committee who made very good contributions to help us get this right.
Exactly as the hon. Lady the Member for Sheffield, Heeley said, getting this right involves walking a tightrope between making sure that there is adequate enforcement and appropriate access for those for whom it is legally perfectly reasonable to access adult content. We must get that balance right. With that mind, we have drafted the clauses, particularly clause 22, to allow the regulator to operate with some freedom, because we also need to make sure that, over time, this remains a good system and is not overly prescriptive. It was ironic that in a speech about privacy, the hon. Lady started to speculate about which MPs enjoyed watching porn. I am definitely not going to do that.
The truth is that age verification technology is developing all the time. Online personal identity techniques are developing all the time, and indeed, the British Government are one of the leading lights in developing identity-verification software that also minimises the data needs for that verification and does not rely on especially large state databases to do that, and therefore does it in a relatively libertarian way, if I can put it that way. Providing for verification of identity or of age, because age without named identity is what is really being sought here, but is difficult to achieve, is an incredibly important issue. A huge amount of resource is going into that globally to get it right, and it ties closely to cyber security and the data protection requirements of any data.
The UK Data Protection Act has a broad consensus behind it and follows the simple principle that within an institution data can be shared, but data must not be shared between institutions. The institution that holds the data is responsible for their safekeeping and significant fines may be imposed for their inadvertent loss. The forthcoming General Data Protection Regulation increases those fines. Rather than reinventing data protection law for the purposes of age verification in this one case, it is better to rest on the long-established case law of data protection on which the Information Commissioner is the lead.
We had a very informed debate on the role of search engines. The regulator will be able to consider whether a search engine is an ancillary service provider. Although we do not specify it, I would expect ISPs to be regarded as ancillary service providers, but that will be for the regulator.
On the name of payment providers who are already engaged, rather than enforced engagement, we already have engagement from Visa, MasterCard, UK Cards Association and the Electronic Money Association, and clearly there a lot more organisations that can and should be engaged.
Kevin Brennan
It is interesting that the Minister feels able to say that he would expect ISPs to be regarded as an ancillary service provider, but he did not use the same terminology when talking about search engines. To press him on that, would he expect search engines in some cases, or may be in all cases, to be considered as ancillary service providers?
Matt Hancock
I do not draw any distinction between the two, but the decision is for the regulator. The legislation provides that they could be, and it depends on the circumstances whether they would be. Of course, obviously, they play different roles.
Kevin Brennan
Just to clarify, I think the right hon. Gentleman is saying that in making no distinction, he would be able to apply the word “expect” to search engines as well as to ISPs. That is what I was probing him to find out.
Matt Hancock
I am choosing not to use that word because I want to leave it to the regulator, rather than leaving an implication that it should move one way or the other. The regulator should define what is an ASP according to the legislation.
Kevin Brennan
The Minister is therefore making a distinction between the two. In one case he clearly has an expectation that it will happen, and in the other case he does not. The Committee will be interested to know why he is making that distinction, which he denies he is making, because it is important to our understanding the reluctance in the Bill to involve search engines in some of these regulations.
Matt Hancock
They should be treated the same in that the same provisions in the Bill should be applied to each, but each performs a different role and ISPs are inevitably more closely connected to the provision of content because the content goes through an ISP, whereas a search engine may or may not be the route through which content is found. For implementation, it is clear that that is for the regulator to decide within the provisions set out in the Bill.
Thangam Debbonaire
I refer the Minister to the point made by the hon. Member for Devizes, who mentioned the murder of April Jones and the fact that her killer was able to type certain words into a search engine that I cannot bear to repeat. Search engines have the power to change their algorithm—we know they do.
Matt Hancock
The point that my hon. Friend the Member for Devizes was making is that, owing to her work, the search engines made precisely those sorts of changes on a voluntary basis. At the request of the Government and others, they now undertake millions of changes to their algorithms and millions of take-downs for both child porn and terrorist-related purposes. That system is working well, and it does not need to be underpinned by regulation.
There is then a wider question. I am straying to the limits of order to discuss this, but my hon. Friend very effectively argued that the principle that the internet should provide the freedom that it provides within the framework of a regulated structure. We agree with that, and we are providing for some of that regulated structure in this Bill. There is a first amendment-type argument, if we are thinking about it in an American way, that the internet is free and laissez-faire and that we should not regulate it. There are people who say, for instance, that we should not recreate national jurisdictional boundaries on the internet and that we should not regulate it, that it should be completely free. We reject that argument, which is why we are prepared to introduce legal requirements on age verification for the provision of information over the internet in the UK jurisdiction. We reject the argument because, at a principled level, the freedoms that we enjoy are freedoms that do not harm others, which applies offline just as much as it applies online. Because the internet is relatively new, we are still in the early days of applying such a principle to the internet. That is a much bigger debate than in clause 22, and therefore I should not go into further detail.
Thangam Debbonaire
I believe that the Minister has just answered the question of my hon. Friend the Member for Cardiff West on whether a search engine is an ancillary service provider. The Minister acknowledges that search engines, as well as ISPs, should be considered as such.
Matt Hancock
All I did was set out the principles behind the Government’s response to the amendments to clause 22. The Committee must know those principles in order to understand the direction that we are taking on regulation.
I will move on to some of the other points that were made. I will respond to new clause 18 and amendment 79.
Claire Perry
I thank the Minister for that response. I would have liked to hear him say a little bit more about how the payment service providers are involved in the game and whether we are relying on them to do the right thing because they are large corporate companies, or whether, as new clause 6 proposed, there was an opportunity to strengthen the wording of the Bill.
Matt Hancock
I apologise; there were so many interesting points made that I did not get to that one.
The provision of pornography without an age verification in the UK will become illegal under this Bill. There is a vast panoply of financial regulation requiring that financial organisations do not engage with organisations that commit illegal activities, and it is through that well-embedded, international set of regulations that we intend to ensure that payment service providers do not engage with those who do not follow what is set out in the Bill. Rather than inventing a whole new system, we are essentially piggybacking on a very well-established financial control system.
Claire Perry
That is a very reassuring reply and I thank the Minister for it. We have had a very good debate. I know that his officials will be listening and thinking hard about what has been said, and I do not think it would serve the Committee any purpose to press my amendments or my new clause to a vote.
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
Louise Haigh
It was interesting to hear the Minister refer to financial regulations. I was not present on Second Reading because I was not then in the position that I occupy now, but having read that debate I do not believe that there was any such reference. So we would like some clarity on who will be the regulator of the payment service providers and what work has already been done with the Financial Conduct Authority—I assume it will be with the FCA in this circumstance—to ensure that it will be regulating those providers, to make sure that they act with speed and due diligence on receiving notification from the age verification regulator under clause 15.
It is disappointing that the Government do not consider new clause 18 necessary to amend the Bill. I appreciate that the BBFC has been given powers to establish a code of practice, but given the very serious consequences that could result from that not being done correctly, some basic principles need to be embedded into the process, based on the issues that I raised earlier in our discussion.
I will just add that we will return to this issue on Report.
Matt Hancock
We have been engaging directly with payment service providers, although—no doubt as and when necessary—engagement with financial authorities will be made. Payment service providers can withdraw services from illegal activity under their existing terms and conditions, so the provision is already there for the measures to take effect.
Question put and agreed to.
Clause 22 accordingly ordered to stand part of the Bill.
Clause 23
Exercise of functions by the age-verification regulator
Claire Perry
I beg to move amendment 80, in clause 23, page 25, line 1, at end insert—
‘(3) The age-verification regulator must consult with any persons it considers appropriate, about the option to restrict the use of its powers to large pornography websites only.’
This amendment requires the age-verification regulator to consult on whether, in the exercising of its function, it should restrict its powers to large pornography websites only.
The Chair
With this it will be convenient to discuss new clause 12—Code of practice by age verification regulator—
‘(1) The age verification regulator must issue a code of practice giving practical guidance as to the requirements of any provision under this Part of the Act.
(2) The following persons must, in exercising their functions under this Part and in the design and delivery of their products and services, adhere to the code of practice, and ensure that the safety and wellbeing of children is paramount—
(a) relevant persons;
(b) internet service providers;
(c) ancillary service providers;
(d) payment-service providers; and
(e) any such other persons to whom the code of practice applies.
(3) Any code of practice issued by the age verification regulator under subsection (1) above must include standards in relation to the following—
(a) how content is managed on a service, including the control of access to online content that is inappropriate for children, and the support provided by the service for child safety protection tools and solutions;
(b) the assistance available for parents to limit their child’s exposure to potentially inappropriate content and contact;
(c) how the persons specified in subsection (2) above shall deal with abuse and misuse, including the provision of clear and simple processes for the reporting and moderation of content or conduct which may be illegal, harmful, offensive or inappropriate, and for the review of such reports;
(d) the action which must be taken in response to child sexual abuse content or illegal contact, including but not limited to, the co-operation with the appropriate law enforcement authorities;
(e) the action to be taken by the persons specified in subsection (2) above to comply with existing data protection and advertising rules and privacy rights that address the specific needs and requirements of children; and
(f) the provision of appropriate information, and the undertaking of relevant activities, to raise awareness of the safer use of connected devices and online services in order to safeguard children, and to promote their health and wellbeing.
(4) The age verification regulator may from time to time revise and re-issue the code of practice.
(5) Before issuing or reissuing the code of practice the age verification regulator must consult—
(a) the Relevant Minister;
(b) the Information Commissioner;
(c) the Scottish Ministers;
(d) the Welsh Ministers;
(e) the Northern Ireland Executive Committee;
(f) the persons specified in subsection (2) above;
(g) children;
(h) organisations and agencies working for and on behalf of children; and
(i) such other persons as the age verification regulator considers appropriate.
(6) As soon as is reasonably practicable after issuing or reissuing the code of practice the age verification regulator must lay a copy of it before—
(a) Parliament,
(b) the Scottish Parliament,
(c) the National Assembly for Wales, and
(d) the Northern Ireland Assembly.
(7) The age verification regulator must—
(a) publish any code of practice issued under subsection (1) above; and
(b) when it revises such a code, publish—
(i) a notice to that effect, and
(ii) a copy of the revised code; and
(c) when it withdraws such a code, publish a notice to that effect.
(8) The Secretary of State may by regulations make consequential provision in connection with the effective enforcement of the minimum standards in subsection (3).
(9) Regulations under subsection (8)—
(a) must be made by statutory instrument;
(b) may amend, repeal, revoke or otherwise modify the application of this Act;
(c) may make different provision for different purposes;
(d) may include incidental, supplementary, consequential, transitional, transitory or saving provision.
(10) A statutory instrument containing regulations under subsection (8) (whether alone or with other provisions) which amend, repeal or modify the application of primary legislation may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.
(11) In this Part—
“ancillary service provider” has the meaning given by section 22(6);
“child” means an individual who is less than 18 years old.
“Information Commissioner” has the meaning given by section 18 of the Freedom of Information Act 2000
“Internet service provider” has the same meaning as in section 16 of the Digital Economy Act 2010.
“Northern Ireland Executive Committee” has the meaning given by section 20 of the Northern Ireland Act 1998
“payment-service providers” has the meaning given by section 22(5) “relevant Minister” has the meaning given by section 47(1)
“relevant persons” has the meaning given by section 19(3)
“Scottish Ministers” has the meaning given by section 44(2) of the Scotland Act 1998
“Welsh Ministers” has the meaning given by section 45 of the Government of Wales Act 2006.’
This new Clause gives the power to the age verification regulator to introduce a code of practice for internet content providers. The code of practice would be based on existing industry and regulatory minimum standards (such as the BBFC classification system) and require providers to ensure that the safety and wellbeing of children is paramount in the design and delivery of their products and services.
Claire Perry
I promise this will be the last time I speak today. I am afraid I have had a slight change of heart. I tabled this amendment around many points that have been raised today on the difficulty of focusing the BBFC’s efforts on the fact that much of this traffic is not simply going to the larger websites. As we have heard, many other free sites are providing information. However, in reading my amendment, I have decided that it is almost a vote of no confidence in the BBFC’s ability to be flexible and I would therefore like to withdraw it.
Louise Haigh
New clause 12 would give the power to the age verification regulator to introduce another code of practice—the Opposition are very fond of them—for internet content providers. [Interruption.] And reviews, we are very fond of reviews.
We have made it clear throughout that we want enforcement to be as tough as possible and for all loopholes to be closed, but we also want to ensure that children are as safe in the online world as they are offline. There absolutely needs to be that parity of protection. That is one reason why we are disappointed, as I mentioned, that these measures came forward in a Digital Economy Bill, where it was incredibly difficult to look at the issues of child protection online in a thoroughly comprehensive way.
The new clause proposes that the regulator should work with industry to create a statutory code of practice, based on BBFC guidelines for rating films and the principles of the ICT Coalition for Children Online. The code would establish a set of minimum standards that would apply consistently to social networks, internet service providers, mobile telecommunication companies and other communication providers that provide the space and content where children interact online.
This is not intended to be an aggressive, regulatory process. We envisage that it will be the beginning of a much broader debate and conversation between regulators and content providers about just how we keep our children safe on the web. This debate will encompass not only ideas such as panic buttons, but education about the online world, which must run in parallel for any process to be effective.
A statutory code would work with providers to lay out how content is managed on a service and ensure that clear and transparent processes are in place to make it easy both for children and parents to report problematic content. It would also set out what providers should do to develop effective safeguarding policies—a process that the National Society for the Prevention of Cruelty to Children has supported.
As I said, this will clearly be a staged process. We envisage that in order to be effective, the development of a code of practice must involve industry, child protection organisations such as the NSPCC and, crucially, the children and families who use online services. But this code of practice would be based on existing industry and regulatory minimum standards and would require providers to ensure that the safety and wellbeing of children is paramount in the design and delivery of their products and services. The new clause would also empower the Secretary of State to make regulations to ensure effective enforcement of the minimum standards in the code of practice.
The online world can be an enormously positive force for good for our children and young people. It makes available a scale of information unimaginable before the internet existed and there is compelling evidence that that constant processing of information will lead to the most informed generation of children the world has known, but it needs to be made safe to realise that potential. The new clause would give assurance to Opposition Members that we will enable that to happen.
Matt Hancock
I am grateful to my hon. Friend the Member for Devizes for saying that she will not press her amendment and for what she said about the BBFC. Anybody reading the transcript of this debate will see the universal support for the BBFC and its work.
On the point about statutory guidance, through the UK Council for Child Internet Safety we have made guidance available to providers of social media and interactive services to encourage businesses to think about safety by design and help make platforms safer for children and young people under the age of 18. The amendment would make something similar into statutory guidance. I see where the hon. Lady is coming from, but the scale and scope of the internet makes this an unprecedented challenge. Some of the biggest sites have over 2 billion visits per year and UK audiences make up a very large proportion of those. It would be very difficult to have statutory guidance that would be policeable in any complete way. Rather than statutory guidance that could not be dealt with properly, it is better to have non-statutory guidance that we encourage people to follow.
Louise Haigh
On that point, does the Minister share my concern about the levels of discontent among those children who are trying to report online through social media? Some 26% received absolutely no response at all and of those that did receive a response, only 16% were satisfied. What more can we do to strengthen that?
Matt Hancock
I do recognise that. My point is that making non-statutory guidance statutory will not help in that space, but there is clearly much more to do. I hope that, with that assurance, my hon. Friend the Member for Devizes will withdraw the amendment.
Claire Perry
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
Louise Haigh
This is a very curious clause, which renders much of the well-informed—as the Minister said—and useful discussion that we have had today about enforcement, targeting smaller providers and restricting access across the web, completely and utterly redundant. If the clause as I read it goes forward unamended, it will provide the regulator with the ability to target only the largest providers of online pornography, perhaps even limiting its ability to target only them.
As we have discussed at length, this is an incredibly difficult area to police, which I appreciate. It is obviously going to be far easier to tackle the 50 largest providers, not least because I assume many of them are already providing some level of age verification and are probably more at the responsible end of online pornography content providers. I would remind the Committee of the Conservative party’s manifesto, which said:
“we will stop children’s exposure to harmful sexualised content online, by requiring age verification for access to all sites containing pornographic material”.
That does not make any reference to commercial providers or whether the provider has a large or small turnover, is on WordPress, Tumblr, Twitter, Facebook or Snapchat. Today’s debate has very much suggested that the role of the regulator will be to focus on those sites that are operated on a commercial basis. Given the Minister’s reluctance to implement internet service provider blocking, I do not believe that the manifesto commitment will be achieved.
Kevin Brennan
My hon. Friend is making a very interesting point. The clause refers to
“a large number of persons”
and
“a large amount of turnover”.
“A large number of persons” might be 1,000; it might be 1 million. Has there been any indication from the Government of what they mean by that?
Louise Haigh
As far as I am aware, we have had no indication from the Government at all. It would be very interesting to hear the Minister’s comments on that and on why the clause exists at all.
The Minister has been saying at length that he does not want to be too prescriptive to the regulator, but he is putting into primary legislation that the BBFC will be able to target, first and foremost, the larger providers and those that are more easy to target. I would imagine that a regulator in any regulatory system would go after the bigger and less problematic providers before those that are more difficult to tackle—no reasonable person would expect anything different. I find this confusing: why should the provision be in primary legislation, given the Minister’s overtures about not being too prescriptive and giving sufficient flexibility?
Matt Hancock
I hope I can provide some assurances to the perfectly reasonable questions from the hon. Lady. The clause is not an attempt to wriggle out of our manifesto commitment. We will deliver our manifesto commitment in full, and the Bill does that.
The clause provides discretion for the regulator to exercise its functions in a targeted way. It is needed so that the regulator does not break its statutory duties if it goes after the big providers first. As it set out in evidence, the regulator wants to go for the big providers first, and then move on to the smaller and then move on to the next. I want to allow for that to happen, so we need a clause such as this.
Thangam Debbonaire
If I am not mistaken, the Minister just said “in a targeted way”. I fail to understand how phrases such as “a large number” or “a large amount” are in any way targeted.
Matt Hancock
The clause gives discretion to the regulator. If the regulator went after the big porn sites first, it would not have the vires to distinguish and go after those who do the most harm earliest. It is important that it has the ability to make the legislation work in practice.
Kevin Brennan
That sounds pretty thin. It is almost like saying that the police would be acting in an ultra vires manner if they did not go after murderers ahead of shoplifters in terms of devoting their resources to their duties. Is that really the reason why this provision is in the Bill? If it is, it is a novel innovation by the Minister that is not often seen in legislation setting up a service.
Matt Hancock
As I have just mentioned in the discussion on the previous clause, some of the biggest sites on the internet have more than 2 billion visits a year. As the hon. Member for Sheffield, Heeley said, many sites are involved. Allowing discretion for a targeted approach is important. The clause also allows the regulator to
“carry out, commission or support…research…for the purposes of exercising, or considering whether to exercise”
the powers. That is important, too, because we want the regulator to have the power to conduct research to inform its views. Both those things are important parts of the execution of age verification.
Louise Haigh
The Minister said just now that the clause will stop the BBFC—we are to assume that it will become the age verification regulator—from being in breach of its statutory duties if it goes after the largest pornography providers first. Putting aside the analogy that my hon. Friend the Member for Cardiff West made, which was absolutely right, is it not the case that the age verification regulator does not have many statutory duties? That was the whole purpose behind the amendments of the hon. Member for Devizes. The regulator is required only to—well, it is not required to; it may—give notice to any payment services or ancillary service provider. I fail to see how targeting any content provider first, last or in any other way would put the regulator in breach of any requirement under the Bill.
Matt Hancock
I want to make it clear that it can target in order to work as effectively and as soon as it can. I am slightly surprised to find Opposition Members against that principle.
Claire Perry
Part of my reason for withdrawing my amendment was that I was encouraged by the word “principally” on line 35 of this page. It is not a restriction; the regulator certainly has the power under the clause to go after it. My issue is that there is a worry, although not with this regulator, that success will be defined by the number of websites or the number of enforcement notices issued. It is not about the number of websites; it is about the number of eyeballs going to them, so it is absolutely right that the regulator focuses on larger sites first. The wording of the Bill allows the regulator discretion to go after any site.
Matt Hancock
On the basis that I agree with that explanation also, I commend the clause to the Committee.
Question put, That the clause stand part of the Bill.
Matt Hancock
I will speak to the clause, just in case we have an unexpected hiccup. Clause 24 sets out requirements to apply where the regulator wishes to seek information or send a notice of infringement to an infringing website, payment services provider or ancillary service provider. The designation is to do so by post or email. We will work with the BBFC in its new role to ensure that the system is effective. Due to the nature of the sector, of course there will be times when notices are not seen or purposefully ignored. In the case of unco-operative non-compliant sites, the clause will allow us to disrupt their business regardless through the withdrawal of supporting services by payment and ancillary providers. I commend the clause to the Committee.
Clause 24 accordingly ordered to stand part of the Bill.
Clause 25 ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned. —(Graham Stuart.)
Neighbourhood Planning Bill (Third sitting)
Thursday 20th October 2016
(7 years, 6 months ago)
Public Bill CommitteesRead Full debate Neighbourhood Planning Act 2017 View all Neighbourhood Planning Act 2017 Debates Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 20 October 2016 - (20 Oct 2016)
The Chair
We now begin line-by-line consideration of the Bill.
The selection list for today’s sittings is available in the room. It shows how the selected amendments have been grouped together for debate. Amendments grouped together are generally on the same or a similar issue. The Member who has put his or her name to the leading amendment in a group is called to speak first; other Members are then free to catch my eye to speak on all or any of the amendments in that group. A Member may speak more than once in a single debate.
I will work on the assumption that the Minister wishes the Committee to reach a decision on all Government amendments. Please note that decisions on amendments do not take place in the order in which they are debated, but in the order in which they appear on the amendment paper. In other words, debate occurs according to the selection of groupings list, but decisions are taken when we come to the clause that the amendment affects. I hope that is helpful.
I will use my discretion to decide whether to allow a separate stand part debate on individual clauses and schedules following the debates on the relevant amendments.
Jim McMahon (Oldham West and Royton) (Lab)
On a point of order, Mr McCabe. I hope you will bear with me when I ask some beginner’s questions, but this is the first Committee in which I have been on the Front Bench. The technical consultation on the Bill finished yesterday, but the public consultation does not finish until 2 November. We are having our debates on the Bill in the absence of that feedback from the public, or from the professionals who took part in the technical consultation. Is that usual? If so, how do we ensure that the comments in the consultation are fed back into the process?
The Chair
The Minister will have easily heard your comments. It is normal for the usual channels to have agreed the scheduling of the Committee, but we note the point that has been made, and the Minister has heard it and will do what he can to assist.
Dr Roberta Blackman-Woods (City of Durham) (Lab)
Further to that point of order, Mr McCabe. if there are any additional documents relevant to the deliberations of the Committee, will the Minister ensure that Committee members are aware of them, so that we do not have to go looking for them on the website of the Department for Communities and Local Government?
The Chair
The Minister will have heard those remarks, and he is nodding to indicate that he will do his best to assist.
Clause 1
Duty to have regard to post-examination neighbourhood development plan
Dr Blackman-Woods
I beg to move amendment 4, in clause 1, page 1, line 11, at end insert—
“and insofar as it is consistent with the relevant local plan.”
This amendment ensures that neighbourhood plans are not considered if they are inconsistent with local plans.
The Chair
With this it will be convenient to discuss the following:
Amendment 5, in clause 1, page 1, line 11, at end insert—
“and insofar as it is consistent with the National Planning Policy Framework and the National Planning Practice Guidance.”
This amendment ensures that neighbourhood plans are not considered if they are incompatible with the National Planning Policy Framework or the National Planning Practice Guidance.
Amendment 3, in clause 1, page 1, line 22, at end insert—
“(c) if it has been examined by an independent examiner who is registered with the Royal Town Planning Institute.”
This amendment ensures that the examination of a neighbourhood plan is conducted by an RTPI registered examiner.
New clause 1—Approval of draft-neighbourhood development plans by referendum—
(1) Schedule 4B of the Town and Country Planning Act is amended as follows—
(2) After paragraph (2) insert—
“(3) The outcome of such a referendum shall only be valid if the turnout is equal to or greater than 40%.”
Dr Blackman-Woods
It is a pleasure to serve under your chairmanship, Mr McCabe.
As the Minister knows from our discussions on Tuesday, we do not see neighbourhood planning and the provisions relating to it as the most controversial aspect of the Bill. Nevertheless, we have a couple of questions embodied in the amendments on which we would like some clarification from the Minister.
Amendment 4 seeks to amend the clause to ensure that the local authority will only have to have regard to neighbourhood plans when they are found to be consistent with the local plan. I am sure that in his response the Minister will say that it is already enshrined in legislation that they have to pay attention to the local plan, but we are seeking clarity on at what stage that needs to happen.
Let me start by saying that we are very supportive of neighbourhood plans and the measures in the Bill to make them more efficient in delivering housing, delivering it where local people want it and having it underpinned by the relevant infrastructure. We feel that planning is always more successful when people feel a part of it, rather than planning being something that is done to them and imposed from above. This point was made powerfully on Tuesday by the National Association of Local Councils, which also reminded the Committee that during the passage of the Bill we probably need to push for greater clarity on the exact role of neighbourhood plans and get some statements about the importance and significance attached to them and, in particular, their relationship to local plans.
The amendment would ensure that neighbourhood plans are only considered if they are in line with the overall strategic aims and visions within a local plan. As we are all no doubt aware, local plans set out a framework for the future development of an area, addressing needs and opportunities relating not only to housing, but to the local economy, community facilities and infrastructure. We are specifically asking the Minister to what extent neighbourhood plans are then being written to address not only the broader strategic aims of the local plan, but what it says about community facilities and infrastructure—that is, if it does. It might not, and if not, is the Minister clear that there is then a key role for the neighbourhood plan to ensure that those less strategic issues are addressed for the locality?
An underlying purpose of the amendment is to try and tease out from the Minister whether he thinks neighbourhood plans could, in fact, be a building block for local plans. There are distinct advantages for planning at a community level for housing supply, if that incorporates real local knowledge and that local knowledge is then put into a wider picture that is able to address local authority-wide needs. Hugh Ellis from the Town and Country Planning Association spoke on Tuesday about the real advantages that could have, saying:
“Neighbourhood plans are great at articulating community aspiration inside the local plan framework. When both work together very powerfully, that can be a very strong framework for a community.”––[Official Report, Neighbourhood Planning Public Bill Committee, 18 October 2016; c. 32, Q50.]
Ruth Reed from RIBA said it would be better for local and neighbourhood plans to be “in sync” to
“ensure coherence and strategy across a local authority to provide housing where it is needed.”––[Official Report, Neighbourhood Planning Public Bill Committee, 18 October 2016; c. 43, Q71.]
Local plans are also only adopted after public consultation and, in my experience, usually very lengthy—in fact, often more than one—public inquiries. As the Minister and all on this Committee will know, they do have considerable weight. It would be very helpful for communities to be able to feed in their vision for development at an early stage in that local plan-making project and process. We also do not want to find ourselves in a situation where strengthened neighbourhood plans are undermining local plans, leading to lots of competing visions of what an area could look like or deliver. Again, we feel that being very clear about the degree to which they have to follow a local plan might help to iron out some of those possible conflicts. As the Local Government Association has pointed out,
“It is important that any proposals do not have the unintended consequence of undermining the ability of a local planning authority to meet the wider strategic objectives set out in an emerging or adopted Local Plan”.
According to the Department’s own figures, about 200 neighbourhood plans that have progressed to the referendum stage have been approved by voters; I suspect the figure is a lot higher now. That shows a really positive reception for neighbourhood planning. I pay tribute to the Minister and his Department for bringing the whole concept forward. However, given the number of neighbourhood plans now being considered—I think it is a few thousand—and the way the Government rightly want to extend them, it seems likely they could end up competing with one another. We are trying to ensure, through the amendment, that that does not happen.
The guidance tells us that it is very important for a neighbourhood plan or order to follow a local plan, but they are not often tested against policies in an emerging plan. I will give an example from my constituency, where we are in precisely this situation, which is partly what prompted my question. A local plan went through a public inquiry and was thrown out by the inspector. The authority was directed to go back to first base in terms of drawing up the local plan, so it is out to consultation at the moment on some of the underpinning objectives, but a number of neighbourhood plans are about to go to referendums. Will those plans simply rely on saved local policies? Will they have to look at the local plan that was thrown out, or will they be tested against the underpinning objectives, which are quite wide-ranging at this stage? It would be interesting to hear from the Minister on that point. There is a need for further clarity, particularly with regard to the stage that the local plan is at.
These are very much probing amendments, as I am sure Committee members have determined. Amendment 5 would mean the local authority need not have regard to the local plan, unless it is consistent with the national planning policy framework and national planning policy guidance. This is a straightforward amendment. We should seek to put best practice at the forefront of neighbourhood planning by requiring that the plans are compatible with the NPPF and any relevant guidance.
Kevin Hollinrake (Thirsk and Malton) (Con)
Is the hon. Lady aware that paragraph 16 of the NPPF states that neighbourhoods should
“develop plans that support the strategic development needs set out in Local Plans”?
Is that not quite clear?
Dr Blackman-Woods
I am trying to tease out the extent to which the Minister thinks it is important right at the outset for neighbourhood plans to tell us how they are addressing the basic thrust of the NPPF and any relevant policies in it and taking on board guidance that underpins some of those policies. I do not think the issue of guidance is quite so clear. Perhaps it is generally assumed that the NPPF would be followed but not to the degree that planning guidance would have to be taken on board.
Jim McMahon
This is a very important point because the provision must not be seen as a way of paying lip service to local opinion. People spend a lot of time trying to work up neighbourhood plans, which go through a massive amount of consultation, and they go round the area with clipboards, but when it comes down to it they are not treated with seriousness in the process. Having this quality assurance would help that.
Dr Blackman-Woods
My hon. Friend makes an excellent point. Public confidence in the system is important.
Just to show that I looked, we found that national planning policy guidance includes guidance on the independent examiner’s role, how a neighbourhood plan or order is examined, how the public can make their views known to the independent examiner, who can speak if a public hearing is held and whether the examiner considers the referendum area to be part of their report. However, there is nothing at all—not in that section anyway—about who the independent examiner should be or what qualifications they might be expected to have.
The reason the amendment specifies the RTPI is that it has a mark of quality attached to it, and has been clear about the principles to which examiners should work. There are five core principles. I think this might be helpful, and if the Minister does not want to include it on the face of the Bill, it might be put into regulations.
It is hard to disagree with any of the five core principles, or to suggest a reason why they should not apply to examiners. Those subject to them must act with competence, honesty and integrity; and they must use independent professional judgement. That is particularly important, because we want the examination to be seen as professional. After all, the plans are very important. They should probably have more importance in the planning system. We want to make sure that they will be professionally examined. Examiners must apply due care and diligence; they must act within principles of equality and respect; and obviously, they must exhibit professional behaviour at all times.
That set of core principles seems to me to be very helpful. The RTPI deals with professional planners all the time, and it has provided more detail about what the principles mean with respect to the role of an inspector. I shall not go through them all, because there are too many, but I thought it might be worth looking at a few that seem particularly important.
“Members must take all reasonable steps to maintain their professional competence”.
That seems fairly obvious; we want people who are to examine neighbourhood plans to deal with the planning system as it currently is—not as it was when they trained, which could have been some time ago.
They must also
“take all reasonable steps to ensure that their private, personal, political and financial interests do not conflict with their professional duties.”
Again, that is important. I wonder whether the current system pays attention to any financial, personal, political or other conflict of interest, particularly in relation to examiners. It may, and I hope that the Minister can reassure us on that point, but I think my constituents would want to know that people with a conflict of interest were screened out before the point at which they would get to examine a neighbourhood plan. It is not clear to me at what stage in the current process that happens, or what questions are asked during the appointment process, to ascertain whether there is a conflict of interest.
“Members must not offer or accept inducements, financial or otherwise, to influence a decision or professional point of view”.
That is an issue that councillors are used to having to deal with; but again, it has not been made clear. I do not suggest for a minute that any examiner would have been subject to the taking of financial inducements, or anything of the kind. I just do not know, at this stage, what process there is in place to ensure that that does not happen, or what oversight there is of the examination process. Also, examiners should not disclose to employers or clients what is happening in the neighbourhood plan where it would be to their advantage.
Dr Blackman-Woods
I am not trying to suggest there has been a problem in the past, but we have neighbourhood planning provisions before us in a Bill that seeks to strengthen and streamline the process of neighbourhood planning. It is the Opposition’s job to seek ways of improving the Bill and one way might be to give greater clarity and confidence to the public and all our constituents that neighbourhood plans are being effectively and efficiently examined. That provides more confidence in the process, which we are incredibly supportive of.
Jim McMahon
I actually think—I am sure my hon. Friend will agree—this is a gift for the Minister. Imagine a situation in which there is no quality assurance in place and no mechanism built into the membership organisation to deal with complaints. Where else would the complaints come but across our desks?
Dr Blackman-Woods
I am grateful to my hon. Friend for that intervention. It drives home the point we are making. We have tried to be incredibly helpful in tabling the amendment. The point has not been raised only by Opposition Members. As I pointed out earlier, it was raised by people who gave evidence to the Committee. It is important as a matter of public record that we are clear about how the plans will be examined and about the qualifications of the examiners. As my hon. Friend said, the RTPI has given a gift to the Minister by saying there is already a code of conduct and already professional guidance in place, so why does not the Minister simply adopt it and then we will all have better reassurances about the qualifications—[Interruption.] I am sure the hon. Member for North West Hampshire can intervene on me if he wishes to do so, and I will seek to answer his question.
If I may, I will move on to new clause 1. Although we have tabled it as a new clause, it is really just a further probing amendment to find out whether the Minister thinks there should be a threshold for the number of electors who will turn up to vote for a neighbourhood plan. Again, I am not trying to make the process of having a neighbourhood plan more difficult, because we are terribly supportive of neighbourhood plans and want as many of them in place as possible.
In fact, because the Minister is extremely good at reading the Lyons report, he will know that we had a whole section in that report about local plan-making and how we might marry up neighbourhood plans with the local plan-making system. That was not to take powers away from local neighbourhoods, but to have these as an initial building block for local plans so that local plans are not something that is seen to be imposed on a local community, but are something that develops organically from looking at a whole range of neighbourhood plans. He knows that the Lyons report also talked about how we could fund that, because if we are going to adopt a system where neighbourhood plans are the building blocks of local plans, resource will clearly need to be put into neighbourhood plans.
If I may again use the example of my constituency, we are now back at the beginning, more or less, of our local plan-making process. I think I am right in saying that process started in 2007; if I was being really generous to the local authority I might say 2008, but really we had preliminary discussions in 2007. Here we are in 2016, I think 11 rounds of consultation later, and we still have no local plan in place. In fact, we would be lucky to get a local plan in place in the next couple of years.
John Mann (Bassetlaw) (Lab)
I thank my hon. Friend for giving way. Does she agree with my research that shows that 95% of local plans had to be stopped and recreated after the absurdity of the coalition Government’s decision of March 2013, when they required them all to have to consult adjoining authorities? Ninety-five per cent. have had to be recreated, creating a huge delay and uncertainty in house building and the provision of other amenities.
Dr Blackman-Woods
As always, my hon. Friend makes a very interesting point. We did have a brief exchange with the Minister on Tuesday about the fact that the duty to co-operate has not worked in practice, and the real need for a different set of provisions. I know the Minister is seeking to address that at a later stage in the Bill’s passage, so we look forward to seeing the provisions that will address that aspect of local plan-making and how the duty to co-operate can be made to work more effectively in practice. My hon. Friend has raised a very valid point.
I think we are on our 11th round of consultation, and there will be further rounds before we actually get a local plan in place. Huge resource is then put into the consultation, which has gone on for many years. The huge amount of documentation that goes with each of those public consultations has a resource attached to it. I should have thought that it was possible to have a system of local plan-making that was very streamlined and did not require the huge amount of documentation that it currently does; that would free up resources. One of the things we argued in Lyons was that those resources could then be used to effectively support neighbourhoods and local authorities to use neighbourhood plans as the building block for their local plans.
I am coming to my argument about new clause 1. If these plans are to have considerable weight attached to them, and if they are going to be, as they currently are, part of the local plan once they go through a referendum and a material consideration, should there be a minimum level of buy-in from the local community, in terms of turning out to vote? I am sure the Minister will say that the votes for these neighbourhood plans are extraordinary, that 89% or 90% of the people who turn out regularly vote for the neighbourhood plan, that they understand why it is important to their community and that a lot of them will have turned up to consultation events.
It is heartening that so many of the plans get that percentage of people supporting them. It is actually quite rare for them to be turned down or to have fairly low percentages. At the moment we are at about a 32.4% turnout from the local community. I am sure all of us here think that is actually not bad when compared with the turnout for some local council elections, but if we are talking about a plan that will have a very strong influence on what happens in the neighbourhood area for perhaps 10 or 15 years or even longer, I suggest there might need to be a 40% threshold, but that could be lower or higher.
The Minister for Housing and Planning (Gavin Barwell)
I am interested in the argument the hon. Lady is making. My local authority is going through the process of agreeing its local plan at the moment, so I share her pain. Do the Opposition think the same arguments should apply to local plans? Should the people of Croydon have the chance to vote in a referendum on the local plan that Croydon Council is proposing?
Dr Blackman-Woods
The Minister makes an interesting point. It is something I will mull over and think about. Does the Minister think it is important to have a particular threshold? Again, that point is not being put forward only by the Opposition. It was also put forward by the BPF, which said:
“As neighbourhood plans affect large sectors of the community, a minimum turnout would ensure that what is to become a development plan document as part of the Local Development Framework is agreed and accepted by a sufficient majority—and would also help ensure the implementation of neighbourhood plans.”
That is an important point.
John Mann
I am glad this is a probing new clause. The British Property Federation would say they, wouldn’t they? Is there not a danger that a threshold will shift power to middle-class communities and away from working-class communities, where people work shifts and where there is a more transient population because of private rented accommodation? Turnouts have traditionally and historically been low in all elections in those communities through no fault of the local people. They have a desire to vote, as we saw in the EU referendum, but people are having to work ridiculously long hours to make a living. Indeed, turnover in property is hugely large. Are those not the dangers of having a threshold? Any system must not discriminate against working-class communities.
Dr Blackman-Woods
I am sure my hon. Friend will be delighted to note that an amendment has been tabled for a later discussion in the Committee on how we ensure that disadvantaged communities are not discriminated against.
Oliver Colvile (Plymouth, Sutton and Devonport) (Con)
Will the hon. Lady give way?
Dr Blackman-Woods
I will give way to the hon. Gentleman in just a moment, after I have dealt with the intervention by my hon. Friend the Member for Bassetlaw.
We should not abandon the idea of a threshold just because it might be more difficult for some people to attend a polling station or another building to register a vote. We all want to ensure that as many people as possible are engaged in the neighbourhood planning process and, indeed, in voting more generally—but I will stick to neighbourhood plans, to avoid getting a direction from the Chair. Polling over a given period of time, and good use of postal votes or electronic voting are among the many different mechanisms that could be applied locally to ensure that the threshold is reached, and that people really are engaged in the neighbourhood planning process.
Jim McMahon
That is the crux of the issue. The gift of a neighbourhood plan is that it binds a local community together to agree collectively what is best for that community. The benefit of a threshold is that a bar is put in place to say, “You have to be able to demonstrate that the plan has the community support in place.” If one of the arguments is that disadvantaged communities are disfranchised from such processes in a way that middle-class communities are not, a threshold would place a greater onus on ensuring that people are included in the process and in more active ways.
Dr Blackman-Woods
My hon. Friend makes an excellent point, and one that I was going to come to: a minimum threshold could ensure that additional work had to be put in to get a wider, more representative group coming forward and voting for a plan. I was going to draw the Minister’s attention to the activities of Planning Aid England, which works a great deal with disadvantaged communities, trying to get them engaged in the planning process. If the Minister was keen to put a minimum threshold in place, he might want to think about how Planning Aid could be supported, in particular to work with disadvantaged communities to ensure not only that people turn up to vote for the neighbourhood plan, but that they are fully engaged in the plan-making process itself.
When we discuss the later amendment, we will see that analysis of the plans so far indicates that—this is the point that my hon. Friend the Member for Bassetlaw was making earlier—they have a bias towards more middle-class communities.
Oliver Colvile
Thank you, Mr McCabe, for allowing me to serve under your chairmanship. The point that I would make is that if we are going to be doing public consultation—which is incredibly important, and I have made that quite clear—we need to use Planning for Real weekends, so that members of the local community may have the opportunity to come in, physically, and say what they are expecting from the whole thing, although postal and proxy votes can be used, too, and a lot of people do so.
Dr Blackman-Woods
The hon. Gentleman makes an excellent point. As well as Planning Aid, I should have mentioned Planning for Real, which also does amazing work in communities getting people to engage with the neighbourhood planning process. Such work could be continued to encourage people to turn up and vote in the decision whether to adopt the neighbourhood plan.
As I said at the outset of our debate on this group of amendments, they are probing ones, intended to get greater clarity from the Minister about the whole range of issues that we have raised. I look forward to hearing what he has to say.
Kit Malthouse
I realise that the hon. Member for City of Durham is benignly motivated, but I had a horrible feeling that she might have been seized by Stockholm syndrome with regard to the planning industry. She referred quite a lot to what the planning industry had to say, but I think she misunderstands the great advantage of neighbourhood plans. They are organic community creations outside the accepted rules, shibboleths, morals and principles of the planning system. She seems in her amendments to be trying to put barriers and bureaucracy into neighbourhood plans, which they are specifically designed to overcome.
There are already safeguards in the neighbourhood planning process. When a neighbourhood plan is approved by referendum, it must go to the local council where there is democratic oversight; it must be adopted as part of the local plan before it is accepted completely; and it must be examined. By the way, I am not surprised the RTPI was willing selflessly to put itself forward as the monopoly examiners of plans for a fee, adding yet more cost to the process.
It strikes me that the hon. Lady is creating bureaucracy in the system—
Dr Blackman-Woods
May I say at the outset that I do not accept the hon. Gentleman’s characterisation of what I was seeking to do? I was seeking to get further clarity in the Minister’s legislation, not to put prescription in place. As far as I can recall, I did not mention fees for the RTPI.
Kit Malthouse
No, I accept what the hon. Lady says and I apologise. She said these are probing amendments and I was being slightly flippant, but I doubt very much whether a member of the RTPI would do the examination free. The point is that if you restrict it to just them, I imagine the fees might rise slightly. Basic economics is that the smaller the pool of people, the more fees will rise.
I acknowledged that the amendments were probing, but I am not sure what problem the hon. Lady is trying to solve. Thousands of neighbourhood plans have come forward and there are two major issues, which the Bill solves. The first is more assistance from local authorities, because obviously the plans have to conform with the local plan and they are often developed in parallel. Certainly mine were developed in parallel with the local plan. There is quite a lot of iterative process between the two and the Bill allows that. Secondly, if they are going to do this work, there should be protection in the planning system, which is also in the Bill.
Beyond that, I fear the hon. Lady is trying to create with the amendments—I accept they are probing—a sort of recreation of the whole planning system on a local scale, instead of realising that the process is organic and should be exactly that without as much restriction as the formal planning and plan development process has, notwithstanding the fact that there will be supervision by the local council.
Jim McMahon
I cannot understand why the hon. Gentleman would want to water down the integrity of this process. If it is to have any credibility in the system, it must be tested in the system. We do not want a neighbourhood plan that does not stand that test and is treated in a second-rate way.
I also cannot understand the point about levying a fee. People do not generally work for free in their profession. Someone will want to be paid as part of that process. All that my hon. Friend the Member for City of Durham is trying to do in the amendment, which is open to debate, is to make sure that a standard is applied and it provides that standard. If this is not accepted, what is the alternative to provide that surety?
Kit Malthouse
This may be a philosophical difference between us. I am naturally inclined to deregulation, whereas this is obviously an attempt to impose regulation on the neighbourhood planning process. In my experience, regulation generally gets in the way of speed and efficiency, and frankly of people even bothering to get involved.
In my neighbourhood there has been huge enthusiasm, wide acceptance and a recognition that there are two issues—first, more assistance from the local authority and secondly, more regard from the planning system as it is. It would be a mistake for us to try in the Bill to reproduce the same level of planning regulation that exists at local authority level for what is, frankly, often a group of volunteers who are trying to put together an imaginative plan for their neighbourhood. They should be left with as little restriction as possible to do that as far as they can, and when they realise their plan needs to be in conformity with the local plan and it has to go to democratic approval, to modify it accordingly. If we are to have acceptance, we must do it that way. Once we start putting rules and regulations and hurdles in their way, I am afraid the enthusiasm will drop away.
I would not support a 40% threshold. As the hon. Member for Bassetlaw said, there lots of reasons why not, but we do not apply that for any other election in this country, including referendums and elections for police and crime commissioners. There is no other election or exercise of the democratic process in this country where we do that and I do not think we should start now.
John Mann
It is always a pleasure—actually it is the first time, but it always will be a pleasure—to be given the opportunity by the Whips to serve under your chairing, Mr McCabe. I thank the Whips, although I am not sure that those on the Labour Front Bench will necessarily thank them, for putting me on this Bill Committee.
I will first deal with the question of thresholds. It is a good idea but I would suggest that the wrong threshold has been suggested, so I am glad that the new clause is a probing one. When I was first elected as a councillor, I got 86% of the vote on a 40% turnout. That means that I got a higher share of the electorate than the majority of MPs elected in the last general election. Given that, who would be the more statistically valid representative?
The interesting question is whether a threshold should be based on the vote. Should someone on a low turnout get through on 50% to 49%? That would suggest that there is quite a split in the community. There would be a coherent case for suggesting that the neighbourhood development plan needs to have a threshold of a majority for it to be seen to be coherent across a community. I am not aware of anywhere, certainly not in my area, where there is that sort of division, but such situations could exist.
The Secretary of State said that too many people
“object to houses being built next to us”
and that we are going to have to change that attitude. He was, rightly, very outspoken in Bentley in Redditch in 2015 against the proposals for 2,800 houses there, as he was in Hagley in 2012. He, like me, has supported the local people against the planning system and the way it works, but that does not coincide with his commentary at his party’s conference.
In Croydon, one local Member of Parliament talked of the overwhelming opposition to housing in Shirley, with the Save Shirley campaign. He said that the proposals to build there were “a pile of nonsense.” Clearly, there were divisions in Croydon between people who wanted to build in one place and those who wanted to build in another. Some people did not want the development in one place; others did not want it in another.
The Opposition have proposed a threshold but, in the Croydon example, a threshold of how many people vote for a neighbourhood development plan or, indeed, for a local plan would be a good idea. Otherwise, those supporting the residents of Shirley might lose out. They might be very angry at losing out and vent their anger against their local MP.
Chris Philp (Croydon South) (Con)
If the hon. Gentleman is casting aspersions on my constituency neighbour for his Save Shirley campaign, may I point out his outstanding record of supporting building in the town centre?
What the hon. Member for Bassetlaw proposes by way of a threshold effectively gives weight to the opinions of people who do not bother to vote. Does he not agree that giving weight to the opinions of those who cannot even be bothered to vote in any election, including the one we are discussing, would not be appropriate?
John Mann
I am merely throwing into the mix for consideration the suggestion that the Government may wish to come back with an amendment, in the spirit proposed by Her Majesty’s Opposition, involving a threshold determined not by the percentage of the electorate, but by a percentage threshold of the majority in the vote. That would help to avoid a conflict situation and lead to more local negotiation in places such as Shirley.
There are lots of places like Shirley. Ministers do intervene. They are intervening in Bradford, for example. The hon. Member for Shipley (Philip Davies) was delighted, when the Minister was intervening there, to object to house building. There will always be people who object to house building next to them, and there is nothing wrong with that. If there is a bad planning application, I can fill a public hall at any time. I get hundreds and hundreds of people there very regularly. Indeed, I have a meeting tomorrow.
The Chair
Mr Mann, may I gently suggest that you come a bit closer to the subject under discussion?
John Mann
I am suitably admonished, Mr McCabe, but this is a way of getting directly into the amendments. Having spoken to new clause 1 very precisely, I am now speaking to amendments 4 and 5 very precisely, because these amendments explicitly probe the issue of conflict between the local plan and the neighbourhood plan. In other words, one set of people want to do one thing, but another set may want to do something else.
Dr Blackman-Woods
My hon. Friend is making a powerful case in support of neighbourhood planning. Does he agree that the success of neighbourhood planning, which Labour Members welcome and applaud, is precisely what makes it such a good building block for local plans?
John Mann
It is absolutely a building block. We will come at a later stage to how we deal with less affluent communities, which is important, but when it comes to all neighbourhood plans, there is a great opportunity here for the Minister. He will need to come back with a bit more, otherwise the certainty is not there. One likes certainty in life. We know where we stand with a local plan. We would know where we stand with a neighbourhood plan. So a neighbourhood plan voted through where there is house building built in ought to be the certainty for the foreseeable future, which, in planning terms, seems to be 15 years. Such certainty seems reasonable enough to me. If the Minister could deliver on that, when I go back to my local communities he will find that there is even more enthusiasm. I will be able to get the urban communities saying, “This is a great idea, and by the way we will have more housing. We will change this and we will change that. We will create more open spaces. We will want space for our community facilities.”
Large numbers will participate in the planning debate and decision making, given the chance. The Minister has the proof already. Let us unleash more of this local empowerment. He will then be a very popular Minister.
Jim McMahon
This has been a fascinating debate. We are all localists. We all come from our communities—that is why we are here in the first place—and the spirit of the Bill embraces that. We are fine-tuning the Bill to ensure it works in practice. We do not want to set people up to be disappointed. We do not want them to be given this power, to be told that after years of having things done to them they are suddenly empowered, and then to go through the process of having an application submitted only for it to be completely against what they want. That is really important. In the local context of Greater Manchester, we have got the spatial framework. Within that process there is a call for sites, so developers and landowners put sites forward as part of the mix.
A member of the public has the local plan that has been agreed, but now they also have in consultation a strategic plan with sites that have been put forward by developers and landowners, and not necessarily with the agreement of the local authority. However, that causes a lot of tension because some of the sites are controversial. Landowners do not always take into account local opinion before they submit sites to get the development value that could be achieved afterwards. In an odd way, that could be the thing that inspires the local community to come together. Instead of having something done to us, let us get together and design what we want our community to be. We could think further about design quality, open space provision and how a community works more generally.
I will certainly be a champion for this type of planning in my local community. Let us be honest: in deprived, working-class communities, people have for decades and generations been told, “This is what you are getting, whether you like it or not.” I see this legislation as a route for empowering people to have far more control over their lives and communities, so it is welcome. However, let us not lose an opportunity to make sure that this is a really decent piece of legislation and a really decent process that people can feel empowered by. When a planning application goes through the system and is tested—when it is submitted and goes for approval—it is important that it has enough weight to ensure that the professional planners, and those sitting on the planning committee if it goes for determination, treat it with the respect it deserves. That is in the spirit of today’s amendment and the amendments we will discuss at a later date.
I want to return to the point I made earlier about the consultation process. If we say that we want to put the community at the heart of the process and have a community voice to make people feel more empowered, it seems odd that the public consultation on this issue does not close until 2 November, because here we are determining the legislation that will by and large have been debated before that date. Can the Minister tell us why that has not been sequenced in the right way? How can we ensure that the responses to the consultation are fed in? If significant issues come up in that process, what mechanism does Parliament have to make sure that those are picked up at the appropriate time?
Gavin Barwell
It is a pleasure to serve for the first time under your chairmanship, Mr McCabe. With your permission, I will start by responding briefly to the point of order raised by the hon. Member for Oldham West and Royton so that I can provide some reassurance. I have worked very hard to try to ensure that Parliament has as much of the material relating to the Bill as possible, and as early as possible in the process. There was an earlier consultation on neighbourhood planning this year, our response to which was published at the same time as the Bill. This is a technical consultation about how we are going to implement some of these provisions.
The assurance we have given the House, and the business managers more widely, is that when the Bill gets to the Lords stages we intend to have the draft regulations or policy statements published. I agree with the hon. Member for Oldham West and Royton that in an ideal world all this would be ready when a Bill first comes to Parliament, but if we look historically we see that is the case for virtually no Bills. I am keen to learn the lessons of the Housing and Planning Act, which received Royal Assent earlier this year, and get the material out as early as possible and give people as much opportunity as possible to scrutinise the measures.
Jim McMahon
Just to clarify, there are two separate consultations. There is a technical consultation that closed on 19 October, and there is a wider public consultation on the pre-condition element that closes in November. I would not necessarily consider the second one to be just a technical consultation. I would not want it to be lost in the mix and not treated with importance, because residents and community organisations will respond to it expecting it to be treated appropriately.
Gavin Barwell
The intention behind that consultation paper was to be helpful to Parliament and wider stakeholders interested in these issues. When we announced the Bill in the Queen’s Speech and set out the broad measures that were going to be in it, there was concern about what the impact of these reforms to planning conditions might have. Our feeling was that publishing a consultation paper setting out exactly how the Secretary of State might use these powers, if the Bill receives Royal Assent, would be helpful. The intention was to try to assist.
I am grateful to all hon. Members who have contributed to the debate, which has raised important areas about neighbourhood plans, their relationship with local plans and national planning policy, the examination process and the extent of the democratic mandate they receive through a referendum. Before addressing each amendment, I would like to make a few general comments.
As the Committee will know, the role that communities play in planning has been revolutionised, at least in certain parts of the country, by the neighbourhood planning process. More than 200 communities have recognised the opportunity to shape the development of their area. The numbers speak for themselves. Nearly 2,000 communities have started the process, as the hon. Member for City of Durham said, in areas that cover nearly 10 million people in England, and 240 referendums have been held, all of which have been successful. The Government are hugely proud of neighbourhood planning and of the communities that have taken up the opportunities we have provided for them. We have been clear that we want an effective system that will inspire communities, as the hon. Member for Bassetlaw said, and give them confidence that their views matter, while delivering the growth and additional housing we need.
Clause 1 helps to achieve that. I accept the point made by the hon. Member for Bassetlaw that it is not a solution on its own and that more action will be needed. The White Paper will set out some accompanying policy changes that will try to address the issue. The clause inserts a new paragraph and new subsections (3B) and (3C) into section 70 of the Town and Country Planning Act 1990. It will require decision makers to have regard to post-examination neighbourhood plans where the decision has been made by the local planning authority, or in certain cases the Secretary of the State, that the plan should go to a referendum. We might call that the Malthouse clause, because it originates from an issue with the neighbourhood plan in Oakley and Deane, in the constituency of my hon. Friend the Member for North West Hampshire. Essentially, an appeal was granted just before the referendum was going to be held.
Gavin Barwell
The plan had therefore been through the examination. My hon. Friend’s lobbying for his community led the Government to reflect and then bring forward this clause.
The key point is the one made by the hon. Member for Bassetlaw: in communities that produce neighbourhood plans, people give a lot of time and effort to produce them, and therefore we need to ensure that work is recognised in the system at the earliest possible opportunity. We are making it clear in legislation—not just through planning guidance—that regard should be given to advanced neighbourhood plans, so communities can have confidence that their plans will get proper consideration in planning decisions, where the plan is material to the application.
Turning to the amendments tabled by the hon. Member for City of Durham, I hope that I can reassure all hon. Members that the Bill—this includes the Government amendments on local plans, which I have written to Committee members about this morning—does not alter the local plan-led system, which I am sure we all support. We have been clear from the start that the neighbourhood’s ambition should be aligned with the strategic needs and priorities of the wider local area, but that outside those strategic elements neighbourhood plans are able to shape and direct sustainable development in their area.
One of the tests that an advanced plan will have met, once it has gone through its examination, is whether its policies are in general conformity with the strategic policies of the relevant local plan. That will have been tested both by the independent person appointed to examine the plan and by the local planning authority. That is set out in schedule 4B to the Town and Country Planning Act 1990.
Dr Blackman-Woods
The clarity that the Minister provided is helpful. Can he tell us where the provisions for examiners have been applied in legislation to those examining a neighbourhood plan, as opposed to a local plan?
Gavin Barwell
I am sorry; I did not make myself clear enough. Those provisions are in relation to people examining a neighbourhood plan.
The hon. Lady raised a couple of points that are worthy of clarification, including the important point on equalities, which she was quite right to mention. The public sector equality duty does not sit on the examiner. It sits on the council appointing the examiner to ensure that it is confident that it appoints someone who will fulfil that duty.
I recognise that the amendment is purely a probing one, but I want to deal with the point picked up on by my hon. Friend the Member for North West Hampshire about the particular group of people that the hon. Member for City of Durham suggested should do the work. The Government’s understanding is that many local planning authorities have used the Royal Institution of Chartered Surveyors’ neighbourhood planning independent examiner referral service to source an examiner. That seems to be standard practice. That service offers examiners that it has assessed as suitably qualified to carry out examinations. The RICS maintains that members of the panel are continually monitored to ensure that they maintain performance and standards.
Although I am a huge fan of the RTPI, the amendment is neither necessary nor sufficient. In other words, there are some experienced planners who would do a perfectly good job and are not registered with the RTPI. There might also be a newly qualified planner who is registered but may not have particular experience in neighbourhood planning and, therefore, might not be the ideal person. I completely understand the thrust of what she seeks reassurance on, and I share her view, but the relevant safeguards are in schedule 4B to the Town and Country Planning Act 1990.
To a degree, we should trust councils. They have a clear interest in ensuring that the neighbourhood plan is properly examined, because they share the hon. Lady’s concern that it should be in conformity with the strategic policies of their local plan. Therefore, I do not think that we, sitting here, need overly to pre-judge that councils are not capable of ensuring that we get the right people to do what I accept is important work.
I turn to new clause 1. As I said earlier in the week, neighbourhood planning referendums have an average turnout of 33%, which is not too dissimilar to the average turnout in local elections. At the moment, support needs to be gained purely from 50% of those who vote in the referendum. That is a fairly consistent principle that we apply across our democratic system. Although new clause 1 was tabled to probe, it may be useful for the Committee to know what its effect would be. Of the approximately 240 referendums that have taken place to date, about 170 would not have passed the test proposed by the hon. Member for City of Durham. I want to make three more quick points.
Gavin Barwell
I am slightly conscious of the time. It might be helpful to the Committee if we finished consideration of these amendments before 1 o’clock.
The hon. Member for Bassetlaw made an important point about the effect of a threshold on more deprived communities, where turnout tends to be lower. I think there was a consensus in the oral evidence sessions that neighbourhood planning has been too concentrated in certain parts of the country. We must be wary of that because we want to ensure that everyone is benefiting.
It is also important to note that for local plans, which arguably have a much bigger impact on communities, there is no requirement to hold a referendum. I think the people of Croydon would be delighted if they had a chance to have a referendum on the Croydon local plan. In questioning the exact wording of the new clause, the hon. Member for Bassetlaw said that we should look at having a threshold for how many people vote in favour—the proportion of the electorate that had voted yes. I am wary of that for the reasons mentioned by my hon. Friend the Member for North West Hampshire, but it might reassure the hon. Gentleman a little to hear that the average yes vote in the 240-odd referendums that have taken place so far is 89%. That shows what is happening where people are proposing referendums. Nevertheless, he is quite right to say that there could be, theoretically, a situation in which that is not the case.
John Mann
This is an important point. So far, the referendums have been for clearly defined communities. In urban areas, where communities are less defined, there is more opportunity for the creation of communities that might not totally work and that might not be fully accepted. The issues we are discussing could become more significant in an urban area where, by definition, the community is not defined. One could see how that might work out, particularly for those trying to protect areas against development. I am sure that there are already lots of examples in London.
Gavin Barwell
The hon. Gentleman makes a perfectly legitimate point. In relation to the first three amendments, I hope I have given clear reassurances that the necessary protection is there. In relation to new clause 1, the arguments about thresholds for elections will go on for all kinds of different elections. On balance, I do not see any reason to apply a test that is different from elsewhere in relation to the particular referendums we are discussing. In practice, thus far, the issue has not arisen, but we can certainly keep matters under review.
Chris Philp
Given what the Minister just said about referendums for local plans, will he consider amending the Bill to make provision for such referendums? That would certainly have my support.
Gavin Barwell
Given my personal circumstances, I wonder whether I have too much of a personal interest in such matters. There is an issue, in that we would probably argue that in relation to most local council policies, councils have a democratic mandate from their elections. The same could be argued of parish councils with regard to neighbourhood plans, but neighbourhood plans can also be proposed by neighbourhood forums, which do not have that democratic mandate. That is probably why referendums are needed. I was trying to tease out the shadow Minister on why the Opposition were making such a suggestion here but not for local plans.
I hope I have provided reassurance on the first three amendments. On new clause 1, I do not see the need to treat the referendums we are discussing differently from others. With that, I hope that the hon. Lady will withdraw the amendment.
Dr Blackman-Woods
I have listened carefully to what the Minister had to say. Our probing amendments 4 and 5 were helpful in getting clarity about the degree to which local plans and their provisions should be taken on board and what scope there is for neighbourhood plans to put their mark on the plan-making process. We also got additional information from the Minister about the degree to which the plans have to follow the national planning policy framework, but perhaps not about the attached guidance. I shall leave the Minister to ponder that; we may return to it later in proceedings.
The point of amendment 3 was that, in addition to what is in schedule 4B to the Town and Country Planning Act 1990, it might be helpful to think about applying a code of conduct for examiners. That could be a Royal Town Planning Institute code or a Royal Institution of Chartered Surveyors code. If the Minister does not like that amendment, I am quite happy for him to come back with another of his own. I shall go away and look again at schedule 4B to see whether it does what we think is absolutely necessary in maintaining public confidence, but I shall leave it for the time being.
Finally, the Opposition are seeking to raise the Government’s ambitions for the percentage of people who will get actively involved in neighbourhood plans. If the Minister wants to come back with other measures that demonstrate that he does in fact have high ambitions for the number of people involved, that would be a good thing. With that, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Ordered, That further consideration be now adjourned. —(Jackie Doyle-Price.)
Neighbourhood Planning Bill (Fourth sitting)
Thursday 20th October 2016
(7 years, 6 months ago)
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Dr Roberta Blackman-Woods (City of Durham) (Lab)
I beg to move amendment 11, in clause 2, page 2, line 16, at the end insert—
“(3A) To support Neighbourhood Plans, the Secretary of State should set out the weight that should be given to approved development plans at key stages in the planning process.”
This amendment gives weight to Neighbourhood Plans at key stages along the process and not just at the post-referendum stage.
I stress at the outset that this is very much a probing amendment to try to determine whether we need greater clarity, either in the Bill or somewhere else, about what weight, if any, should be given to a neighbourhood plan before a referendum has been held, and before the plan is adopted by the local authority and becomes part of its local plan documents. Given the number of witnesses who mentioned the lack of clarity, it is important that we get additional clarity from the Minister.
The Minister will know that various stakeholders said on Tuesday that this is a key concern. The Local Government Association has previously said:
“It is important that any proposals do not have the unintended consequence of undermining the ability of a local planning authority to meet the wider strategic objectives”.
I suppose the LGA was trying to clarify at what stage attention needs to be paid to the neighbourhood plan. If the neighbourhood plan does something outwith the local plan objectives, when does the local planning authority need to intervene to point that out to the neighbourhood planning forum or parish council?
Similarly, the British Property Federation said:
“Clarity must be provided about the level of weight attributed to neighbourhood plans at every stage of their preparation (for example, whether a draft plan’s general ‘direction of travel’ would be considered in the determination of a planning application)… The relationship between the statutory development plan-making framework and such material considerations must be clear for all stakeholders, in order to allow greater certainty in the development decision-taking process”.
Matt Thomson from the Campaign to Protect Rural England put it well when he said:
“The question reflects one of the key problems that we have been facing with the operation of the planning system for decades. That is…where you have tiers of nested planning policy documents, there is always a question of which has precedence over the other. It should not necessarily be just a question of the one that is produced most recently holding the most weight in a planning application environment.”––[Official Report, Neighbourhood Planning Public Bill Committee, 18 October 2016; c. 51, Q92.]
A number of our witnesses were dealing with a situation—I am sure that it will be well known to a number of members of the Committee—in which there is a controversial planning application that would not be allowed by a neighbourhood plan. When other sites for development have been designated but the plan has not yet been adopted, what weight should the local planning authority give to the general direction of travel in that neighbourhood plan?
I have met many parish councils and neighbourhood planning forums over the years who find that to be a frustrating aspect of the neighbourhood planning system. They might have been through extensive work locally. They might have done all the preliminary stages, including looking at the economy and the wider social environment, and doing character and neighbourhood assessments. I have seen many forums identify bits of land that nobody else knows about but that they believe are important to bring forward for development. They put a huge amount of work into the plan. Just before they have a draft plan but after they have identified sites, they find that their whole direction of travel is knocked aside because a significant site that they do not want to be developed, or that they do not want to be developed in the way described in a particular application, is not only considered but approved. That causes major headaches.
In some cases, the forums or parish councils almost have to start again with land use allocation or in the identification of sites. Furthermore, that situation undermines faith in the process. People say, “We did all this work, identified all the sites and did what the Government wanted us to do. We have put the plan in, but it has not been voted on. Nobody, particularly the local authority, seems to be paying any attention to it.”
It is about certainty not only for the people who put the plan together, but for developers. If a developer knows that a plan that is about to be submitted for a referendum has a lot of weight attached to it, they might not seek planning permission for a site that is not in the neighbourhood plan, or for an inappropriate use of the site. It is about the Government giving certainty not only to communities, but to developers, so that everybody is clearer at an earlier stage in the process what weight should be attached to the neighbourhood plan.
The Minister for Housing and Planning (Gavin Barwell)
Clause 2 builds on clause 1 to ensure that neighbourhood plans come into force sooner as part of the development plan for their area. It inserts a new subsection 3A into section 38 of the Planning and Compulsory Purchase Act 2004 to provide for a neighbourhood plan to become part of the development plan for that area when it is approved in the relevant referendum.
Without that change, there is a risk that neighbourhood plans might not be given sufficient consideration by decision makers in the period between the community expressing its support for the relevant plan at a referendum and the formal decision by the local planning authority to make the plan. When the neighbourhood plan provision was originally introduced, there was no fixed time period between those events. The Housing and Planning Act 2016 established an eight-week limit. The clause essentially says that the relevant neighbourhood plan will be part of the development plan for the area immediately after a successful referendum.
The hon. Lady made two or three points and it is important to disentangle them. For some of the time she spoke about precedence, which was raised repeatedly in the evidence we received. I hope I satisfied the Committee on that point earlier when I quoted paragraph 185 of the national planning policy framework, which states:
“Once a neighbourhood plan has demonstrated its general conformity with the strategic policies of the Local Plan and is brought into force, the policies it contains take precedence over existing non-strategic policies in the Local Plan”.
I do not think I can make it any clearer than that. Neighbourhood plans must be consistent with the relevant local plans, in terms of the strategic framework, but once they come into force they take precedence over the relevant local plan on detailed non-strategic issues.
The hon. Lady raised, and the hon. Member for Bassetlaw expressed powerfully, the wider concern that people can put a lot of work into producing a neighbourhood plan and then find that decisions about applications in their area that are contrary to their neighbourhood plan are being approved, either by their council or by the Planning Inspectorate on appeal. Clearly that is enormously frustrating. I am not sure whether I can guarantee that it will never happen, but we should certainly seek to minimise it. I argued in response to the hon. Gentleman that clause 1 will help—I think he accepted that—but I accepted that it is not a complete answer. I promised that in the White Paper coming later this year there will be further policy measures that will go a long way towards satisfying him.
The amendment would introduce a third term—this is where my problem comes—that is about weight. I will try to clarify the position, because this is a complex area. First, let me say to the hon. Lady by way of reassurance that the Government’s policy is clear that decision takers may give weight to relevant policies in emerging plans. The national planning policy framework sets out with some clarity the matters they should consider. I will read an excerpt from it, because it will help the Committee:
“From the day of publication, decision-takers may also give weight to relevant policies in emerging plans according to: the stage of preparation of the emerging plan (the more advanced the preparation, the greater the weight that may be given); the extent to which there are unresolved objections to relevant policies (the less significant the unresolved objections, the greater the weight that may be given); and the degree of consistency of the relevant policies in the emerging plan to the policies in this Framework (the closer the policies in the emerging plan to the policies in the Framework, the greater the weight that may be given).”
In relation to a neighbourhood plan, that would imply that the greater the consistency with the strategic policies of the relevant local plan, the greater the weight that could be given.
We need to remember that the essence of our planning system, particularly when considering individual applications for development, requires choices to be made. We should not seek to alter the long-established principle that it is for the decision maker in each case to determine precisely what weight should be attributed to different material considerations. Let us take the concerns expressed by the hon. Member for Bassetlaw and imagine a hypothetical situation in which a local planning authority does not have a local plan with a five-year land supply and is well below that. There is a neighbourhood plan in place that sets out where the community thinks appropriate development should go. A decision maker would then have to look at this.
The presumption in favour of sustainable development would apply because the five-year land supply is not there, so that would be one material consideration. The neighbourhood plan would be a material consideration pointing in the opposite direction, presuming the application was for a site that was not identified in the neighbourhood plan. There may be other material considerations—the views of local people will clearly be one. The site in question may be green belt or prime agricultural land, and there may be policies in the NPPF that would be material considerations. We have to accept that, in the way our planning system works, it is for the decision maker—whether that is a council planning officer, the planning committee of the relevant council, a planning inspector or, in some of the largest applications, a Minister—to look at the different weights to be applied to those material considerations.
Dr Blackman-Woods
I have listened to what the Minister has to say, and I am not sure that his comments really addressed the very real concerns expressed both by those putting together neighbourhood plans and by those who might have to abide by them, in terms of the planning applications they wish to make. We can have a discussion about the degree of exactitude we might put into guidance about the weight at different stages of the neighbourhood planning process, but I would have thought that it is perfectly possible for some rough idea to be put into guidance or subsequent regulations so people sitting on a planning committee understand the sort of weight they should attach in certain conditions and how the neighbourhood plan should be weighed against other considerations.
It is clear—there are lots of examples of this from across the country—that many planning committees are unsure how to give weight to a neighbourhood plan if it has not gone through a referendum and been adopted. In fact—I am sure the Minister has heard of many groups that have had this experience—neighbourhood plans are often completely ignored by planning committees, which might not even be aware that a plan has been undertaken in a particular area.
If the Minister does not want to put guidance in place, I urge him to think about how local planning authorities can be a bit clearer about what they can and cannot do with a neighbourhood plan at different stages in the process. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 2 ordered to stand part of the Bill.
Clause 3
Modification of neighbourhood development order or plan
Dr Blackman-Woods
I beg to move amendment 6, in clause 3, page 2, line 25, at end insert
“after consultation with the local area involved.”
This amendment ensures that any changes to a neighbourhood development order or plan are first subject to consultation with the local area involved.
The amendment seeks to amend proposed new subsection 4A, which states:
“A local planning authority may at any time by order modify a neighbourhood development order they have made if they consider that the modification does not materially affect any planning permission granted by the order.”
The Minister might say that a modification to a neighbourhood development order or plan would not in any circumstances be made without the local community that put the plan or order in place being aware of it. Again, I seek clarity from the Minister. It would help our understanding of what the clause is trying to achieve if he would explain the circumstances in which he thinks a modification would be undertaken by a local planning authority. Does he see any circumstances in which it would wish to make such a modification without having a period of consultation with the local community or at least checking whether they were not unhappy with the proposed modification?
That is an important test of the Government’s commitment to localism, of which there will be a number this afternoon. As we have already mentioned, a lot of people put a great deal of effort and work into producing neighbourhood plans and, indeed, applying for and getting neighbourhood development orders. They would be really concerned if, at some whim of the local authority, their plan or development order could be modified, and indeed they might not know anything about that modification. I have sat in meetings in which people spend an afternoon on a neighbourhood planning forum arguing over the content of one paragraph in the neighbourhood plan to ensure that they get it absolutely right and that it reflects what they think is the consensus of opinion. People could spend a great deal of time putting together an evidence base and then, for some reason that the clause is not entirely clear about, seemingly the plan could be modified without them knowing anything at all about the modification or the reasons underpinning it.
It could be that we are quite wrong about that and that somewhere else it is clear that the local authority must consult and ensure that the local community is on board. While I am talking about the amount of effort that local communities put into getting the plans and orders together, they are also often done at considerable cost in time and resources. Locality makes it clear in its “Neighbourhood Plans Roadmap Guide” that
“There will be costs associated with preparing a neighbourhood plan. Estimates vary widely; from less than ten thousand pounds to several times this amount”.
I certainly know that some have cost in excess of £50,000.
The point is that that is a considerable resource for local communities. Clearly, they will get some of that from the Government’s support for neighbourhood planning forums and neighbourhood plans, but in a number of circumstances they will have had to raise additional sums of money. They would not want to go through the whole process of raising the money and getting their plan in place only to find that, five modifications down the line, some central tenets of the plan no longer hold.
We also know that putting a neighbourhood plan together can take a long time. The average time communities appear to spend is somewhere between 18 and 24 months. I know that the Government are seeking to reduce that time with a process that is much easier and quicker and that this legislation is part of that. Nevertheless, even after the Bill is enacted it is still likely to take communities a considerable amount of time—easily a year—to get all the documentation together and go through the various stages of the process. It will also take a lot of person hours because, as I said earlier, the groups get together and have to do substantial amounts of work in order to get their various assessments and policies together.
We are all committed to neighbourhood planning and to making neighbourhood plans work, and we would not want the clause to worry neighbourhood planning forums or parish councils that, having done all of that work on their plans, carrying out the referendum and getting the plan adopted, it could simply be modified out of existence by the local planning authority. That could perhaps happen because the direction of the local plan changes, or because the authority is thinking about changing it and it does not like what is in the neighbourhood plan.
I am not entirely certain about the circumstances in which the clause would be used, so it would be helpful to hear about that from the Minister. Will he outline the circumstances in which he thinks the provisions in clause 3 will be used, and how extensive he thinks the use of those provisions will be? What assurances can he give to neighbourhood planning forums and parish councils that their neighbourhood plans will not be modified out of existence without them knowing anything about it?
Oliver Colvile (Plymouth, Sutton and Devonport) (Con)
I declare an interest: I am a shareholder in a small communications company that I set up, coincidentally, with a partner who was a Labour councillor in the London Borough of Enfield. We worked very closely together on a number of planning applications and gave advice to developers on how they could get planning permission, which I have always felt very strongly is about good community consultation. That is listed in my entry in the Register of Members’ Financial Interests.
I have spent about 15 or 20 years working on these kinds of issues. I am going to give some examples of where I think, with good community consultation and by involving the local community, we achieved an awful lot. The first is Sainsbury’s in Nine Elms, which is now being developed. We did an enormous amount of public consultation. We were advised by the leader of the Labour-controlled council to talk to the local community, which we did. We had public exhibitions, Planning for Real weekends and everything like that. I am delighted to say that we would have got the application through within six weeks of when it was needed. The only problem was that my client failed to talk to the retailers about their planning application, so it was a story of the property department at Sainsbury’s not talking to the retailers; that was an issue.
The second example, which I was very much involved in, is what is currently known as “Tesco tower”, which is down on Cromwell Road near the M4 out of London. We looked with our client at developing a block of flats on top of it. It got very close at one stage. We even got to the stage of being minded to approve, but the leadership of the local authority decided that they were not happy with it because they had received a lot of concerns from local communities, which ended up stopping it. What then happened was that the director of planning in the Royal Borough, who is now working in my hon. Friend the Minister’s Department, decided that he was going to do a masterplan, in which the local community was going to be very much involved.
In all those issues, the really big story was the massing and the height of developments that were taking place. On the Hoe, which is a conservation area in my constituency of Plymouth, Sutton and Devonport, an application was recently agreed for Pearson House. It did not have the support of the local community at all. It was thought to be too high, the massing was not right and it did not have any land around the outside either. Unfortunately, the council approved it. I argue that it might have ended up setting a precedent for other activities within the conservation area, so this is very important.
My concern about the amendment, if I am honest, is that it might cut across the strategic interest in the rest of the local authority, and I think that needs to be looked at.
Dr Blackman-Woods
The amendment would not prevent the local planning authority from making a modification; it merely suggests that it should consult the community before doing so.
Oliver Colvile
I shall be interested to hear what the Minister has to say about that. The point I am making is that it is vital that a neighbourhood plan, with all the hard work that people do, reflects what the height and the massing should be.
Gavin Barwell
As the neighbourhood planning system matures, we need to ensure that it will be suitably flexible to respond to changes in community aspirations. It is now almost five years since the first neighbourhood plans were prepared. As we have heard, well over 200 are now in force and more than 240 have been approved in referendums. We are aware that some of the early pioneers of the system want to update their plans.
Currently, the process for updating a neighbourhood plan is the same as the process for preparing a brand new one, regardless of the scale or significance of the changes proposed. The clause on changing the area that a plan covers, and the clauses that we shall come on to, are designed to address that fundamental problem. The hon. Member for Bassetlaw is nodding. He has lots of plans in his area, so clearly he has some experience of this.
The Government therefore believe that it is important to introduce a more proportionate way of revising plans to ensure that they remain up to date. Clause 3 will achieve that by introducing two new modification processes. I think that the confusion may have arisen—it is possible, at any rate; I cannot read the mind of the hon. Member for City of Durham—because there are two different processes. I will explain them, in the hope that that will provide some reassurance.
First, a process is being introduced to allow a local authority to make minor modifications to a neighbourhood plan or an order at any time, in the same way as an authority can currently correct errors. Clause 3 does that by amending section 61M of the Town and Country Planning Act 1990. On the key point that the hon. Member for City of Durham raised, I can absolutely reassure her that a local planning authority will need the consent of the relevant neighbourhood planning group to make the modification. That is clearly an important point. Her concern was that people would put a lot of work into producing their neighbourhood plans and then councils could modify them in some way without proper consultation. I can reassure her that that would require the consent of the relevant neighbourhood planning group, whether a parish council or a neighbourhood forum.
Secondly, any proposed modification that uses that minor change procedure cannot materially affect any of the policies in the neighbourhood plan or, if we are talking about a neighbourhood development order, the planning permission granted. Although there is no consultation requirement, the local planning authority must publicise what it has done, so people will be aware that the decision has been taken.
That is an important change, because currently even the most minor modifications, such as amending the wording of supporting text to clarify what a policy means, cannot be made without going through the same process to produce a new plan, including holding a referendum, which clearly involves a significant cost at a time when I think we are all aware of the pressures on local authorities. We strongly believe that that is overly burdensome.
However, the clause also provides a means by which more significant modifications may be made to a neighbourhood plan, through a streamlined procedure. It does that by inserting new subsections into sections 38A and 38C of the Planning and Compulsory Purchase Act 2004, along with a new schedule A2. The new schedule sets out in more detail the process to be followed in bringing forward draft proposals to modify a plan.
The streamlined procedure has a stronger expectation that the independent examination of the revised proposals, which we have been discussing, will be paper-based, with hearings only in exceptional circumstances. Additionally, there is no referendum. So the examiners’ recommendations will in most cases be binding. We have the minor modification procedure, the completely new plan procedure and an intermediate one, which may be used where the proposed modifications are not so significant or substantial as to change the fundamental nature of the plan but none the less are more than simple, minor modifications.
Crucially, with regard to safeguards, the local planning authority and the independent examiner will need to agree that that is the case in order for a draft plan to proceed through the streamlined procedure. In this case, we are taking powers to regulate the process. We are consulting on that, but I can say to the hon. Member for City of Durham that in the intermediate procedure our intention is that the local authority must publicise what it is doing and consult in the same way that it would for a new neighbourhood plan.
To sum up, in the case of the most minor modifications, it is the Government’s contention that a full consultation of the kind we would have for the streamlined or new plan procedure is not necessary, but there is the safeguard that the relevant body that drew up the plan must give its consent to what is being done. However, if we are looking for more significant changes, although not those that would trigger a new referendum, it is important that there is some consultation.
I hope that I have provided the reassurance that the hon. Lady’s probing amendment was looking for, and that my explanation has been useful in helping Members understand the two procedures and when they would be used.
Dr Blackman-Woods
Having listened to the Minister, I think that the probing amendment did its job effectively. There is now much greater clarity on exactly what the provisions of the clause mean. On the minor modification process, I take the Minister’s point about a simple drafting error that can be corrected easily and perhaps without going out to full consultation, but I would still expect a process for notifying the neighbourhood planning forum or the parish council that the modification has been made or is about to be made.
Gavin Barwell
It goes further than that. The relevant neighbourhood planning body has to give its consent even for the most minor modifications, and then the wider public are notified.
Dr Blackman-Woods
That is a helpful clarification. In the second set of circumstances, I take the Minister’s point that this is perhaps an intermediate measure in order to allow modifications that are a bit larger to take place and that the community would clearly be involved in that. Given the Minister’s helpful clarifications, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 3 ordered to stand part of the Bill.
Schedule 1
New Schedule A2 to the Planning and Compulsory Purchase Act 2004
Question proposed, That the schedule be the First schedule to the Bill.
Gavin Barwell
I will not detain the Committee on the schedule, which sets out in detail the process to be followed when proposing to modify a plan. In order to respond to the amendment tabled by the hon. Member for City of Durham, I have described that process already, so I commend the schedule to the Committee.
Dr Blackman-Woods
I fully accept what the Minister says.
Question put and agreed to.
Schedule 1 accordingly agreed to.
Clause 4
Changes to neighbourhood areas etc
Dr Blackman-Woods
I beg to move amendment 7, in clause 4, page 4, line 3, at end insert
“providing the subsequent area is not smaller than a parish or town council area or local authority ward.”
This amendment ensures that the size of a neighbourhood area is not smaller than a parish or town council area or local authority ward.
The Chair
With this it will be convenient to discuss amendment 8, in clause 4, page 4, line 11, at end insert—
“(6E) Modifications made to a neighbourhood area must be subject to consultation with local people.”
This amendment ensures that neighbourhood areas are only changed after the consultation with local community and that changes are driven by what the community wants.
Dr Blackman-Woods
This is a probing amendment, to test the Government’s thinking, if indeed there is any, on the appropriate size of a neighbourhood area—[Laughter.] Sorry, I did not quite mean that. The clause allows a change to be made to a neighbourhood area and outlines the process for doing that.
Some developers who are concerned about this clause have brought to our attention the question of whether there is a minimum size for a neighbourhood area. The concern raised is about a situation where three streets in a particular area have their own neighbourhood plan, while another three streets next to them have a different neighbourhood plan. Those two plans might not speak to each other or be travelling in the same direction with regard to some of the detail, yet they will both be given sufficient weight.
This is an attempt to tease out from the Minister whether he thinks there is any value in setting a limit, such as a given number of electors. The amendment says that a neighbourhood area should not be smaller than a parish or town council area or local authority ward. I am not particularly tied to the exact wording of the amendment, but we want to find out: if it is not a local authority ward or a parish area, what is it?
Gavin Barwell
I understand that this is a probing amendment, but are there any examples of existing neighbourhood plans that the Opposition feel cover too small an area?
Dr Blackman-Woods
I am not aware of any. We are trying to ensure that the provisions in this legislation will not lead to neighbourhood areas that are very, very small indeed. Of course the Minister will say, “Well, it’s up to the local authority to decide whether it is an appropriate area,” but the authority might come under particular pressure to agree a specific area or think it is in its interest to promote a very small area, because it will not have so many people to deal with in terms of neighbourhood planning.
We know that the whole of neighbourhood planning legislation leaves it very much up to the community to set the boundaries and to say what brings that neighbourhood together, why they think it is important that the boundaries are set where they are and what the spatial dimension is to the plan. Usually it is very obvious, because they are using village boundaries or some sort of settlement boundary, or there is something that binds that particular community together. They also have to talk, and are usually very good at looking at the community networks and informal networks that might underpin those. The physical characteristics of the neighbourhood will also come into play.
The community will decide whether it is a business area. They will talk about the natural features. There is a huge list of things that the community will look at when putting the initial application together, in terms of determining why the boundaries are really important and what binds the neighbourhood together. That is a very good thing, and I know it has led to some really interesting discussions in communities—I am sure the Minister has seen this—about what is important to them in their neighbourhood and what binds them together. That can facilitate the next stage of development: what they want their community to look like in 15 years and what they need to put into the neighbourhood plan to achieve that.
John Mann (Bassetlaw) (Lab)
Mr McCabe, I trust it is in order to make comments appropriate to clause stand part, as well as to the amendment.
John Mann
Thank you, Mr McCabe. That is helpful, because the amendment probes the critical issue—this is not a criticism of the Government—of the real potential for inventiveness for neighbourhood planning in urban areas and occasionally in rural areas. I will give some illustrations. So far, the model has been community orientated and based on existing structures. In my area, we have 22 plans under way. Only two parishes do not have one and I am going to those parishes to encourage them to move down this path quickly.
Parish councils and villages have been beneficiaries from successive Governments. They get more lottery money for village halls and village sports facilities because they are defined areas and it is much easier to make an argument. There is a danger that neighbourhood planning and neighbourhood development plans will reinforce that further. One could argue that the inventive parish councils will, for example, build in areas for future recreational development that might not already exist. That would be a smart move. In other words, the parish council might say, “This piece of land will be for a future playground for children we don’t yet have.”
Without doubt, having got that through, bids for money would be more successful, as one would be part-way through the planning process, even for larger structures that might require detailed planning consent—of course, it could also apply to change of use of land—such as village halls and that kind of facility. We have precisely that situation in Ranskill, a parish in my area, where the community is expanding. It is quite a big village—I am meeting people from there in the next 48 hours—but it does not have a village hall. The people of Ranskill are more than happy to have more housing, if it is in the right place, and to use planning gain to fund what they have long wanted and not managed to achieve. They would see this as rather assisting them, if it goes the right way. Other issues, which we dealt with previously, are clouding that, with developers jumping the gun.
John Mann
I will, but it might be more helpful if I make a little progress first—the hon. Gentleman could make an even more succinct point later. I will come back to him, but I will first expand on what I am saying about opportunities with two examples.
I will start with a rural example—not an abstract example, but the example of a mountain: Blencathra in the lake district. Plenty of effort is being made to save Blencathra mountain for the nation. There are many byways, roads and properties around Blencathra. In my view, it would make perfect sense, should local people wish it, to designate the mountain and its surrounds as the neighbourhood.
Given the size and nature of mountains, that neighbourhood would probably cross constituency, council and parish boundaries—parishes do not go around mountains, but take segments of them. However, for housing, the amenity, facilities, walking routes and highways, the key determining factor is their relationship to the mountain. That would be the case for many other examples in the lake district. Neighbourhood planning on Blencathra would do something fairly revolutionary, because it would take the whole of the amenity under the democratic control of the people living there, because they are the ones defining things. That would be very powerful indeed.
Secondly, at the priory church in Worksop, working with the Prince’s Foundation for Building Community, I have proposed that the area defined historically by the priory church as its immediate parish—not the current parish boundaries, which are all over the place, because churches like to increase their congregations, but the original boundary—should be the boundary of the neighbourhood plan. That is how we are proceeding. Even better, part of that boundary has been created in more modern times—300 years ago—by the canal, so it is a natural boundary. We have a grand, huge church, once the largest in the world, which defined the buildings around the community, and we now have the ability to reset the church building for the community, the surrounding housing and future housing development. We are also taking the worst bit of the Chesterfield canal and reopening it.
What should be done is fairly obvious. The Prince’s Foundation has done the masterplan, which has been created, and the community is engaged—what the community is interested in are things such as antisocial behaviour, but from a planning point of view that means where pubs are, their opening hours, or where people walk, drive and park. They are very happy for housing to go on brownfield sites—blighted spaces—of which there are two. They would be very happy to have a car park on one of those, which is a former gasworks site, where housing probably could not go. These are all great opportunities.
There is no controversy about that with the population; they are after other things. That is a community of 200 or 300 houses. It is tiny, but its impact on the centre of Worksop and the amenity for tens of thousands of people is huge, because the other part of the community is bounded by what one would describe as the park, although that is not the term we use in Worksop. I would like to turn it into a park and give it more space; indeed, one of the conclusions of the neighbourhood planning might be that we define a proper park boundary.
This is hugely exciting stuff for the residents, who are both tenants and home occupiers. If they are occupiers, their property values will go up, so they will be quite happy. Antisocial behaviour undoubtedly will go down because their quality of life will go up. New housing will be at a premium, because it will be near a canal and a park in a beautiful, well-designed area. Everybody is a winner. It is a classic case of where neighbourhood planning would open up an area in which the local authority has never once proposed housing, because of land ownership and because there has been no minor master planning.
Oliver Colvile
I am a rather unique Conservative Member, in that I represent a totally inner-city seat outside London, as the hon. Gentleman may know. I only have the Ponderosa pony sanctuary—a rather muddy meadow—in my constituency. Does he not think there is an argument for urban conurbations such as mine to also have their own parish councils? It should not just be left to rural communities.
John Mann
There is such an argument, but in a small community with 200 or 300 houses, a parish council may be too grandiose. In that example, I would like to see the church managing and leading the development and consultation process, because that is the fixed community entity. I could give other examples in my area where the church building can be redefined as the church at the core of the community, precisely because the building was built as a community venue. Of the great cathedrals, Lincoln would be a great example, but the best of all is St Paul’s. If this was available 30 or 40 years ago, one could imagine that the buildings around the great St Paul’s cathedral would be more in tune with it, as opposed to what has been built haphazardly and chaotically around it. That is where smaller areas could be very empowered. I will give another example [Interruption.] The Whips are always keen to put Members on Committees and then try to restrict important debate.
This is fundamental to the Minister’s thinking and to his civil servants’ thinking. Planning is being seen in terms of housing and structures, with an additional side of highways, which have a major and fundamental role. The Prince’s Foundation work was done by Ben Bolgar, the top person there, and Fred Taggart, who are two brilliant planners—real planners, not just planners for real. They looked at where people historically moved and walked, which is what defines a community.
The walkways and jitties that are a problem could be closed off. That could be specified in a very localised plan: “We don’t want a walkway here. Close that off and get rid of it, because there’s antisocial behaviour. We want people to walk this way, drive that way and park here rather than there.” One gets into real localism, which never in a local plan would be possible. One could not in a local plan specify, “This little jitty will be closed down and we’ll create a walkway here. This bit should be grassed to allow more access to the canal.” That is far too much minutiae.
Gavin Barwell
Let me start by saying the hon. Gentleman knows how to push his agenda effectively with officials and with the Minister. I thank the hon. Member for City of Durham for tabling these probing amendments to clause 4. Before I address the amendments I will make some general remarks about clause 4, which aims to ensure that neighbourhood planning is suitably flexible to respond to changes in community aspirations.
Currently, there is complete agreement that it is not possible to modify a neighbourhood area if that would result in a neighbourhood plan or an order covering more than one neighbourhood area or more than one plan in one area. The practical effect of that is that, once a neighbourhood plan is in place, it may not be possible to make a new neighbourhood plan for an amended area without first entirely revoking the existing plan. That would leave that community without the plan it had worked so hard to produce until the new one came into force. Clause 4 amends sections 61F, 61G and 61J of the Town and Country Planning Act 1990, and sections 38A, 38B and 38C of the Planning and Compulsory Purchase Act 2004 to change the procedure for modifying the boundary of a neighbourhood area.
Clause 4 will, for example, allow parish councils that had previously worked together to produce a multi-parish neighbourhood plan to apply for the neighbourhood area to be amended so that they can prepare a plan just for their individual parishes in the future. Equally, it would allow neighbouring forums that had previously prepared their own plans to apply for the area to be amended, so that they could come together to write a plan for both of those areas.
I reassure the hon. Member for City of Durham that I fully understand her concern in relation to both amendments. The Government have considered whether a designated neighbourhood area should follow ward boundaries. We sought views and consulted on that question as part of a technical consultation on our planning reforms in July 2014. The answer to that consultation was, almost unanimously, no, they should not. We, and nearly everybody who responded, believe that it is necessary, first that there is flexibility for communities to ensure that the area plan reflects the aspirations of that community, and secondly that the local planning authority has a positive and constructive dialogue, in order to arrive at a final decision for the area.
I represent a constituency within a London borough. Mr McCabe, you are probably the best example of this: you represent a constituency in the City of Birmingham. I think I am right in saying that your authority has the largest wards of any local authority in England, and some of those wards will cover more than one community. I can certainly think of examples from my own constituency. The hon. Member for Bassetlaw earlier mentioned the Shirley ward. Most of that ward includes an area in which most people would think of themselves as living in Spring Park, but there is also a separate development that used to be a large children’s home run by Lambeth Council—where, sadly, some shocking abuse took place—called Shirley Oaks. That is a separate and distinct community. If the people of Shirley Oaks wanted to produce a neighbourhood plan for their area, we should not be legislating to say that they cannot do that.
The hon. Member for Bassetlaw made his case powerfully from his own experience. So far in this Committee, I find myself agreeing with him on a number of points. If his objective was to stop being appointed to future Bill Committees, he is probably doing very well, but we can tell from the passion with which he speaks that he really believes in what he says. It is great to hear about the number of neighbourhood plans in his area. He has put it on the record that he is on his way to the two remaining parishes that do not have one, and nothing could do more to drive progress than the prospect of his imminent arrival to push the case. He raises a powerful point.
Gavin Barwell
I was gently teasing the hon. Gentleman. I wish more Members of this House had done what he has. He has clearly put in a huge amount of work in his constituency to encourage people to take up the reform from the Localism Act 2011. It is fantastic that he has done so and it is great to have him on the Committee as such a powerful champion of the process.
There is a really gritty issue here, which is that when asked, “Where do you live? What community are you part of?” people do not necessarily say what the local council might expect them to. In some cases—for example, if people are part of a village with a distinct identity—the village will be the right unit of identity. However, in urban areas—the hon. Member for Bassetlaw has given some interesting examples of rural areas—there may be other creative ways of thinking and bringing people together.
I very much share the hon. Gentleman’s view, which is that we should not prescribe in legislation the maximum or minimum size of the unit. We should let a thousand flowers bloom and see what people think of the appropriate units. Earlier, I asked the hon. Member for City of Durham for examples of neighbourhood areas that cover too small an area, and I do not think there is any evidence that things are happening at such a micro level as to cause a problem. She is quite rightly probing and asking the questions, but it is clear that the view of the Committee is that we should allow for the current flexibility.
On amendment 8, which is on the consultation arrangements required when a neighbourhood area is changed, I am sure we can all agree that consultation with the wider community is crucial. I assure hon. Members that there is already provision for that to happen where a designated neighbourhood area is amended and a neighbourhood plan is already in force. It is currently the case that where all or part of a neighbourhood area has already been designated, the local planning authority must publish and consult on any modifications to that area for at least six weeks. If the hon. Member for City of Durham would like to add to her reading list, that is in regulation 6(c) of the Neighbourhood Planning (General) Regulations 2012. That should keep her busy this evening. Exactly the same regulations will apply to the new provisions.
The clause will ensure that, as neighbourhood planning continues to mature, the system is suitably flexible to respond to changes in people’s aspirations when it comes to the nature of the geographic area covered by the plan. It will also ensure—the hon. Member for City of Durham was quite right to raise the point—that any proposed changes are properly consulted on, and that the public have the chance to feed into the process. I ask the hon. Lady to withdraw the amendment, and I hope that clause 4 stands part of the Bill.
Dr Blackman-Woods
I have listened carefully to the Minister, and he has given us the reassurances we sought. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 4 ordered to stand part of the Bill.
Clause 5
Assistance in connection with neighbourhood planning
Dr Blackman-Woods
I beg to move amendment 1, in clause 5, page 4, line 40, leave out “as follows” and insert
“in accordance with subsections (2) to (4)”.
The Chair
With this it will be convenient to discuss the following:
Amendment 9, in clause 5, page 5, line 9, at end insert—
“(c) reasonable payments made by local authorities for the purpose set out in paragraph (a) and (b) shall be recovered from the Secretary of State’s department.”
This amendment allows for the full recovery of costs of assisting with the development of a neighbourhood plan to be recovered to the local authority.
Amendment 2, in clause 5, page 5, line 19, after subsection (3) insert—
“(4) Section 120 of the Localism Act 2011 (Financial assistance in relation to neighbourhood planning) is amended as follows—
(a) at the end of subsection (2)(a) leave out ‘, and’ and insert ‘subject to the condition that such assistance is prioritised for bodies or persons in deprived communities, and’,
(b) after subsection (3)(b), insert—
‘(ba) a deprived community is defined as being any area which is among the 20 per cent most deprived Lower Layer Super Output Areas according to the most recently published English Indices of Deprivation,
(bb) prioritised financial assistance is defined to mean that no less than 50 per cent of the total value of the financial assistance provided under this section is provided to deprived communities.’”
Amendment 10, in clause 5, page 5, line 19, at the end insert—
“(4) To support Neighbourhood Plans, all councils should have a Local Development Plan in place by December 2017.”
This amendment ensures that Local Plans are in place so Neighbourhood Plans can be made in line with the strategic aims of Local Plans.
New clause 2—Incentives to create neighbourhood development plans—
(1) Areas with an adopted neighbourhood development plan in place should benefit from a locally agreed share in the New Homes Bonus.
(2) Areas with an adopted neighbourhood development plan should have access to enhanced Community Infrastructure Levy payments, and all councils shall have a Community Infrastructure Levy scheme in place by 2017.
This new clause would create incentives to encourage communities to produce neighbourhood development plans.
Dr Blackman-Woods
I want to speak to amendments 1 and 2 and the other amendments in the group. I will start with amendment 9, which seeks to ensure that there is full recovery of costs for assisting with the development of the neighbourhood plan, with the costs recovered by the local authority. One thing came through clearly from the evidence the Committee received on Tuesday: many voices were all saying—indeed the Minister acknowledged this—that planning departments are massively under-resourced.
I was keen to table the amendment because we are anxious that neighbourhood planning is properly resourced. That is really important. However, we are mindful of the huge demands placed on our local authorities at the moment, especially at a time of cuts. I hope the Minister feels able to adopt the amendment, or at least that he will make it clear to the Committee how the additional cost of supporting neighbourhood planning forums and parish councils in drawing up their neighbourhood plans will be met.
The Minister will have heard the Royal Town Planning Institute, Local Government Association, Town and Country Planning Association and British Property Federation all point to the fact that, because of the success of neighbourhood plans, there are now greater expectations in our local communities that they will not only be able to draw up neighbourhood plans but have the resources to do so in a meaningful way that allows them to include much of the community and produce a quality document that really reflects what the community wants to achieve. They therefore want it to reflect the high aspirations of the community.
We do not want to see any area being held back because it does not get the resources it needs. The local authority is only able to give a small amount of money to support the exercise, so we want to hear from the Minister a reiteration of what he said in Committee on Tuesday—recognition that resourcing of planning departments is an issue. What can he do to assist local authorities in meeting their obligations under the clause to support neighbourhood plans?
The Minister will know that the situation for planning departments has got so much worse since 2010. More than half think that under-resourcing will present a significant challenge to their ability to undertake their functions in the next year. On Tuesday, Richard Blyth from RTPI told the Committee:
“We have completed a survey of local planning authorities in north-west England that shows that between 2010 and 2015 there was a fall of 37% in planning policy staff. These are the staff who tend to get asked not only to provide the support for neighbourhood plans, but are under a deadline of completing a local plan by the end of March 2017.”
He went on to say:
“I am a bit concerned that legislation is being used in a way that may not be possible to support in terms of the resources available to local planning authorities.”––[Official Report, Neighbourhood Planning Public Bill Committee, 18 October 2016; c. 66, Q118.]
We know the reason for that: it is because many of our councils are facing huge cuts. We heard from Locality, again on Tuesday, that,
“local planning authorities have been stripped of funding and they have reduced huge amounts”––[Official Report, Neighbourhood Planning Public Bill Committee, 18 October 2016; c. 51, Q92.]
of their very highly skilled staff—often losing them to the private sector, which is able to provide them with not only higher salaries but, in the current environment, more secure jobs.
John Mann
It is not just middle-class areas that have created such plans. The biggest one in my area is for Harworth, which until fairly recently was one of the last working collieries in the country. It has a huge working-class community. Its neighbourhood plan has been adopted by referendum and agreed by the district council, and it involves 1,500 new allocated housing spaces and vast amounts of new land allocated for employment. The community, knowing and demanding what it wants, has got on with it. So it is feasible to do that, and to do it quickly and in all communities.
I have two questions for the Minister. First, the reason why Harworth has been able to create a plan is that it has a part-time town clerk, so it had a bureaucratic system in place. In other areas in my constituency and in neighbouring constituencies, lots of places do not need to be creating bureaucratic structures. The last thing that most of my communities want is more paid public servants who do not live in the area , but would be going in and telling them what to do. All they want is power, so how will we stop bureaucracies building up on the back of neighbourhood planning?
Secondly, and complementary to the first question, instead of simply doling out money, which would suggest employment and other contracts, requiring institutions to deal with that, what are the prospects for the secondment of expertise? I have suggested that the Canal and River Trust could second a planner to assist the process in my area. The ability to second people in with the technical expertise to assist communities, with no pretence that those people are living or staying in the community, would empower neighbourhoods and have a dramatic positive impact, allowing other former mining communities in my area to repeat what Harworth has done.
Oliver Colvile
May I make one small point to the hon. Gentleman? I have a university in my constituency that has a planning school. Perhaps something to encourage is co-opting some of those students to help people seeking to develop neighbourhood plans.
John Mann
We would be more than happy to have students and professors from Plymouth, although I suspect Sheffield might be a more realistic scenario, but on exactly the same logic—the hon. Gentleman makes a good point.
I put it to the Minister that secondment rather than cash could rapidly lead to positive results. Those communities are far more likely to say, “We want employment land. We want more housing. We want the petrol stations and supermarkets we do not have.” In my experience, working-class communities are far less nimby than middle-class communities. They want what middle-class communities have taken for granted—albeit they prefer to drive a little distance to get to them—and they will demand them on their doorstep. This is great untapped potential for the country and empowerment is the issue. Does the Minister agree, and how will he help?
Gavin Barwell
I thank hon. Members for tabling the amendments, which provide an opportunity to discuss the important matters of the advice, assistance and resources available to communities and local planning authorities in supporting their take-up of neighbourhood planning. Before I respond to individual amendments and if you agree, Mr McCabe, I will say a few words about why we are introducing the measures in clause 5.
We believe that the clause will ensure that when communities consider whether to prepare a neighbourhood plan or order, they can make the decision with a full range of advice and assistance available to them. We believe that will assist in building the positive and constructive relationship between a local planning authority and the relevant local authority that is necessary to make neighbourhood planning work.
Amendment 1 simply facilitates amendment 2, which I will consider shortly. I will start with amendment 9, as the hon. Member for City of Durham did. I appreciate the desire to ensure that adequate resources are available to the relevant local council. We believe the amendment is unnecessary because local planning authorities can already claim funding for their duties in relation to neighbourhood planning. We will obviously continue to review the costs incurred by councils in delivering neighbourhood plans and these will change as the take-up of neighbourhood planning increases and local authorities, local communities and others become more familiar with the process.
It is probably worth putting on the record what the current arrangements are. Local authorities receive £5,000 for each of the first five neighbourhood areas they designate and £5,000 for each of the first five neighbourhood forums they designate. They then receive £20,000 for every single neighbourhood plan when a referendum date has been set. The idea is that there is some initial pump-priming for the first five to 10 times they deal with the process, but also a set amount of money because of the costs involved in examination and then in holding a referendum.
The hon. Lady made a wider point about resourcing planning departments and was keen that I reiterate what I said in the evidence session. I am happy to do that. I recognise absolutely that there is an issue. Reflecting back on the evidence that was given to us, I respectfully suggest to her that I did not hear a lot of evidence that the Government were not properly funding the specific burden of organising neighbourhood planning. I heard a lot of evidence that in more general terms planning departments are underfunded and the Government need to look at the level of planning fees being charged.
Dr Blackman-Woods
The Minister is absolutely right, but people made the point about resourcing because of the specific obligation in the Bill for local authorities to support neighbourhood plans.
Gavin Barwell
I respectfully argue that the sums of money that local councils are having to spend on neighbourhood planning constitute a very small share of their overall planning departments. The fundamental issue, which I absolutely take on board, is the level of fees that planning departments are able to charge to cover their costs. I said during the evidence session—I am happy to repeat it now—that it has struck me during the three months I have been doing this job that whereas on many issues conflicting opinions are expressed to me by different people in the housing and planning world, on this issue there is unanimity. Developers and council planning departments alike say that there is an issue.
John Mann
There is not unanimity everywhere because land prices and build prices are dramatically different in different parts of the country. We see that even more starkly with prefabricated housing. The proportionate cost for someone who sells a house for £600,000 in London, which would be a tiny one, or £600,000 in an area like mine, which would be rather a large house, is very different. There is a danger that if the planning fees for cheap, affordable housing are too high, that will discourage self-build and small developers.
Gavin Barwell
We can always rely on the hon. Gentleman to shatter unanimity when it is in danger of breaking out. He makes a fair point. The cost of building, say, five new homes in his constituency will be lower than the cost of building five new homes in the City of Westminster. He is quite right to sound the alarm that we should not allow fees to go too high, but I suspect that if I spoke even to developers and the planning department in his own patch, they would say there is still an issue in terms of financing.
The hon. Gentleman did not say this, but the point is relevant. We tend to hear from developers, and we have to bear in mind that these fees are also paid by householders when they make applications to extend their properties or something like that. The voices we tend to hear are those of the large developers, but these fees are paid by others. None the less, the hon. Lady asked me to reiterate that I accept there is a problem, and I absolutely do. The Government have consulted on this issue, and the White Paper will contain our response. I think I have given a pretty good steer as to where I want to go.
I want to make a slightly partisan but important point. While I entirely accept the pressures that planning departments and, indeed, councils in general are under, it is important to note that despite the difficult period they have been through, they have had huge successes in driving up performance. I will give the Committee some figures. When the coalition Government came to power, 17% of councils had a local plan. As of this September, the figure was 72%. In the second quarter of this year, in the most recent figures available, 83% of major planning applications were decided within the time limit, which is the highest ever performance on record. In the year up to 30 June, our planning system gave planning permission for 277,000 homes. That is the highest ever figure on record.
I pay tribute to local authority planning departments. Despite the financial restrictions they have been under, they have raised their game significantly. I gently tease the Labour leader of my local council about this, because he flip-flops between press releases saying that the Government have financially crippled him and ones that boast about how well the council is performing. While I do not in any way underestimate the difficulties local councils have had, when this period is looked back on, it will be seen as one where public services have raised their game, despite the restrictions on resources.
Gavin Barwell
I have goaded the hon. Gentleman, so I have to allow him to intervene.
John Mann
The Minister cannot get away with that, because we all know that technology and the Planning Portal have totally transformed the speed of planning, very effectively. It is technology and the portal that have done this, not the Government. We do not care, but they should not take credit for things that they have not done.
Gavin Barwell
It is a range of things. Technology certainly plays a part. I also observe that the designation regime introduced by the coalition Government has played a part. I do not want to go on too long, because this is not directly relevant to the point we are considering. However, I genuinely believe that when we look back on this period—this is not all down to the Government, if that makes it easier for the hon. Gentleman to accept—we will say that despite the financial restrictions public services were under, public servants have done an amazing job of improving the services they provide. That is the point I wanted to make.
I welcome the intent of amendment 2, but I cannot agree that it is necessary. I hope I can reassure Committee members that even in these times of tight public finances, we are supporting neighbourhood planning groups. We have made £22.5 million available to do that. More than 1,500 payments have been made to date. Since 1 April this year, all groups can apply for a grant of up to £9,000. We are providing additional support to priority areas, which include more deprived areas and those with the highest housing growth. Communities that fall within those priority groups can apply for up to £15,000 and can also access technical planning support.
I agree with the hon. Member for Bassetlaw—this is becoming a worrying trend for both of us—that this is not just about money. It is also about having good advice and assistance. We have a national network at the moment of 132 neighbourhood planning champions, who are there to provide exactly that kind of advice and assistance. While I understand what the amendment is trying to do, which is quite rightly to say that thus far neighbourhood planning has been adopted mainly in more rural parts of the country and that we need to ensure that it is also well used in urban and more deprived and more transient communities—there is no argument there—I am not sure whether saying 50% of the money has to go to such areas is right, because by definition it is a demand-led budget.
I want to encourage people from all around the country to set up groups and ensure that funding is there to support them. If it helps the hon. Member for City of Durham, I assure her that if we ever get to a point where the budget is running out because there are so many applications, I will be the first person knocking on the Treasury’s door to ensure that there is extra support. However, I think if we passed a law to say that 50% must go to these places and 50% to those, we could run the risk that some people would run out of money when the other pot had not been used. That does not seem to be a logical way to deal with the issue.
I completely understand the aspiration behind amendment 10. We agree that in order to provide clarity to neighbourhood planning groups about the context within which they prepare their plans all areas should have a local plan. In the evidence session and on numerous other occasions I have spoken strongly about the importance I attach to having local plans in place. If the Committee will permit me for a minute, let me reiterate the main point. The planning applications that tend to come across my desk are nearly all speculative applications where essentially the local planning authority has not had a local plan in place with a five-year land supply. Developers have then come in and picked the sites that they want to build on—those are not the aspirations of the local community but where the developers want to see development go—and things escalate and end up on my desk. I want to remove all that unnecessary conflict from our planning system and the way to do that is to ensure that we have complete coverage in place.
I appreciate that again this is a probing amendment so I will not be too critical, but, rather than accepting an amendment that asserts that something should happen by this timescale, we have tabled a series of amendments that seek to advance that agenda. I also want to make plan making much quicker and make it much easier for planning authorities to update their plans.
The hon. Member for Bassetlaw has previously spoken about—he mentioned it today—his frustration at the delay when the coalition Government changed the national planning framework. Actually, I think we were quite right to do that because we needed to ensure that when one council does not meet its housing need, those houses do not disappear from the system but are spread out in surrounding authorities. He is, however, quite right to say that because the process is so slow at the moment, that imposes a big delay when that happens. Therefore it is important both to make sure that we have plans in place and try to make the process quicker so that when they need updating—because either Government policy changes or the facts on the ground change—that can be done much more quickly.
I do not want to labour the point, because I know the amendment is a probing one, but its wording mentions just having a plan in place. We would all probably agree that we actually need an up-to-date plan that takes account of the latest household projections and an accurate assessment of housing needs. A lot of authorities currently have a plan, but not a plan that is based in any way on the latest information about what the area requires. I hope that I have reassured the hon. Member for City of Durham on the underlying issue, even if we disagree on the amendment.
Finally, I turn to the interesting issue in new clause 2, which I am grateful to the hon. Lady for raising. We are looking at the matter in general terms at the moment. We have always been clear that we would like to see the new homes bonus benefiting communities that support development, such as those that produce neighbourhood plans, and we strongly encourage local authorities to allocate funding from the new homes bonus in that way. Indeed, it is already possible for councils and areas where a neighbourhood plan is in place to reach agreement in exactly the way she suggests in her new clause.
With regard to the second part of the new clause and the community infrastructure levy, communities where a neighbourhood plan or order is in force receive 25% of the CIL arising from development in their area, whereas the figure for communities without a neighbourhood plan is only 15%, so there is already a key incentive. Three questions are posed by the new clause. First, should we actually legislate to require something similar in relation to the new homes bonus? Secondly, should we raise those percentages in relation to CIL? Thirdly, should we force everybody to have a CIL? I will take those in turn.
On the first question, that is an interesting idea. I hope that the hon. Lady will allow me to reflect on that some more in the White Paper. The Prime Minister is very interested in ensuring that communities that go for growth are properly rewarded, so that people feel that if their community accepts more housing, their quality of life improves, rather than them finding it harder to get a GP appointment or to get a child into the local school, or finding their train more overcrowded. I am not sure that we should legislate in the way she suggests, but I am very interested in the underlying grain of the idea.
On CIL percentages, there is a balance that we need to be wary of. We can take Bassetlaw as an example of a particular area with a local plan and think about what we want to do with the money that the state captures out of land uplift. We certainly want to do things in that local community, but we might also need to make sure that major bits of infrastructure across the district happen. If we put too much into one local area, we will lose the money that might pay for the new junction on the dual carriageway, or a spur off the main roundabout, or whatever the right project is. There is a tension that we need to recognise.
We probably also need to recognise that it is not necessarily in the interests of every single local authority to have a community infrastructure levy. One could at least think of circumstances in which land values were sufficiently low and development therefore marginal in terms of viability. Introducing a CIL might then push crucial regeneration projects, which would otherwise have been viable, and make them non-viable. I am not sure that forcing every local council to introduce a CIL, if they judge that to do so would not be in the best interests of their area, is the right thing to do.
In summary, the hon. Lady is quite right to raise all those questions. They are at the heart of the debate about what we need to do to ensure that communities are incentivised to go for growth, but I hope that I have pointed out some of the points of detail as to why we do not want to accept the amendment.
Dr Blackman-Woods
I have heard what the Minister has said, and we obviously look forward to seeing what he has to say in the White Paper about resourcing planning departments. We will closely monitor the budget for neighbourhood planning to ensure that it goes to all areas that need it. I look forward to seeing what he comes back with regarding the new homes bonus and CIL. It is important that he keeps what is happening with deprived areas on his agenda, so that everything is done to support their bringing forward a neighbourhood plan. On that basis, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Dr Blackman-Woods
I beg to move amendment 13, in clause 5, page 5, line 6, at end insert—
“(2BA) Such statements of community involvement must include a right for members of the community to be heard.”
This amendment would give local people and communities a statutory right to be heard.
The Chair
With this it will be convenient to discuss amendment 14, in clause 5, page 5, line 6, at end insert—
“(2BA) Such statements of community involvement shall include measures to enable local parish councils to be set up in a streamlined and speedy manner.”
This amendment would make it easier for new parish and town councils to be formed.
Dr Blackman-Woods
The amendment is straightforward. We all know that the National Association of Local Councils has been calling for this for some time. It said in evidence:
“We are calling for a right to be heard, or a right of appeal, so that where decisions are taken contrary to a neighbourhood plan and a local plan, people may have some reference to the Secretary of State or Minister to take a final view”.––[Official Report, Neighbourhood Planning Public Bill Committee, 18 October 2016; c. 44, Q73.]
That, in essence, is what the amendment asks for. I will be interested to hear what the Minister has to say.
Amendment 14 seeks to make it easier for a community to set up a local parish council. We know that areas that have a parish council are much more likely to bring forward a neighbourhood plan. One way of facilitating neighbourhood plans is to ensure that it is easier to bring forward parish councils. I look forward to hearing what the Minister has to say.
Gavin Barwell
Amendment 13 raises some interesting questions. Communities already have a right to be heard in the planning system in lots of ways. I can run through some of them. Local people have the chance to have their say as local plans and neighbourhood plans are developed, when individual planning applications come forward and if a planning application is turned down and there is an appeal, and they can call for applications to be called in by Ministers. I think that the amendment is probing, because its wording is generic and does not define what the right to be heard is, although I guess that is essentially what the hon. Lady was referring to.
The Government’s view is that there is no need to change the law in this regard. Most of the concerns of the NALC and others—the hon. Member for Bassetlaw has expressed them powerfully—are partially addressed by clause 1, and the policy changes in the White Paper that we want to make will also help significantly in that regard. The other powers talked about here—for example, the power to ask me to call applications in—already exist. I am reluctant to use those powers too frequently, because my starting point is that the planning system should be locally driven. However, if there are planning applications that I think raise issues of national importance about the way national policy is playing out on the ground, I am happy to call them in. In the three months that I have been doing this job, I have called in a couple of applications where I felt a decision had been taken that was contrary to a neighbourhood plan and I wanted to look at the issues myself. I think that the fundamental issues that the amendment probes are already in the system or will be addressed by the policy changes in the White Paper.
Amendment 14 was the amendment that most interested me. I do not agree with putting it into law, but I agree with the fundamental idea behind it. I think that the hon. Member for City of Durham is saying that we may want to tell people in a statement of community involvement how to go about setting up a parish council, because that is clearly one of the ways in which they could drive a neighbourhood plan. If I was writing a statement of community involvement, I would absolutely think it appropriate to put that in it, but I am not sure that we want to get into the business of writing into statute what the content of statements of community involvement should be. Indeed, when we come to clause 6, I will address why the Government do not want to get into the business of saying what is a good or bad statement of community involvement. We have to trust local councils to set that information out. If the hon. Lady is reassured by me saying that that is the kind of information that I would expect to see in such statements, I am happy to put that on the record.
Dr Blackman-Woods
Yes, I did find that reassuring. With amendment 14, we were seeking to ensure that communities knew how to set up a parish council and that that process was made as easy as possible. On that basis, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 5 ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned. —(Jackie Doyle-Price.)
Westminster Hall
(7 years, 6 months ago)
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Looked-after Children/Social Work Reform
(7 years, 6 months ago)
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Neil Carmichael (Stroud) (Con)
I beg to move,
That this House has considered the Fourth Report from the Education Committee of Session 2015-16, on Mental health and well-being of looked after children, HC 481, and the Government response, Cm 9284, and the Third Report from the Education Committee of Session 2016-17, on Social work reform, HC 201, and the Government response, HC 733.
It is a pleasure to serve under your chairmanship, Mr Gapes. I am grateful to the House for the opportunity to debate the Select Committee on Education’s work on children’s services and the mental health and wellbeing of looked-after children, and on social work reform. Our Committee has a large and growing set of responsibilities, so it is an extremely good use of time to debate two of our reports at once. I appreciate the House’s indulgence. I pay tribute to the specialist advice we have received from Dr Matt Woolgar; Professor David Berridge, our adviser on such matters; and Marion Davis, also one of our advisers. All three contributed massively to the value of our work, and that is much appreciated.
During our inquiries, we heard from children in care, care leavers, foster carers, social workers and other front-line mental health workers. We visited the excellent services provided by Trafford Council, and we took evidence from a young woman in care and two carers with experience of mental health services. Our meetings with children and professionals in Trafford and Westminster were crucial to the recommendations we made. I thank all those who gave their time to speak to us; they spoke in a very helpful and frank manner.
There are significant challenges to overcome in both looked-after children’s mental health and social work reform. The responses from the Government to our recommendations were, frankly, a little disappointing. We need urgent action to solve problems with mental health services for looked-after children, but the Government have not acknowledged the urgency, and have passed the ball to an expert working group, rather than making the immediate changes that the Committee pressed for. Indeed, many of the people contributing to that working group will be similar to, if not the same as, those who contributed to our findings. Our recommendations on social work reform have largely been ignored. During our inquiry, it was clear that there are things that need to change, but again, the Department has not really taken what we suggested on board.
I shall start with the Select Committee’s inquiry on the mental health and wellbeing of looked-after children. Following a report on child and adolescent mental health services by the Health Committee and an update to the Government’s statutory guidance, we felt that it was a policy area that required scrutiny, so we launched our inquiry in September 2015. Almost half of children in care have a diagnosable mental health disorder, and they are significantly more likely to experience poor health and educational and social outcomes than their non-looked-after peers. Let us not forget that children in these situations are children of the state, because of their special circumstances. Our inquiry took evidence from experts including Sarah Brennan, chief executive of YoungMinds; Professor Peter Fonagy from NHS England; and Natasha Devon, founder of the Self-Esteem Team.
In April this year, we published our report. We found that provision for looked-after children with mental health concerns is poor in many areas throughout England. That variance should be of concern to us all. Some local authorities are providing integrated services, with a strong focus on multi-agency working and support for key workers such as foster carers and school staff; others are not. A significant number are failing to identify mental health issues when young children enter care, and services are turning away vulnerable young people for not meeting diagnostic thresholds, or for being without a stable placement. So there is good and there is bad, which is not acceptable. We found that methods of assessing children and young people’s mental health and wellbeing as they enter care are inconsistent, and too often fail to identify those in need of specialist care and support. For that reason, we recommended that all looked-after children have a full mental health assessment, carried out by a qualified mental health professional.
Leaving the care system can be a time of significant upheaval and disruption, and the period is likely to be even more unsettling for care leavers with mental health concerns. In short, it is the cliff-edge problem. We found that support for young people leaving care is inadequate and based too heavily on inflexible age restrictions. We therefore recommended that care leavers be able to access CAMHS up to the age of 25, rather than the current age of 18, and that the initial assessments of those entering care be carried out more thoroughly and consistently.
We received a huge amount of evidence on the capacity of CAMHS to respond and treat looked-after children and young people. We heard too many times that CAMHS refuse to treat young people who are without a permanent settled placement. The young woman we took evidence from, to whom I referred earlier, said that she had been waiting for CAMHS for more than two and a half years, but had been unable to access services because she had moved a staggering 13 times during that period. We recommended that CAMHS never refuse to see children or young people without a stable placement, or delay access to services until a placement becomes permanent. In recognition of the distinct challenges that looked-after children and young people face, we recommended that they have priority access to mental health assessments by specialist practitioners, and that subsequent treatment be based on clinical need.
The Government’s response acknowledged the vulnerability of looked-after children and the need for timely and effective mental health diagnosis and treatment. We are pleased that the Government have set up an expert working group for looked-after children’s mental health and wellbeing; however, having conducted a lengthy and detailed inquiry on the issue, we are disappointed that so many of our recommendations have simply been referred to that group. We will monitor the working group’s progress, and look forward to receiving updates from its co-chairs in due course, because we are very interested in the subject.
Let us move on to the second report. At the start of the year, we launched an inquiry on the Government’s plans for social work reform—and they do have plans. Although the Government had previously made it clear that improving the quality of child and family social workers and children’s services was a priority, the lack of clarity on how the aim would be achieved meant that we believed it was an important area for us to look at. During our inquiry, we heard from social workers, social work academics, local authority leaders, and many more experts in the field.
Social workers deliver an incredibly important service to some of the most vulnerable children in the country, but evidence suggests that they are doing more work than ever before. Children’s social workers are managing increased case loads: we have the highest number of children in care for 30 years, and the number of children subject to a child protection plan has risen by 50% in the past five years alone. Just last month, Sir James Munby, the president of the family courts, issued a warning about what he terms a “clear and imminent crisis” facing care proceedings, because in the past 10 years the number of care applications going through the courts has doubled. Despite those increased workloads, it is important to remember what an important job social workers do. The number of children who die due to homicide or assault has fallen by 69% since 1985 and remains in long-term decline. That is thanks to the hard work of social workers, police and others. This is not a story of social workers not doing things; the question is how they are led and resourced.
Although we can never be complacent when it comes to the safety of children, the Government need to ensure that in making reforms we do not forget about the good work that children’s social workers do across the country, which often goes unnoticed. On behalf of the Select Committee, I thank social workers for what they do, and I want that message to be amplified.
We published our report in July. We found significant weaknesses in the planned reforms, and recommended important changes. Existing career pathways are confusing, and provision of continuing professional development is inadequate and inconsistent. A national career development framework is urgently required. Children’s social workers need much more assistance after qualifying to enable them to specialise. That became increasingly obvious as we carried out our work. During our inquiry, we regularly heard that it is vital that social workers receive a generic start, with specialisation to follow afterwards. In the current system, however, that is far too difficult to achieve.
The Government’s reforms do not focus enough on tackling endemic retention problems. The average social worker’s career is only eight years long, compared with 16 years for a nurse or 25 years for a doctor. Almost a fifth of social work jobs are vacant, and they are mostly filled by agency workers. Poor working conditions, caused by high case loads, negative media coverage and the blame culture, are a threat to keeping good, experienced social workers in place. We need manageable case loads for those workers, and a national workforce planning system to forecast supply and demand. We also need to talk about social work in a positive way. I have done that already, but it is very important that we do so frequently. Without immediate action in these areas, experienced social workers will continue to feel under pressure and undervalued, and will therefore leave the profession.
One of the biggest problems facing social workers is the lack of a professional body. The closure of the College of Social Work in 2015 has led to a significant absence of high-profile leadership for the profession. A new body would take the lead on a number of crucial functions and so drive improvement in the sector, for example by defining CPD and the post-qualifying framework; endorsing courses; promoting practice excellence; and shaping national and local policy. That really is the No.1 priority and could address so many of the retention issues. The Government should halt their regulatory reforms until they have figured out a way to help the sector to replace the College of Social Work.
Finally, we could not ignore the wider context in which children’s social workers operate. While we welcome the attempt to introduce innovation, the Government’s proposals are untested. We do not believe that there should be any expansion of the independent trust model until there is clear evidence that it works. Unfortunately, despite the Government agreeing with us on so many issues in their response, that response seems to show that they are determined on their course of reform and unwilling to reconsider it.
Tim Loughton (East Worthing and Shoreham) (Con)
I declare my entry in the Register of Members’ Financial Interests.
Does my hon. Friend share my frustration that too often there appears to be an obsession with changing structures, titles and the nature of the vehicles delivering children’s social care, when what really makes a difference are some of the things that he has already mentioned, such as making sure that we do not have 20% vacancies for social workers in certain parts of the country—that is why there is such a huge variance in the number of children taken into care in different local authorities—and looking at the quality of the outcomes for these children? We should do that, rather than obsessing about the system, which is supposedly there to help these children. It is the people on the ground and to whom my hon. Friend quite rightly paid tribute—the too-often maligned social workers—who really help, but they are damned if they do and damned if they don’t.
Mr Carmichael
I thank my hon. Friend for making some really strong points. He is absolutely right about the obsession with structure, as opposed to the importance of the people operating within it. That is why I first of all pay tribute to social workers, and believe that their leadership and reputation need to be enhanced and protected through a professional body; that is something that the Government have to think about carefully.
Although we are happy to hear that the Government plan to consult on many of their reforms, we still believe that there is a lack of detail on how to tackle some of the trickier issues, such as the retention of social workers. Moreover, there is a lack of detail on how some of the proposals are to be taken forward, and how extensive and binding the consultation exercises are likely to be.
The Government said in their response to our report:
“We agree that the development of a strong professional body for social work is important.”
However, they also said that they thought such a body
“would be one established by the…profession.”
We are a bit disappointed about that, because we believe that the Government need to be much more proactive in their efforts to replace the College of Social Work. I hope that the Minister will address that point when he rises to his feet.
The sector needs to be more heavily involved in this area, of course, but the Government have previously invested in the College of Social Work, and there is still a key role for them to play in the creation of a new professional body; it is not sufficient for them to say that the profession needs such a body while doing nothing to encourage its creation. The establishment instead of a Government-controlled regulator seems to suggest precisely the opposite: that the task of defining social work, and good social work practice, is being taken out of the hands of social workers. That is the opposite direction of travel to the one that we recommend. That is worrying, and we are concerned that the Government have not fully understood the significance of the move towards regulation, and away from supporting the creation of a professional body.
Social workers face pressurised working conditions, and the Government response suggests that action on that issue is not being taken quickly enough. Our recommendation that social workers nationally have manageable case loads was rejected. That was despite Ofsted saying that the local authorities that were judged to be good had almost always set manageable limits for their social workers—something we picked up on in Trafford. A recent National Audit Office report that was very critical of the Government’s action on improving children’s services also raised the issue of social worker case loads. We are disappointed that no immediate action on this front is planned.
In some cases, the Government’s response was to reject our recommendations without sufficient justification. For example, despite agreeing that the assessed and supported year in employment was important for newly qualified social workers, they rejected the recommendation to make it mandatory. We are unclear as to why they did that.
Both our inquiries revealed the pressures that children’s services are under. Our inquiry on the mental health of looked-after children found that CAMHS are overwhelmed, and that many specialist teams that offered targeted support for looked-after children have been abolished due to financial pressures. In some areas, children’s social workers face having unmanageable case loads, which is leading to low morale and poor working conditions, as was mentioned earlier by my hon. Friend the Member for East Worthing and Shoreham (Tim Loughton).
Experienced social workers are exiting the profession in record numbers. As I have said, Ofsted has found that the local authorities that are judged to be good tend to be the ones that give their social workers manageable case loads; the Government must take account of that.
We also found that services were inconsistent across the country. I have already said this, but it is important to note that initial mental health assessments are highly variable. Many local authorities are not meeting their statutory requirement to ensure that all children are properly assessed on entering care. I would have thought that was of fundamental importance. While there are some good authorities—we cannot deny that, and we should always support those that are good—that support their children’s social workers with good leadership, access to continuing professional development and manageable case loads, far too many are still not in that category, or even in the vicinity of it. There are regions with significant retention problems, and it is clear from Ofsted reports that plugging the gap with agency workers does not bring about a satisfactory solution.
Both inquiries found that training and development for professionals in children’s services are poor. Children’s social workers lack a professional body, and their access to CPD is inconsistent and inadequate. Put simply, it is not good enough. A new professional body for social work, created with help from the Government, could define professional standards for qualifying and post-qualifying practice, and be given a mandate to define the CPD and post-qualifying pathways for the children’s social work profession. This debate is about a profession and the people within it, and we believe that they should have an appropriate body.
Training and support for foster and residential carers is highly variable, and many local authorities fail to equip carers with the knowledge and skills needed to support looked-after children with mental health difficulties. Foster and residential carers are professionals who need comprehensive and regular training in how properly to support children and young people in their care. We have recently launched a further inquiry on fostering, and we will look in more detail at the issues in the coming months.
Despite the Government agreeing with much of our thinking, the responses to both reports lacked the determined aim to implement change in an urgent fashion. It is hugely disappointing that the Government referred so many of the recommendations to an expert working group. On such an important and pressing issue, delaying action and effectively passing the buck is not helpful.
Tim Loughton
I share my hon. Friend’s frustration, but the frustration is worse than that: some of the recommendations in his Committee’s excellent reports relate to recommendations made in the Munro review, which reported in 2011. Since then, very little progress has been made on those recommendations, which have been looked at, researched and looked at again, and they remain unimplemented.
Neil Carmichael
I am grateful for my hon. Friend’s support. He underlines points that I have made, but he is absolutely right about the lack of progress since 2011.
I am pleased to have the opportunity to talk about these issues in the Chamber, because both reports are emblematic of our interest in the whole question of children’s services. I thank all the Members who have come to participate. Two of my colleagues on the Education Committee have done so, and I am grateful to them. We have a huge chance to make an important difference in both these critical areas. It is clear that we all share the objective of improving outcomes for children in care, and I do not doubt that the Minister is as keen as we are to see improvement. I am grateful for all that he has done in the past to demonstrate that commitment. We need a response to my questions, and an approach to our two reports that suggests a sense of urgency and a commitment to ensuring that we can deliver a better future for children in need of support and help. I commend those thoughts to the House, and I hope that the Minister will answer my questions in due course.
Jim Shannon (Strangford) (DUP)
I thank the Chair of the Education Committee, the hon. Member for Stroud (Neil Carmichael), for setting the scene so well. As many in the Chamber will know, I have a particular interest in the mental health and wellbeing of children, which the report looks into in some detail. I want to provide some comment on the report, while being ever mindful of the way that the hon. Gentleman has clearly set out the issues, where the needs are, and perhaps where they have not been met but we hope that they will.
The issue of foster children is of particular interest to me. I know that it is of interest to many others, inside the Chamber and outside it. I commend the members of the Education Committee on the report and the hard work and effort they have clearly put into it. They should be praised for that, and I put that on record.
The welfare of children is one of the most important issues that this House can deal with. Decisions made in this place have the ability to help or hinder a child in their progress towards becoming a contributing member of society. We only get one chance to have a great childhood. We do not get a chance to relive it, just as we do not get a chance to relive later stages of our lives. I was blessed to have a great stable home life, with parents who loved and supported us no matter what the issues were. I have attempted to give my sons a great childhood, and I do what I can in my granddaughters’ lives to see them happy and contented.
The thrust and the theme of the report, I suggest, is how we can look after children at the earliest stage. My home is not perfect. As a father I have done things that I probably should not have done. I have made mistakes, and were my boys here they would laughingly list some of my not-so-finest moments—I am sure there are many—but there is love in our home, and that is important. The report gives us a chance to understand the issues in fostering and the need for foster parents.
It breaks my heart that 2,212 children were living with foster families in Northern Ireland as of 31 March. It is a devolved matter, and I understand that. That figure is nearly nine-tenths—88%—of the 2,500 children in care looked after away from home in Northern Ireland. There are approximately 2,095 foster families in Northern Ireland, and the Fostering Network estimates that fostering services need to recruit a further 170 foster families in the next 12 months.
I have spoken about the issues before in the House, and they are real in my constituency. I have a particular interest in fostering, and I meet people every week in my office who are affected by it. It breaks my heart when I meet women who have given their children up because, although they love them, they cannot give them the life they deserve and need or, sometimes, the care they need. Sometimes love just is not enough. Help and support should be available for those brave families who make sacrifices to give their child a good start in life. The issues are real, and the report’s important recommendations would ensure that children who have to be looked after away from home are helped in the best way possible and the strategy in place is the best available.
In particular, I echo the recommendation that the Government amend the statutory guidance to make it clear that a strengths and difficulties questionnaire should be completed as a starting point for every child entering care. I commend the Committee on that helpful recommendation. Children who are put into care feel that loss the most keenly. They feel abandoned, unwanted and unloved, and those feelings can lead to emotional wounds that may never heal if they do not receive the care and attention that is needed. Putting that recommendation in the report goes a long way to addressing the issues that I perceive in the system. The mental health assessment is one step in ensuring that children get the care and support they need for healing to take place, for them to be integrated into society and to make them feel part of society.
I was surprised to learn that the CAMHS team does not help those who are not in a long-term home. While I can understand the rationale—a stable environment helps the process—I have also seen at first hand the tremendous job that the team can do. That is not just in my constituency, but across the whole of the United Kingdom of Great Britain and Northern Ireland. My office has helped many people who would swear by the difference that our local CAMHS team in Newtownards is able to make with children. The team does marvellous work, and I would like to see a wee bit more focus on that. I agree with the Committee report that the CAMHS team must be available to foster children who are put into foster homes for any length of time, and I hope that that is done as a matter of urgency. I commend the Committee for that recommendation, which is a step in the right direction.
The Minister is assiduous and responds to our queries on every occasion, in every position that he holds. I look forward to his response. I congratulate the Committee on its hard work and commend Committee Members who have made a significant contribution on this emotive and essential topic. I look forward to seeing how the system for looked-after children will improve when the recommendations come into action, and how we in Northern Ireland can follow suit.
Lucy Allan (Telford) (Con)
It is a pleasure to serve under your chairmanship, Mr Gapes, in a debate on this very important issue. The voices of children in care are seldom heard and too often their needs are forgotten. When society does take an interest in the needs of children in care, the focus is far more often on their physical needs than on their mental health and emotional needs, which mirrors the way that mental health is generally treated in society, so I am delighted that the Education Committee pursued this inquiry, involved highly respected experts and professionals and brought forward this report and its recommendations.
As the Children and Social Work Bill is currently going through the House of Lords, this is a real opportunity to make substantial change to the lives of the most vulnerable, and I do not want the opportunity to pass us by. I will come on to the Government’s response to the inquiry later, but if the report had not been carried out, I would be more enthusiastic about the setting up of a Government expert working group on the mental health of looked-after children. I gently remind the Minister that the Education Committee has taken evidence from expert witnesses, all of whom are cited in the excellent report. It took a year to get the report to this stage. To start that process all over again by setting up an expert working group, which may well come to similar conclusions, would feel like a reluctance to take meaningful and prompt action.
The mental health and emotional needs of a child in care must be considered as at least as important as any other need that a child in care may face, because, whatever the reason for being in care, these children have suffered the trauma of losing parents, siblings and all that is familiar to them—friends, schools, a sense of belonging, a sense of identity—and may carry with them a stigma or sense of being unwanted or unloved, as the hon. Member for Strangford (Jim Shannon) noted. During their time in care, they may have experienced multiple placement breakdowns, which will only intensify the feelings of loss, rejection and instability. There can be no doubt that children in care will need help and emotional support to overcome that trauma and move forward with their lives. They will need tools to overcome the challenges and build resilience to cope with whatever has come their way.
As has already been mentioned, children coming into care receive statutory health assessments, but mental health is not always addressed and certainly not on an equal footing, as the Committee heard in evidence to the inquiry. Sometimes the difficulties that children in care face are put down to challenging behaviour, rather than being defined and addressed as mental health needs.
I used to sit on fostering and adoption panels and often we would sit around discussing and worrying about smoke alarms and stair gates and the physical needs of children being taken into care. There was always a glaring omission. We would ask foster carers about how much exercise they took or how many cigarettes they smoked, but we did not ask them how they would deal with the emotional needs of a child who had experienced trauma and loss. We did not even attempt to discuss a child’s mental health needs or the help and support foster carers would need in order to address those concerns. That happens because mental health needs are less visible, and for that reason, we must not ignore them. There must be recognition that children in care will have a higher risk of developing mental health problems.
Members will know from surgeries that it is hard enough to access CAMHS when there is a devoted parent to fight a child’s corner. If the child is in care, moving around from placement to placement, they are not entitled to access to CAMHS until they have a stable placement. Priority access is therefore even more important. A child cannot get access if they are 16 to 18-years old and not in school, and yet a child in care is less likely to be in school at that age. Children in care and care leavers will seldom have someone to fight their corner. It is the state that has taken the decision to take the child from their family and, having done so, it is for the state to make adequate provision for their needs.
It is not enough just to say that the help is out there. There are difficulties with the availability of mental health provision for all children, including with accessing and navigating the system. Accessing mental health care, asking for help and overcoming stigma is hard enough for any young person, even with a strong, supportive family, and we have to acknowledge that.
The Minister has done much to support young people in care and care leavers, and I am sure that he will have carefully read the report and its recommendations. He will be more familiar than most with the outcomes for care leavers, and I will not rehearse them here, but it is arguable that those poor outcomes are directly connected to the neglected emotional health and wellbeing needs of young people in care, which is why this inquiry is so important.
Young people in care need help to build resilience to overcome the difficulties that they face, rather than being left to develop their own coping mechanisms, which may so often fail them. A key part of our inquiry was listening to the experience of children in care. As my hon. Friend the Member for Stroud (Neil Carmichael) said, we took evidence from care leavers and foster carers, both in Committee and informally. We met young people in residential care settings and heard about their experiences of mental health provision. Their views informed the report, which is why I urge the Minister to take the recommendations seriously. I hope that the findings of the inquiry will generate greater awareness of the mental health needs of young people in care and the development of a stronger cross-departmental approach, with greater accessibility to mental health care provision for our most vulnerable children.
I have read the Government response. I know that the Minister has long been a passionate advocate for children in care and care leavers. In that context, it was a disappointing response, knowing as I do how much he cares about these young people. I say to the Minister: please do not put the report on a shelf and let it be forgotten. I was concerned to hear my hon. Friend the Member for East Worthing and Shoreham (Tim Loughton) say that the Munro report had made similar recommendations, which appear to have been put on the shelf and forgotten. The Children and Social Work Bill is a real opportunity to focus on the mental health and emotional needs of children in care. It cannot be an opportunity that we miss. Children in care need every single opportunity to overcome the challenges that they face. I urge the Minister to do all that he can to ensure that prompt action is taken and the report is not just put aside and left to another day.
Marion Fellows (Motherwell and Wishaw) (SNP)
It is a pleasure to serve under your chairmanship, Mr Gapes. I thank the hon. Member for Stroud (Neil Carmichael) for his sterling good work steering forward these two reports, as chair of the Education Committee, of which I am a member. I thank the hon. Member for Strangford (Jim Shannon) for his well-informed speech and his passion and commitment to foster children and to bringing up children in the best way possible. I make special mention of the hon. Member for Telford (Lucy Allan). As part of the Education Committee, I have seen her strong passion for children in care and especially for their mental health.
I find serving on the Education Committee difficult and strange, because I am used to different circumstances. I do not want what I am about to say to be taken as saying that we always do everything better and well in Scotland, but there are significant differences, which it is my job to bring forward to the Minister for consideration.
Improving the lives of vulnerable families and children should be a key priority for any Government, so it is concerning that the Government have failed to take a robust cross-departmental approach to this matter. We are rightly proud of the way we do things in Scotland, but we continue to review the legislation. The First Minister recently announced a major root-and-branch, independent review of how Scotland treats its looked-after children. We welcome the UK Government’s desire to ensure that children in care have the support they need as they move into adult life.
In Scotland, we implement something called “Getting it right for every child”, which is at the heart of everything we do that affects children. It is child-focused, it is based on an understanding of the wellbeing of the child and on tackling early needs, and it requires joined-up working, which is not necessarily happening in England. The Looked After Children (Scotland) Regulations 2009 absolutely embody the framework of “Getting it right for every child”.
I was at the recent Scottish National party conference when our First Minister made an emotional and heartfelt declaration about what she wants to do for Scottish children, but so much has already been done. There is also demand for children and adult mental health services in Scotland, and there are far too many children who are unseen and whose needs are unmet. Our Minister for Mental Health has taken on board the First Minister’s desire to push forward the needs of children—especially looked-after children—and ensure that their mental health needs are dealt with. For example, in the next five years, the Scottish Government will invest £150 million in mental health innovation. Some of that money will be used to cut waiting lists, but £50 million is specifically earmarked to support better access to child and adult mental health services.
The Scottish Government have also doubled the number of psychologists in the services. The Minister needs to look at that, because it is all very well having services, but if they are not accessible or if people—especially children—have to wait too long, further problems will be created that will have to be addressed using Government funds from other places further down the line. It is vital that we support our children across the UK, especially those for whom we are responsible as legislators. When I was a local councillor, I was a corporate parent, so I know about the responsibilities that many people have. It is vital that we properly look after children early in their lives so they do not develop greater issues.
Many children who grow up in care go on to live useful, helpful lives. The staff who work with looked-after children deserve our support and commendation, because many of them do sterling work and improve children’s lives. However, we know that nearly half of children in care suffer mental health issues, half the adult prison population were in care as children and, worst of all, a young person who has been in care is 20 times more likely to be dead by the age of 25 than a young person who has not. Those facts all reflect on the mental health of children in care.
Much more needs to be done to improve outcomes for those in care. The Scottish Government’s review will look at the underpinning legislation, practice, culture and ethos, but that is on top of what they are already doing. They have already pledged to listen to 1,000 young people’s care experiences. That is happening at all levels. It is only by fully engaging with looked-after children, care leavers and those who deliver services on the front line that we will create a care and social work system that gives vulnerable children the very best start in life and the love and care that all children deserve.
The chief executive officer of Who Cares? Scotland supported the First Minister’s pledge to review what is happening for looked-after children, saying:
“This review has the mandate to literally save lives. It is a line in the sand. The appreciative nature of this review, with care experience at its core, makes it a global first. Care experienced people will now be integral in the design of a system that will give them a much better chance to not just survive, but thrive.”
As I said earlier, I do not want this to be a “We’re doing better in Scotland” speech. I want vulnerable looked-after children everywhere to be given the help they need. However, I encourage the Government to look to Scotland and emulate the drive and good practice there.
Social work was reformed in Scotland quite a while ago—in fact, I cannot remember the exact date. However, I find it difficult to understand why social work in England falls within the remit of a number of Departments. It incorporates education, health, employment, social security and potentially other areas. Education and health are almost in silos and compete with each other to help families and young children, who are at the core of what they do. It is important that the UK Government have a truly cross-departmental approach to social work reform, because that will ensure that disadvantaged families do not fall off the radar, if for example they are referred by officials in one sector and require support from another.
Although it is encouraging that the Government have undertaken a number of reforms to social work in the light of shocking high-profile failings, such as the baby P case, it is disappointing that the evidence shows that the reforms have not been given sufficient time to be implemented and to mature. That point was made strongly, as I have already said, by the expert witnesses who gave evidence to the Education Committee’s inquiry.
There is a real risk that resources will be exhausted on trying to put into practice new structures, rather than improving existing outcomes. For example, the Committee said in its recommendations that it is not convinced of the need to establish a new regulator, as the Government have already spent too much time changing regulatory bodies. Another change would require a further injection of significant public funds and place an unfair financial burden on individual social workers.
If the structure of the social work sector is badly and hastily implemented, it could have an utterly devastating impact on the lives of real people. I think we all agree with that. We could see catastrophic, and potentially deadly, failings in the system, and risk leaving hard-working social workers to bear the brunt of attacks for failings, as they have in the past. It is all too easy, across the United Kingdom, for social workers to take the blame for systemic failures. Nobody enters social work to do things badly; they do it because they want to help. We must help them to help the people who require help.
In Scotland, when social work is reformed, the Government take a holistic approach and meet all the bodies concerned. For example, when the Scottish Government implemented “Social Services in Scotland: a shared vision and strategy 2015-2020”, it was just that: a shared vision. The strategy was developed by the Social Work Services Strategic Forum, chaired by the Minister for Children and Young People. Social Work Scotland and the social work regulatory body in Scotland were involved, as were local authorities and the care inspectorate. I could go on. There were many public bodies involved. The strategy represents a strong commitment to working in partnership across organisations and with Government to deliver that vision for high-quality and effective social work. I am sorry to say that, as a member of the Education Committee, I sometimes do not find that shared vision, so I again urge the Minister to work across existing bodies to push forward social work reform to the benefit of the users of those services.
In Scotland, we have had a joined-up way of working for many years and some of the Select Committee’s expert witnesses actually said that, so I urge the Minister please to look at what we do in Scotland. I am not saying we are a world-beater or that we have the best, but we definitely have a focus and a vision, and we are years ahead in regulation and in working together across all Departments. We want to get it right for every child, which I am sure is also the Minister’s sole objective.
Mrs Emma Lewell-Buck (South Shields) (Lab)
It is a pleasure to serve under your chairmanship, Mr Gapes. I thank the hon. Member for Stroud (Neil Carmichael) for opening this important debate, and his colleagues on the Education Committee for their excellent work on the two reports that we are discussing. I of course acknowledge the Minister’s commitment in this area, and I know that he and everyone in the Chamber are dedicated to improving the lives of our most vulnerable children. That is why it is all the more disappointing to read the Government responses to the reports.
The Committee based its recommendations on an extensive body of evidence from experts in the industry—evidence that clearly showed why more action and less talk are needed. In the “Mental health and well-being of looked-after children” report, the Committee rightly recommended that a dedicated mental health assessment by a qualified mental health professional be completed for all looked-after children, so that healthcare professionals and local authorities have a solid and consistent foundation on which to plan the best care for a child.
The report further recommended that all children who need access to child and adolescent mental health services get it in a timely fashion. That makes total sense when we consider that almost every looked-after child has endured some form of trauma, from those who have suffered the most unimaginable brutality to those whose parents, for whatever reason, cannot care for them or protect them from harm. In fact, as the hon. Member for Stroud said, at least 45% of children entering care have a diagnosable mental health condition, and 75% of children in care have some kind of emotional or behavioural difficulty. It is therefore astonishing that the recommendation was not accepted.
The Government’s record overall on CAMHS is dire, with children waiting years for specialist help. With that in mind, will the Minister tell us what the ratio of CAMHS workers to looked-after children in England is, and whether he think that the number of CAMHS workers is high enough? Will he also tell us what impact he thinks his Government’s cuts have had on CAMHS overall?
I was similarly disappointed that the Committee’s recommendation that CAMHS be made available to all care leavers up to the age of 25 was rejected. The Government believe that the configuration of local mental health services is a matter for commissioners to decide, on the basis of local need. Even the statutory guidance, however, is clear: decisions on the transition between services should be based on the needs, wishes and feelings of the young person concerned, not the cost considerations of local commissioners. Once a young person turns 18, they are referred to adult mental health services, and we all know that the Government’s record on adult mental health is even more concerning, and that budgets for mental health trusts continue to be slashed.
The Government response does not specifically answer the question of how CAMHS provision will be improved, or how they will tackle the huge waiting lists, which lead to unnecessary suffering. From my own experience, I know that there is nothing worse than working with a child or young person who is desperately crying out for professional help that is simply not available. The social workers and carers who have to deal with these situations day in, day out, have to watch the young person in their care suffer while they feel completely helpless. That is why the Government’s rejection of the Committee’s recommendation that foster carer and residential carer training be supplemented with mental health and emotional wellbeing modules is disappointing. If carers are not fully equipped to do their job, their ability to sustain care for a child can be reduced. That could have a devastating impact on a child, who is left to forge—sometimes many—new relationships with different carers.
I noticed that the Government responses deflected many answers on to the new expert working group on the mental health of looked-after children. I make no criticism of the experts appointed to the group, but further consultation is wholly unnecessary, as the hon. Member for Telford (Lucy Allan) said, especially since both the co-chairs have already submitted evidence to the Committee. Consultation will simply cause further delays, and delay means that more children will suffer unnecessarily. Will the Minister tell us how many children he thinks will be left suffering on waiting lists while that review drags on? Does he accept that the condition of many of them will deteriorate as they wait for services? I have seen that myself in children waiting for long-term fostering or for adoption. A child’s pool of potential carers will decrease as their condition worsens, and as the years go by and he or she gets older, the pool decreases even more. For far too many children, that means never getting to feel the security and stability that long-term fostering or adoption can bring—all because of unnecessary delay.
Heartbreaking as that is, there are far worse scenarios for children in the system, which is why social work reform is so important. The Committee’s report on social work reform makes a number of common-sense suggestions. I appreciate that the Minister has a difficult job. Getting things right for children and families is not an easy task; it is difficult and complex terrain. Successive Governments have battled with how to provide the best and safest social care system for children, but now there is an abundance of official and other expert advice to draw on, so we should see some action and results—but we do not.
I imagine that the Minister in his response will tell us about the Munro report, the Step Up to Social Work programme, Frontline, the Innovation programme, What Works centres, partners in practice, the intervention regime and “Putting children first”, the Government’s vision for excellent social care by 2020. What the Minister might not speak about is the recent National Audit Office report, “Children in need of help or protection”, because it finds that actions taken by the Department for Education over the past six years to improve the quality of help and protection services delivered by local authorities for children have not yet resulted in services being of a good enough quality, suggesting systemic rather than only local failure.
In fact, the demand for help and protection is rising. Over the past 10 years, there has been a 124% increase in serious cases—ones in which a local authority believes that a child may be suffering, or likely to suffer, significant harm. Furthermore, the varied spending on social work has been found to be not related to quality. Will the Minister explain why he thinks that all the Government’s initiatives and changes over the past six years are not yielding results? Many of the NAO’s findings certainly echo the Committee’s analysis that there are significant weaknesses in the Government’s agenda, and that the reforms focus on
“changing structures potentially to the detriment of the people delivering this key public service.”
What is needed in the social work profession is continuity, stability and confidence, and a Government who can hold their nerve on how best to help children and families by putting in place and embedding good policies. The Government are failing to get the basics right. Those basics are: reducing social worker case loads; preventing experienced professionals from quitting the profession; training social workers in a holistic way; not fast-tracking them, and forcing them to specialise before they have even been trained in the basics; and amending IT and the bureaucratic process across the board to achieve the goal of getting social workers where they want to be—out from behind their desks and seeing the families with whom they work.
It is an absolute must that we start looking after social workers. A new professional body could go some way to assist us in that. It is simply no good demanding excellent social workers and excellent practice if social workers are not appropriately supported, including with safe working environments. Social work is a dangerous profession, with unmanageable case loads, impenetrable bureaucratic structures and poor pay. It makes me angry that social workers are not afforded the same protection and status as other professionals. We all need to remember that for every social worker who becomes unwell and cannot do their job, there are sometimes up to 40 children who lose the help and support of that social worker, who, for many of them, is the only constant in their life. Such a working environment would not be tolerated in Parliament; Parliament should not tolerate it for our social workers. Why will the Minister not implement the Select Committee’s recommendation about the wellbeing of the workforce?
A common feature of the Government’s response to the Select Committee’s recommendations on social work reform was deflection to future initiatives and reports, and future analysis of initiatives that are already in place. All I know about the future is that our children’s futures are at risk under this Government. The overall fact remains that the Government’s response does not tackle the crisis in social work because it does not address how to deal with the significant increase in the sheer number of people accessing the service. To do so, the Minister would need to admit what we all know: that the Government’s closure of Sure Start units and removal of early years help and family support, and their cuts, punitive welfare policies and austerity measures, are impacting everywhere, and nowhere more starkly than in the children and family social work arena, which by its very nature is interlinked with wider societal and economic issues. The Minister does not need to take my word for it; he could listen to the chair of one of the Government’s expert panels, who has said that
“investment is welcome, but we have to recognise that is against a backdrop of other financial pressures…and a history of disinvestment across the system for quite a number of years.”
The Opposition welcome the Select Committee’s work, but not so much the Government’s response, or their inability to accept the overall consequences of their policy making, and the drastic impact that those policies are having on everyone, but most importantly, vulnerable children and families.
The Minister for Vulnerable Children and Families (Edward Timpson)
It is a pleasure, as ever, to serve under your chairmanship, Mr Gapes. I welcome this debate and the interest that the Chair of the Select Committee, my hon. Friend the Member for Stroud (Neil Carmichael), has shown in prioritising these issues for inquiry by that Committee.
There is a lot of ground to cover. It is always encouraging to get a ringing endorsement of everything that the Government are doing, but there are clearly still some elements of concern that I need to address. In so doing, I recognise, as others have, that hon. Members who are present share my commitment to improving the lives of vulnerable children. That is our joint mission and the underlying motivation for everything that we do in our privileged roles.
The Government have participated in and responded to the Select Committee’s inquiries, but I want to take the opportunity to provide some further detail and, I hope, reassurance that we have a comprehensive, considered and compassionate plan to help to bring about the improvements that we all want to see to vulnerable children’s lives. I remind hon. Members that in July this year we published our “Putting children first” strategy. I am grateful to the hon. Member for South Shields (Mrs Lewell-Buck) for reminding everyone of that important document, which I believe represents the most thorough and ambitious reform agenda in this area for some considerable time. I am not complacent, and neither is that report, but it is a serious attempt to try to get children’s social care to where it needs to be.
The strategy sets out fundamental reforms across each of the three pillars on which the social care system stands or falls. The first and foremost of those is people and leadership. I agree with my hon. Friend the Member for East Worthing and Shoreham (Tim Loughton) that our system stands or falls on the quality and commitment of the people driving it. The second pillar is practice and the environment that we create for that practice to be able to improve, which we must do in a way that does not stifle practice through over-regulation and process-driven activity. Again, I agree with the hon. Member for South Shields that we do not want social workers sitting behind computers; we want them to work face-to-face with families to try to improve their lives, and we want to avoid risk-averse behaviours, of which process-driven activity is often a part.
The third and final pillar is governance and accountability. We need to be sure that what we are doing is effective and actually works. We must develop innovative new models for the pursuit of practice excellence, which has to be at the heart of this work, and remain firmly focused on improving outcomes for children. Only by taking action across those three fundamental pillars will we bring about the kind of transformational change that is needed in children’s social care.
As other Members have acknowledged, children’s social workers can have a genuinely life-changing impact on our most vulnerable children. Our vision is of a social work profession made up of fully confident and highly capable social workers who have been trained in the right way and have the right knowledge and skills, and access to the right supervision and support.
Mrs Lewell-Buck
The Minister may be coming to this, but I am curious: how will the Government measure the success of “Putting children first”?
Edward Timpson
I will come to how we will ensure that we are making progress. Several milestones are set out in “Putting children first”, which is a programme of work through to 2020. We will be able to measure progress by whether inspections of children’s services and our outcome measures for children in care improve, and we will have a whole suite of indicators that will give us a strong understanding of whether the work we have done and the measures we have put in place are having a positive influence.
Over the last six years, we have begun to lay solid foundations for achieving that vision. We have appointed a chief social worker, who has introduced the first definitive statements of child and family social work knowledge and skills. Working across Government with the Department of Health, we have developed the first four teaching partnerships, whereby employers and universities work together to ensure that university courses provide students with the right on-the-job skills. One of the problems in the past—I have seen this for myself—has been that too many social workers have come into practice without any first-hand experience of what it is like to be in a child protection situation. We need to change that.
We have invested almost £50 million since 2010 in Frontline and Step Up, which I make no apologies for mentioning. Those programmes have brought more than 770 high-calibre recruits into social work. We have expanded our assessed and supported year in employment programme to support newly qualified social workers entering the profession. To help the Chairman of the Select Committee on whether ASYE should be mandatory, I can tell him that 151 of the 152 local authorities take part in that course. We want to review that and see whether that level is maintained, because we think ASYE is an important part of social workers’ early experience of gaining professional knowledge.
We are under no illusions about the remaining challenges; there is still much more to do. The recent National Audit Office report on child protection performance was a timely reminder that the performance of children’s social care services is still far too variable across the country. We must acknowledge that although many local authorities provide a consistently effective core social work practice, the majority still struggle to do so.
The reviews by Professor Eileen Munro, Sir Martin Narey and David Croisdale-Appleby, among others, have given us a much deeper understanding of the issues faced by children’s social care. They describe a system in which initial social worker training is not universally preparing students for the challenges of the job, as I alluded to, and those already doing it often lack the time, specialist skills and supervision needed to achieve real change for children and families. The reviews also describe a system that focuses too much on management and is governed by prescribed approaches rather than excellent practice, and conclude that services have not always been designed around vulnerable children and that innovation has not been given enough space to thrive.
We are determined to address those challenges, as outlined in our “Putting children first” strategy. Going further and faster on our plan to drive up the skills and status of the children’s social work profession is central to that endeavour. To that end, I am working in partnership with my colleagues in the Department of Health to establish a new, bespoke independent regulator for social work that will set higher standards for social work both in what is expected of professionals in order to practise and in what is expected from universities and others providing initial social work education. It will also create a more rigorous approach to continuing professional development in social work—an area the Chairman of the Select Committee rightly raised—ensuring that social workers continue to develop throughout their careers, as called for in the report. In the past there has been too little recognition of the role this area has to play.
I am also bringing forward a new system of post-qualifying assessment and accreditation for child and family social workers. That is a key plank of our reforms, because it will provide, for the first time, a consistent way of ensuring that child and family social workers have the right knowledge and skills to do their jobs well. The new assessment will incentivise employers to invest properly in the development and support of their staff, as well as ensuring a mechanism for recognising the specialist skills that child and family social workers possess. Again, that work aligns with the recommendations of the Select Committee’s report. The consultation, which hon. Members are keen to see, is planned for publication before the end of the year, and I am sure they will want to contribute.
The assessment and accreditation system will also, for the first time, establish a consistent, clearly structured and well supported career pathway for child and family social workers, which will allow them to deepen their skills as they take on additional responsibility and, crucially, keep them in touch with practice. One of the problems we can all recognise is that in the past too many good social workers, as they gained experience, rather than remaining close to families and working their own cases, moved into management and behind desks. We therefore lose that expertise and the new crop of social workers coming through do not get the support they could have gained from those experienced social workers if they are no longer working with them.
Practice skill and expertise will be the most highly prized and rewarded asset across the whole career, from newly qualified social workers all the way through to practice leaders. Together, the reforms provide an opportunity and a solid platform from which to raise the status of child and family social work in the way the profession needs and deserves. They create the conditions for a strong, confident social work profession where practitioners are properly supported to thrive in very challenging front-line posts. The profession, and the children and families it serves, should expect no less.
I want to address the point made by the Chairman of the Select Committee about a professional body. It is right to say that over three years the Department for Education, with support from the Department of Health, spent more than £8 million of public money trying to set up the college of social work, but despite that significant investment the college was unable to secure the sufficient membership required to make it sustainable. However, I re-emphasise, as I did in evidence to the Select Committee, that it is important that there is a strong professional body for social work. It has to be sustainable, but also have a sense of ownership by the profession. It cannot be top-down; it has to be a bottom-up organisation. We want to continue to work with the British Association of Social Workers, other representatives of the workforce and the Department of Health to see how we can start to nurture and craft a professional body in that mould so that we have something that truly represents social workers and can go into bat for them when they need that.
It is also important to recognise that giving social workers the right knowledge and skills and setting high standards for practice will not on its own bring about the step change we need. Excellent social workers need to work within supportive and permissive organisations where they are given the flexibility to use their expertise in ways that have the greatest impact on children and families. As Eileen Munro identified, good social work is not about following processes and procedures, but too often that is what we have turned it into. We need a dynamic practice system where testing and evaluating new ways of working and learning from the best is the norm. We see that in other parts of public service, so why not in children’s social care?
It is our children’s social care innovation programme that is starting to foster that way of working. We have already funded over 50 projects and announced £200 million more for the future. We are also developing the first ever What Works centre for children’s social care. That is an important development, because for the first time there will be a repository of good practice for social workers to use and have confidence in for the work they do. We are also overhauling the serious case review process to better extract national learning when things go wrong.
We want to go further. The Children and Social Work Bill, which is currently before Parliament, includes a new power to innovate. Through that power, we are looking to say that, ultimately, excellent front-line social work practice should be defined not by the Government or Parliament but by local practice leaders, with more freedom to operate within a clear, safe statutory framework. Our “partners in practice” local authorities—eight of the highest-performing authorities—see the power as an important and potentially transformative opportunity.
The power has been criticised by some in the Lords. It is right that we debate that and that the quality of debate in Parliament is strong, but let us have a debate based on facts, not on unfounded propositions. Let me be clear: we do not want to privatise child protection services and we will not privatise child protection services. Indeed, there are already clear legislative restrictions on the outsourcing of children’s social care functions. It was never the intention to use the power to innovate to revisit those. However, to put it beyond doubt, we are amending the Children and Social Work Bill to rule out any use of the power in that way.
We will not remove fundamental rights or protections from children either. Our aim is to strengthen, not weaken protections. We want to let the best local authorities, led by leading-edge practice leaders, work in ways with more potential to make an actual difference for children instead of watching and waiting, hamstrung by excessive prescription.
I will quote from Eileen Munro, because we still value her views on how we are performing and the work we are doing:
“I welcome the introduction of the power to innovate set out in the Children and Social Work Bill. This is a critical part of the journey set out in my Independent Review of Child Protection towards a child welfare system that reflects the complexity and diversity of children’s needs. Trusting professionals to use their judgment rather than be forced to follow unnecessary legal rules will help ensure children get the help they need, when they need it.”
She is not a lone voice: the Children’s Commissioner, the Society of Local Authority Chief Executives, the Children and Family Court Advisory and Support Service, Catch22, Achieving for Children and the children’s social worker all hold similar views.
Mrs Lewell-Buck
The concern about the Children and Social Work Bill seems to be that the Government have been completely unable to say exactly which functions local authorities will be able to opt out of. Bearing in mind that a lot of the functions they have around children protect them from harm and keep them safe, is it not understandable that there is huge concern out there about where the Government are going with that?
Edward Timpson
Perhaps I can give the hon. Lady some examples of primary legislation where local authorities have asked that they be able to use the power to innovate where that is currently restricted in law. Under section 25 of the Children Act 1989, independent reviewing officers must be appointed for every looked-after child and they have to have regular reviews. We know that children often say that they do not like that. There are children who are in very stable placements for whom that can be disruptive and they ask for that not to happen, whereas other children need more intense oversight from an independent reviewing officer. That is one example of where local authorities want to have that flexibility.
There are also some anomalies that I am not sure many people appreciate. For instance, under section 66 of the 1989 Act, any child who is not cared for by a family or a guardian for 28 days counts as privately fostered and as such receives the same duties as other looked-after children, with visits and so on. That ends up capturing children coming over to language schools, which the local authority have to go and visit, to check on their welfare, despite those children being on a foreign exchange trip. Those are just some examples of measures where the local authorities that have shown an interest—we have to remember that this is a permissive power—would want some flexibility, in a safe and controlled environment, to test to see whether there is a different way of providing services that is absolutely focused on improving children’s outcomes more than anything else.
Edward Timpson
Briefly, because I want to make sure I finish my speech. I have not got on to mental health yet.
Mrs Lewell-Buck
Just one quick point for clarity: am I right to assume that the Minister is saying that anything is open as long as the local authority applies to the Secretary of State, or will it be just the two examples he has given? I am struggling to see what exactly is in the mix. This seems to be open to anything.
Edward Timpson
There are restrictions to the legislation that local authorities can apply to be disapplied. A local authority has to make the application itself and it has to consult with the local area. It then has to submit that application to an expert group, which will consider it and publish its findings. Even then, there has to be an affirmative resolution in both Houses before that local authority can test out that new way of working. I met the hon. Lady yesterday to talk a little bit about this and other areas of shared interest. I am happy to provide her with more details and I also suggest that we agree to meet again, so we can make sure that all of the information is provided.
The chairman of the Education Committee, my hon. Friend the Member for Stroud, raised the issue of trusts, which I will touch on briefly. I in no way think that creating children’s social care trusts is a panacea for all ills. In most cases, when a local authority fails it will be able to improve its services with the right support, as is happening in Cumbria, Surrey and Buckinghamshire at the moment. However, where failure is persistent or systemic, it is right that we look carefully at whether the capacity for improvement exists in the local authority. We now have commissioners who go in and undertake a three-month review before reaching their conclusions and recommendations on the way forward.
Leaving services within council control is sometimes found to be the best approach to securing improvement, as in Bromley and Dudley, for example. In other cases, local authorities themselves agree that an independent trust model will create extra improvement capacity and help to turn things around, as is the case in Birmingham and Sunderland. Sometimes, where failure is deep-rooted and an authority does not have the capacity to improve itself, service control must be removed by my Department. I will not apologise for doing that. We cannot simply sit back and watch authorities fail over and over again, year after year, without trying new ways to bring about improvement. There is a growing bank of evidence following recent Ofsted inspections in Doncaster and Slough of services improving following the move to a trust after years of failure. Ofsted has particularly highlighted the strengthening of leadership and management in those trusts, which are critical components of any successful organisation.
To give the Chairman of the Committee an opportunity to respond and conclude the debate, let me now turn to my hon. Friend’s interest in the mental health and wellbeing of looked-after children and care leavers. I thank members of the Education Committee for their insightful report and commend them for their ongoing interest in this important area. I know all too well, from my personal experience, the nature of the challenges that children in care often face and the impact that can have on their mental health and the health of those who care for them. That is why my Department is taking strong action to improve support for children in care and care leavers, including the introduction of the staying put duty, so that all young people leaving foster care can continue living with their foster families after the age of 18. More than 50% of 18 year-olds in foster care have taken up that opportunity.
We are also undertaking a national stocktake of foster care to better understand current provision and how needs are matched with skills. I look forward to working with the Education Committee in looking at the evidence it gathers for its own report in this area. We are piloting the staying close programme, which enables young people leaving children’s homes to maintain links with those homes, as recommended by Sir Martin Narey’s review of children’s residential care. We published a new, cross-Government care leavers strategy, “Keep On Caring”, which sets out what we will do right across Government to ensure that care leavers get the support they need and also outlines our ambitions for trialling new and innovative ways of working. We are also taking legislation through Parliament that will, for the first time, define what it means to be a good corporate parent for children in care and care leavers.
When the state decides a child’s needs are such that we must take on parental responsibility, it has an overwhelming duty and responsibility to be the very best corporate parent it can be. It is right that, like all good parents, that responsibility continues when young people reach early adulthood. The new corporate parenting principles ensure that responsibility is given the weight and significance it deserves across the whole country. I hope hon. Members will support it.
Central to delivering our responsibilities as corporate parents is the promotion and support of the mental health and wellbeing of children in care and care leavers. That is an issue we take very seriously and on which we want to make timely and sustainable progress that tackles the shift in mindset needed around mental health and brings improvements to practice. Only this week, my noble Friend Lord Nash introduced an amendment to the Children and Social Work Bill that will explicitly capture the role of local authorities in promoting the mental health of looked-after children as a core part of the definition of a good corporate parent, which is significant.
I share the concerns of the hon. Member for South Shields about child and adolescent mental health services. They have been undervalued and underfunded for far too long, and we need to do far more to tackle that. The Government are investing £1.4 billion over the life of this Parliament to drive improvements in mental health services for children and young people. In addition, we are making a specific investment of more than £10 million to support the mental health of young people in secure children’s homes, who are some of the most vulnerable people in our society.
In order to get mental health support for children in care right, the Department of Health and the Department for Education have, as hon. Members have said, established an expert group to ensure that the emotional and mental health needs of children and young people in care and adopted from care and of care leavers are better met. It is a collaboration between social care, education and health colleagues, parents and carers and care leavers themselves. It is a comprehensive piece of work to map out the care pathway for a looked-after child in need of mental health support; it is not just looking at the point of entry into the care system.
The principle of having a mental health assessment for all children being brought into care is instinctively attractive, but I know—and I know others who share this view—that we have to look at each child individually. There will be some children who, at the point they come into care, are still suffering great trauma from an event that has led to them going into care. That is not the right moment for them to have such an assessment. There are other children, such as newborn babies and others, for whom it would also not be appropriate.
The expert group is gathering pace and gathering that evidence. As my noble Friend Lord Nash said on Report, we will take seriously its recommendations. Those may come during the duration of the group’s work and may also include potential changes to legislation. That is a commitment we have made, and we want to make progress and make sure we do not lose this opportunity.
The reports discussed today pose a range of challenges to the Government. I welcome the healthy debate they have generated, because they help to keep the issue at the top of the agenda and maintain the momentum, not just for me and my Department but right across Government. I share the ambition of other hon. Members, and we are united in our commitment to improving the lives of our most vulnerable children. Hon. Members should be in no doubt that I recognise and accept that there remain deep-seated issues we need to resolve, but I and the Government are more determined than ever to show the resolve and commitment needed to rise to those challenges with our clear and ambitious plan for fundamentally reforming the system. Our vulnerable children deserve no less.
Neil Carmichael
It is a great pleasure to wind up the debate. I thank the Minister for his commitment to the issues we have raised and for the answers he has given to many of our questions. I have no doubt that he is determined to improve the lot of our children in care and of our social work profession as a whole. I am pleased that he referenced Eileen Munro’s focus on judgment and I look forward to seeing that developed further. It is encouraging that he is going to help to nurture and craft a professional body. That is important for social work. We certainly found in Trafford that effective leadership, good training, good continuing professional development and a combination of levels of leadership amounting to a delivery that was unified, transparent and open was extraordinarily beneficial. We want to see that across the whole country to deal with the variance in local authorities that the Minister acknowledged.
My hon. Friend the Member for Telford (Lucy Allan) referred to our forthcoming inquiry into fostering. We look forward to hearing from the Minister about the Department’s fostering stocktake. We have written seeking information about that in readiness for our inquiry.
The Minister can be absolutely sure that we will not rest until we see improvement. The work we have done, the fact we have charged the debate, as the Minister acknowledged—we are grateful for that—and also the changes taking place in the Bill currently going through the House, not least Lord Nash’s amendment, are all good signs. I leave the debate with the sure knowledge that the Education Committee believes these matters are important and urgent.
Motion lapsed (Standing Order No. 10(6)).
National Arthritis Week
(7 years, 6 months ago)
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Jim Shannon (Strangford) (DUP)
I beg to move,
That this House has considered National Arthritis Week 2016.
It is a pleasure to serve under your chairmanship, Mr Betts. I am delighted that today, for the first time in five years in this House, there is a dedicated debate in Parliament examining the impact of arthritis. It is a privilege to speak in this House; that opportunity is not something we take for granted. It is good to come along to expound and inform on an issue that is so important. I am very pleased to see the Minister in his place. I think he and I will be in this position many times, debating health issues that interest us. It is good to see right hon. and hon. Members here. I know they will all make significant contributions.
Arthritis, along with musculoskeletal conditions, has a massive impact on people’s everyday quality of life. While I am disappointed that we have not spoken sooner in the past five years about this topic, I am pleased that time has been allocated today by the Backbench Business Committee, which I thank, for such an important debate that enjoys cross-party support. Opposition Members seem to be well balanced, and I am pleased to see the hon. Member for Congleton (Fiona Bruce), who is always here; I thank her for that and look forward to her contribution.
I should make it clear at the outset that the title of this debate is a slight misnomer, as the National Arthritis Week campaign has been replaced by the “Share Your Everyday” campaign, led by Arthritis Research UK, which is encouraging the public to share their stories of living with arthritis so that research is better targeted at the issues affecting most people with arthritis. We need to break the stigma of talking about pain and loss of dexterity and mobility, so that we can help to alleviate it. I urge Members to show their support for the campaign by sharing their own stories. I know there are Members here today who will do so, and that will be a very effective way of underlining this issue.
We should begin by discussing arthritis, because the burden on the individual is clear and substantial. It brings pain, isolation and fatigue and stops people doing the things that matter to them, keeping them from the world of work, from enjoying leisure time and from spending time with their families. Those are all key issues. I want to thank Arthritis Research UK—some people from it are in the Gallery—for supplying us all with notes and information to help the debate develop. We thank it for the hard work it does.
Arthritis should not be seen as a by-product of old age. For some it is, but for others it is not. The examples that I, along with others, will give show that arthritis is not only an elderly person’s ailment. It affects thousands of young people and millions of working-age people. One in five people over 50 have osteoarthritis in their knee. There is a young girl in my constituency who I went to appeal with several times. She suffers from chronic inflammation of the bowel—a by-product of severe arthritis, which led to her being medically retired at the age of 28. This is not an elderly person’s disease by any means.
The burden of arthritis on society warrants greater debate. Arthritis has an impact in a number of ways, particularly on our health and care system. Each year, 20% of the population consults a GP about musculoskeletal problems. The NHS spends £5 billion per year on arthritis— its fourth largest programme budget. That puts into perspective the enormity of what we are looking at today. I was struck by the stories shared on the Facebook page set up for this debate, so many of which are genuinely heart-breaking. One that stood out was that of a young girl of 27 who is waiting for a hip replacement, having suffered from arthritis since she was 20. That underlines, again, that this is not an old person’s disease. It knows no barriers, no age restrictions and certainly no class or creed barriers.
There is also the issue of workplace absence, with 30.6 million working days lost to the economy each year. The indirect cost to the economy of arthritic conditions is £25 billion. We do not necessarily want to focus on the financial aspect, but we can look at the figures as an indication of how important it is to address this issue and to raise awareness through this debate.
The scale of the burden is growing, with an ageing and increasingly physically inactive population. The numbers are sure to rise in the coming years. I briefly want to describe some of the characteristics of arthritis. When we talk about arthritis, we are talking about a number of different musculoskeletal conditions within the categories of inflammatory conditions, joint conditions and fragility falls and fractures, which are key factors.
The first group is inflammatory conditions, such as rheumatoid arthritis, where the immune system rapidly begins attacking the joints in the body. Those conditions affect around 1% of the UK population, including people of all ages, and have serious consequences. The second group is a range of conditions that cause musculoskeletal pain, the most common being osteoarthritis. Some 8.75 million people have sought treatment for osteoarthritis, with the true number of sufferers likely to be even higher. As is often the case, we are just scratching at the surface. The gradual onset means the condition mainly affects the elderly, but 2.36 million working-age people in the UK have sought treatment for knee osteoarthritis. Lower back pain, the most common form of disability in the UK, also falls into this group of conditions.
The final group is osteoporosis and fragility fractures. Osteoporosis is a silent and painless disease, but it causes fragility fractures after falls from standing height that afflict mainly but not exclusively elderly patients. The disease causes weakening of the bones and some 300,000 fragility fractures in the UK per year, of which 89,000 are hip fractures. The impact of those fractures on elderly, frail patients can often be severe, taking away their mobility, independence and, in some cases, their lives. We have to consider that.
Arthritis is not inevitable. Preventive measures must be the focus in tackling it. We need to address the risk factors for arthritis and musculoskeletal conditions. Links between being overweight or obese and long-term conditions such as heart disease, cancer and diabetes are well known—I declare an interest, as a diabetic. I am glad to say that I am almost back to the weight I was before I got married, which is quite something. I am trying to keep off all the sweet things, if I can. However, being overweight or obese is also a major risk factor in various forms of arthritis. It is the single biggest avoidable cause of osteoarthritis and increases the likelihood of developing inflammatory conditions such as rheumatoid arthritis.
Every one of us, as an MP, is aware of these issues because our constituents come to see us. In many cases, we deal with related benefit issues, and that is how we come into direct contact with people affected by arthritis.
Christina Rees (Neath) (Lab/Co-op)
I am grateful to the hon. Gentleman for securing this really important debate. These conditions cause not only physical but psychological problems. A girl came to see me, aged 19. She said:
“Arthritis is unpredictable. It flares up suddenly. Medication problems make it difficult for me to manage. It is hard to explain to my friends why I cannot do something I could do last week, because I look so normal.”
Does the hon. Gentleman agree that we have to look at the damage these problems are causing youngsters in their everyday lives, including in how they associate with their friends?
Jim Shannon
I thank the hon. Lady for her intervention and for outlining how arthritis can affect people at the age of 19. I am aware of a constituent who is even younger, which really surprises me.
Rising levels of obesity, combined with our ageing society, could lead to a near doubling in the prevalence of osteoarthritis in the UK by 2035. The Government need to make sure that musculoskeletal health is always included in assessment of the population’s health locally and nationally; that the benefits of physical activity for people with musculoskeletal conditions are emphasised in health promotion messages; and that, when programmes targeting lifestyle factors such as obesity and physical inactivity are being designed and delivered, their impact on musculoskeletal health should be explicitly included. So there are many things the Minister could respond to, and I look forward to that.
Above all, the Government need to make sure that effective physical activity services are available locally. This is crucial, and I hope colleagues from all parties will join me in calling for a National Audit Office review of physical activity services for people with osteoarthritis so that services help people across the UK to maintain good musculoskeletal health. We need to address that.
I want to speak about benefits as well. I know about osteoarthritis and rheumatoid arthritis because I have sat across a table from a person helping them fill in disability living allowance forms, now personal independence payment forms. People tell me their story, because we need to know their story when we help them fill in the forms. We need to know what they have done and what they have discussed with their GPs and consultants. The issues are very clear. I know that the Minister is not responsible, but for the record I implore the Department for Work and Pensions to make sure that, when it comes to filling in PIP forms, people have their full medical story told. They need an understanding person at the other end of the phone. I am not being disrespectful to anybody, but sometimes when we phone up about PIP, the person at the other end of the phone does not understand the medical details. I respectfully and gently say to the Government that we need someone on the phone who understands the medical condition and understands the issues and can therefore empathise with the person who does their 10-minute interview at the first stage of their PIP form before they do the full form. I think every MP would recognise that particular issue.
As I mentioned earlier, falls and fractures are a pressing public health issue among older people. Falls are the second greatest contributor to the burden of disability in the UK and a major cause of mortality. Around 300,000 fragility fractures occur each year in the UK, including some 89,000 hip fragility fractures, with 1,865 cases submitted to the national hip fracture database in Northern Ireland. Hip fractures are the most common cause of accident-related death in older people, resulting in some 14,000 deaths in the United Kingdom every year. We know that 20% of hip fracture patients die within four months of their injury and 30% within a year. This is a growing problem. Projections show that by 2036 hip fractures could account for 140,000 hospital admissions in the UK each year, with care and treatment costs rising to £6 billion. Let us put that into perspective and do the sums. Let us address the issue early on and do away with the cost impact further down the line.
We need more joined-up treatment in such cases because, once a first break occurs, it is vital that a second break is avoided. A fracture liaison service, the FLS, which provides targeted assessment and treatment for those with fractures, is widely regarded as the best way to address the problem of preventing future fractures. It is both a clinically effective and a cost-effective solution. Despite this, only 37% of local health services in England have a fracture liaison service. We need local commissioners to ensure that a fracture liaison service is linked to every hospital and held to account for commissioning fracture liaison services that cross the boundaries between health and social care so that the two marry. It is important that it does so. Arthritis may not kill, but it attacks what it means to live. The normality of life will never be the same with arthritis.
The condition limits people in doing the things that matter to them, but with greater personalisation and help in managing their condition, the NHS, care services and our welfare system can help people push back the limits of their condition. Too few people with arthritis currently have a care plan. Many people cannot quickly access physiotherapy without a GP referral, and people with arthritis need more help so that they can be in work, which is where most of them want to be if only that was possible. People with arthritis know how their condition affects them better than anyone else. Personalised and person-centred healthcare is therefore essential to move forward.
Care planning is an approach that people with long-term conditions can use to manage their health and wellbeing. It is based on a two-way conversation with a healthcare professional where goals are shared and actions agreed. If we could arrange that, we could help them. A better system should be in place to make sure that that happens. This can offer important benefits to people with arthritis, yet only 12% of people with arthritis currently have a care plan. If it is only 12%, there is something wrong and we must address that. That number needs to increase if we are to enable more people to manage their condition.
There are other tools that health and care services can use to enable people with arthritis to manage their conditions more effectively. Physiotherapy is a clinically effective therapy that can substantially reduce pain and restore movement for people with arthritis. Again, is it available for everyone? If it is not, it should be. I gently ask the Minister how can we make that happen. I look to the Minister, as I always do, for a sympathetic and understanding response.
Self-referral to physiotherapy is a system that lets people go directly to an NHS physiotherapist without a GP referral. This system is associated with improved health outcomes and patient experience. It is good that it is cost-effective and reduces the burden on GPs. All people with arthritis in Scotland and across much of Wales can already access physiotherapy directly. We have many friends and colleagues here from Scotland, and I know that they will make contributions that I suspect will indicate what is being done in Scotland. I must say I am envious of some of the things being done there. I would love to see those things in place in Northern Ireland and across the whole of the United Kingdom.
In the rest of the UK, for example, only a third of clinical commissioning groups in England offer self-referral and it is still only being piloted in Northern Ireland. That needs to change. When inflammatory conditions such as rheumatoid arthritis strike, delay can be a major risk factor and the clock starts ticking once symptoms develop. Early identification and treatment is needed rapidly to control disease, minimise long-term joint damage and avoid lifelong pain and disability, but the NHS does not currently assess people with rheumatoid and other forms of early inflammatory arthritis—EIA—quickly enough, and national guidelines are not being met. Again, I gently say to the Minister: if the guidelines are not being met, what are we doing to improve that?
A recent clinical audit by the British Society for Rheumatology found that only 20% of people who see a GP with suspected rheumatoid arthritis or EIA are referred to rheumatology specialist services within three days, and only 37% of people referred with suspected rheumatoid arthritis or EIA are seen by a specialist within three weeks. Again, that needs to be addressed and I again look to the Minister for a response on that. Local commissioners across the UK need to achieve earlier diagnosis of inflammatory conditions. Arthritis and other musculoskeletal conditions are the most common diseases in our working population, and as the population gets older, an even greater proportion of workers will have conditions that include osteoarthritis and back pain. Those workers want to keep working, so we have to improve the system of healthcare to enable that.
Many people with arthritis want to work, and they can with the right support. However, only two thirds of working age people with a musculoskeletal condition are currently in work, compared with 74% of those without health problems. What is more, the rate of employment for people with arthritis is 20% lower than for people with no condition. We need better support to enable people with arthritis to work and we need to promote the Access to Work scheme that is in place, which pays for practical support and equipment. It is good that we have such a system, but I want to see better utilisation of it and fiscal incentives for employers to provide health and wellbeing initiatives that promote musculoskeletal health.
It is vital that more is known about people with arthritis so that research can be targeted at what matters most to them, but, worryingly, key data are not being collected. Arthritis Research UK is working to increase the quality and availability of data about the experiences of people with arthritis and about the public services that improve their quality of life. Arthritis Research UK and Imperial College London have developed a model for estimating prevalence using the existing NHS data currently available in England. I encourage all Members for English constituencies to visit the Arthritis Research UK website to get access to the data, which I understand will soon be available in Scotland, and later in Northern Ireland and Wales. We have a lot to do to catch up.
However, not enough data on people with arthritis are being collected, and that limits our understanding of the prevalence of the condition and action that can be taken in response. Moreover, data that are collected are not uniformly classified across the system. Definitions of musculoskeletal conditions used in other national data sets, such as those for benefits, are inconsistent. National survey content may need greater co-ordination. Again, I say gently and with respect that it is a question of how to do things better. I am speaking very quickly, Mr Betts, because I am conscious that other Members want to speak. I am probably rushing faster than usual, but I hope everyone can follow what I am saying.
A pivotal issue is the need to protect and build the UK’s excellence in medical research, so that researchers can continue working on a cure for arthritis. How important it is to find a cure. The centres funded by Arthritis Research UK have been at the forefront of research aimed at improving the lives of people with arthritis in the UK. It is marvellous and encouraging that they have uncovered breakthrough treatments that push back the limits of the condition. In the 1990s, centres supported by Arthritis Research UK—it has given us all the information—discovered that a molecule called tumour necrosis factor was causing the disruptive auto-immune inflammation of joints. The anti-TNF therapy that they developed has freed millions from the pain and disability caused by rheumatoid arthritis; it was also an inspiration for the field of biologics, medicines that use the body’s own molecules to combat diseases. It is crucial that that work, and the work of all medical research charities, should be supported by the Government in the long term with a real-terms increase in science spending. It is not something for the Minister to respond to, but I would seek his assistance and support on that point.
Within the life sciences sector, substantial investment by medical research charities drives improvements in health and generates wider societal and economic benefits. In 2013, medical research charities invested about £1.3 billion in UK medical and health research, which represents more than a third of all publicly-funded medical research in the UK. The Government have recognised that our science base is a vital national asset— a view that I and all Members present, including the Minister, subscribe to—and they have reaffirmed their intention to make Britain the best place in the world for science. We all support that ambition. It is crucial to uphold that commitment, through a real-terms increase in science spending over the long term.
That would include bolstering the charity research support fund, which provides an uplift to support charity-funded research in universities. It is a marvellous asset, investing a lot of money in research. That joint funding of research ensures that charitable donations are invested directly in research that meets the needs of people with medical conditions. In 2013, the Government’s £198 million investment through the CRSF leveraged some £833 million of investment by charities in English universities. That is a significant, marvellous, gigantic sum of money to help to find cures. When the House debates rare diseases—and we do our best in these matters—we often refer to the good work done by charities, universities and the relevant partnerships.
Christina Rees
My arthritis is in many ways self-inflicted; it comes from a lifetime of playing sport. I have no cartilage in my right knee, which is severely arthritic. Then there is my lower back—I do not think anything much works any more. Does the hon. Gentleman think that there should be more research on people who have played sport and become arthritic? In this day and age we advocate participation in sport, without really looking at the long-term consequences.
Jim Shannon
The hon. Lady is right and I think many of us recognise what she says. We encourage people who are obese to do more sport. We encourage young people, rather than playing on computers and laptops, as they so often do, to take part in more physical activity. However, we must consider the side-effects of that as well, and ensure that we help with them. I hope that what I have said about responding early has been taken on board. With an early response to signs of deterioration, the hon. Lady might not today be in as much pain; although I can tell hon. Members that I have seen her moving around the House, and she moves at some rate. The hon. Lady is obviously not completely restricted, and I say well done to her.
Without the CRSF there would be less funding to invest in world-class research. The UK’s medical research landscape is currently undergoing major change with the formation of UK Research and Innovation through the Higher Education and Research Bill. I expect that the whole House would agree that is crucial that the CRSF should increase in line with charitable investment, within the new research funding system, to safeguard research in the long term.
I look forward to hearing the remarks that will follow in the debate, including the personal experiences of arthritis of Members’ constituents—and perhaps also those of Members themselves. Much more can be done to improve the quality of life of people with arthritis, and to push back the limits of that worrying condition. We have an opportunity in Parliament to play a huge part in ensuring that our constituents get a better quality of life. I look forward to hearing the speeches of the shadow Minister, the hon. Member for Washington and Sunderland West (Mrs Hodgson), and of the Minister.
Mr Clive Betts (in the Chair)
The hon. Member for West Ham (Lyn Brown) has apologised in advance for having to leave early on account of new Front-Bench responsibilities. It is normal protocol for hon. Members to stay for the whole debate, but on this occasion I accept her apology.
Lyn Brown (West Ham) (Lab)
I thank the hon. Member for Strangford (Jim Shannon) for securing this important debate, and for his excellent contribution. I also thank the charities, such as Arthritis Research UK, that work every day to reduce the suffering brought about by joint disorders.
Last week was National Arthritis Week. The pain of arthritis is often invisible. Trying to explain its constant, chaotic pain to someone who has not lived with it can be very hard. A survey conducted by Arthritis Research UK found that 28% of women with arthritis feel that people do not really understand the pain they face. Despite trying to talk about it, they feel lonely with the disease. That is why today’s debate is so important. By talking about arthritis in this place, we can begin to tell people that they are not alone.
I want to do that in a literal sense, by sharing my experiences of arthritis. In March 2015, we were two months away from a general election, which, as Members on both sides of the House know, is a difficult, stressful and busy time to be a politician. As part of the shadow ministerial team, I was driving up and down the country with my tiny dog Cara in tow, visiting fire stations and sharing Labour’s plans for the future of the fire service. It should have been an exciting spring, sharing a vision that I was passionate about, and introducing my little four-legged friend to a bunch of soppy but very brave firefighters. However, it was made difficult as I had been experiencing mobility problems for quite a while, and it was not unusual for me to be in constant pain and experiencing stiffness. However, until that point I had been able to fight through. I had not considered that I had a condition.
In March, I finally hit a brick wall. I felt completely and utterly drained of energy and could barely walk more than a few steps. I had to drag myself up the stairs of my house by pulling on the bannister. I was unable to stand at street stalls for any length of time, or go canvassing. I contacted voters only on the phone, or at meetings where I could be completely sedentary. I needed help putting on my bra. I felt humiliated, embarrassed and a complete and utter failure. At the worst, I was struggling to stay awake for more than six hours a day. It can be imagined what that did to my mental health. The stress of not being able to fight that election on my own terms was overwhelming. The tiredness and pain were looked after by a specialist, but throughout that period I had no idea whatever of what the problem was. At times like that, the internet is not a best friend. My imagination was in overdrive. Only the support of good friends, comrades, my wonderful husband and my family got me through that election.
Let me be clear. I do not want to come across as some kind of stoic hero. I am not. I cried, mainly in my doctor’s surgery as I was trying to get some answers. The staff must have thought I was completely wet. I found it really difficult to cope with the condition and the demands of work at that time. I know that many people have that feeling, and it is little wonder that musculoskeletal conditions account for one in five working days lost to ill health in the UK.
Despite being referred to my arthritis service in November 2014, it was early May 2015 before I was finally diagnosed with seronegative inflammatory arthritis. I now know that fatigue is very common among sufferers of arthritis due to pain, stress and sleep disturbance. More specifically—this is not very well known out there—fatigue is a symptom of inflammatory arthritis. Chemicals called cytokines are found in the inflamed tissues and cause extreme fatigue.
At that point I was put on a course of methotrexate, which thankfully caused the aggressive nature of the condition to begin to recede, but it was still quite aggressive, and I needed additional medication to get me to where I am now, taking methotrexate and injecting myself every fortnight with CIMZIA, a biological injectable medicine. The pain and restrictive movement have now subsided considerably. A number of colleagues have told me as I walk around the House that I seem to be doing much better, and I am.
When I first met my arthritis specialist, she asked me what my goals were. I said I wanted to be able to walk Cara again, to wear heels and to play tennis, which would be some feat as I have never played tennis before. She laughed and said, “Let’s keep this realistic and start with walking the dog.” I am happy to say that with the support of the NHS I can now walk Cara for over an hour, almost entirely pain-free. At Christmas last year, I bought a pair of blue polka dot shoes as an incentive and a symbol of hope. I have worn them twice and, although they are not as high as those of the Prime Minister, or indeed our former shadow Chief Whip, my right hon. Friend the Member for Doncaster Central (Dame Rosie Winterton), they are a symbol of the progress I am making. What is more, I have just enrolled on a course of tennis lessons, which I will start in March next year, two years after I hit that dreaded wall.
I have had good treatment, advice and support, and I thank my doctors for that from the bottom of my heart. Ten million people in the UK suffer the pain of arthritis and not all are as lucky as I have been. Moreover, I am told that with an ageing population and rising physical inactivity, the number of people living with arthritis will rise. We must make sure that every patient has access to excellent treatment. Due to the high cost of the drugs and the guidelines of the National Institute for Health and Care Excellence, most patients have to wait at least a year before they can access the transformative biologics that have made such a huge difference to my life. I had to wait just over a year, and that year was hard.
The wait means that we are not controlling the condition at an early stage or enabling patients to stay active, independent and in employment. Surely this wait is not cost-effective to industry and the economy. I know that this is ultimately an issue for NICE, but making these drugs more widely available will transform arthritis care for many, as it has done for me. Let us be honest: there are problems with traditional treatments. Although methotrexate has been really important for me, it can have long-term negative effects on the liver, but coming off it is certainly not an option for me at the moment. I urge the Government to support research on the long-term effects of existing drugs, and to continue to support vital research into new treatments and life-saving drugs, so that we can help people to live pain-free into old age.
I will be positive: there have been substantial breakthroughs in arthritis treatment as a result of research funded by Arthritis Research UK. They include treatment for rheumatoid and inflammatory arthritis, and treatment to prevent miscarriages in women suffering from antiphospholipid syndrome, which again is something I have. If only I had known a couple of decades earlier.
World-leading scientists, working in British institutions, such as Leeds, Birmingham and Keele Universities, the Kennedy Institute at Oxford, and St Mary's hospital, London, developed these treatments. The biological treatments I am on have been developed here in the UK. We should be so proud of these achievements, but we must make sure that our medical research sector remains at the cutting edge. Now more than ever, the UK’s excellence in medical research is under threat. Many of us warned before the EU referendum that funding for medical research would be hit if we voted to leave. Vicky Forster, a researcher, wrote in The Guardian:
“many scientific disciplines will lose EU funding post-Brexit”.
That is certainly the case with arthritis.
Figures provided by Arthritis Research UK show that between 2011 and 2015 the EU contributed over £2.5 million to its projects. Those researchers have gone on to secure more than £18 million of European funding to support the next stage of their work. It should be a priority for the Government to maintain our world-leading medical research sector. To do this, they need to ensure that overall investment in UK science and research is protected and grown in the longer term.
The risk to research posed by Brexit does not stop at funding. Sir Paul Nurse, director of the Francis Crick Institute, said:
“Science thrives on the permeability of ideas and people and flourishes in environments that pool intelligence, minimise barriers, and are open to free exchange and collaboration.”
Leaving the European Union threatens this melting pot of ideas. In 2014-15, Arthritis Research UK committed more than £30 million to research that was hosted in the UK, but had collaborators in 13 European Union countries. If the Government want to make sure that our medical research sector remains as vibrant and as successful as it is, it is important to maintain the current ease with which those involved in medical research are able to travel and work across the EU and the UK.
We should be truly ambitious as a country and aim to expand arthritis research and medical research more generally, not merely preserve what we have. I have been told that structures need to be in place to encourage our NHS clinicians to participate in research. At the moment, this is not possible due to the demands on the NHS and a medical culture that puts research second.
Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)
I commend my hon. Friend on making this excellent debate so moving. She shows how important this issue is. She is a living, breathing example of why research is so necessary. She looks 10 years younger than she did last year.
Mr Betts in the Chair
I say to the hon. Lady that four other hon. Members want to speak, and there are only 20 minutes left.
Lyn Brown
In conclusion, Mr Betts, I hope that sharing my experience today has helped to play a small part in letting people who live with arthritis know that they are not alone. I was lucky to have good treatment. I can now walk Cara, wear heels and look forward to playing tennis. I want the Government to make sure that the UK remains a world leader in medical research, so that we continue to find ground-breaking treatments and more of the 10 million people living with arthritis can live their lives relatively pain-free.
Several hon. Members rose—
Mr Betts in the Chair
Four hon. Members want to speak, which means five minutes each. I call Fiona Bruce.
Fiona Bruce (Congleton) (Con)
Thank you, Mr Betts. I shall try to speak quickly, but possibly not as quickly as the hon. Member for Strangford (Jim Shannon), who I think holds the record in this House. I commend him for leading the charge in calling for this debate and for an excellent speech, in which he made some recommendations that I fully support.
As hon. Members are aware, Arthritis Research UK runs an annual campaign to shine a light on the experiences of people with arthritis, and the stories that have emerged are compelling. They give an insight into the pain, isolation and fatigue that is suffered daily by millions of people throughout the UK and caused by this debilitating disease. The campaign is powerfully titled “Share Your Everyday”. I have also heard stories from my constituency of Congleton of people living with arthritis and the detrimental impact on their quality of life. Time prevents me from quoting all the stories that I have, but I will give voice to one of those people. A lady called Christine Walker has given me permission to share her experience, and I pay tribute to her for her bravery in campaigning over many years, as I now know, to raise the profile of the need for greater support for those who suffer from arthritis.
Christine has severe osteoarthritis. The pain started in her knees when she was in her 30s. By her 40s, both hips were affected and she experienced pain doing everyday tasks such as getting out of the car. In her 50s she started to develop painful nodules on her fingers and had problems gripping objects. It became increasingly challenging for Christine to hold a pen, or a needle to sew. Chopping food was difficult, and paintbrushes slipped out of her hand. She even went so far as to say:
“Sometimes I just wanted to get a knife and chop off the lumps on my fingers; they were so painful.”
Of course, Christine is not alone. As we have heard, Arthritis Research UK states that back pain, for example, is very prevalent. Indeed, in my local authority area of Cheshire East, it is endured by more than 66,000 people—almost 18% of the population. Arthritis Research UK further states that about one in seven people in the UK lives with arthritis. At that national level, three in four people live with arthritis or joint pain. The Daily Telegraph and Arthritis Research UK have indicated in a recent survey that that pain stops them living life to the full. Just like Christine, many people are suffering severely owing to this crippling condition.
As the leading cause of pain and disability, arthritis is estimated to cost the NHS £5 billion a year. As we have heard, one in five people consults their GP about a musculoskeletal problem such as arthritis every year. That equates to 100,000 consultations every day. About 21% of patient visits to GP surgeries relate to arthritic conditions, and that goes up to more than 30% in the over-50s. The prevalence of these conditions is set to rise even further with growing levels of physical inactivity, obesity and an ageing population. That is why I greatly support the proposal from the hon. Member for Strangford that we improve advice to prevent, rather than just try to cure, this disease.
Why does arthritis so often find itself at the bottom of the heap, as far as acknowledgement of medical conditions is concerned, with treatment and care too often inadequate or inconsistent? The first annual report of the national clinical audit of rheumatoid and early inflammatory arthritis, published on 22 January 2016, identifies that although most services offer prompt educational support and agree targets for treatment with their patients, quality standards are not always met, so sufferers like Christine are often told that they can do little more than take painkillers. Unless prompt and decisive action is taken, people like Christine throughout the UK will be forced to continue to suffer terrible pain, isolation and fatigue. We need to accept that arthritis is a common and long-term condition that warrants the kind of treatment, monitoring and support that is available for other conditions. When we speak to people like Christine, it emerges as evident that a major focus must be on greater investment in patient education programmes, equipping and resourcing people to manage their condition better and endure less pain.
I want to relay Christine’s story as I come towards the end of my speech. In 2010, after years of having to rely simply on painkillers, Christine, along with about 250 others with hand arthritis, was invited to join a study funded by Arthritis Research UK at Keele University. It was run by Professor Krysia Dziedzic at Keele’s Arthritis Research UK primary care centre. The trial tested the effectiveness of exercises; an occupational therapist taught participants strengthening and mobilising movements.
Christine described the experience as life-changing. She was shown how to squeeze out a dishcloth and hold a kettle with two hands, and told about gadgets that would help her to open cans, peel vegetables and slice bread. Tasks she had avoided were possible again. The trial showed her practical ways of coping and made an enormous difference. NICE guidance recommends that those diagnosed with this condition be offered the opportunity to take part in such activities, including self-management programmes. We must ensure that NICE best practice guidelines are met in that respect. Much work is being done, but it needs to be offered much more widely.
I would like to give the last word to Christine and Arthritis Research UK. Christine says, “Taking exercise to help with my arthritis was a life-saver”. A rehabilitation specialist at her local gym in Cheshire taught her how to exercise better. She began a programme to build her muscles and paid more attention to her diet. She says:
“It’s all about strengthening problem areas—quads, hamstrings, calf muscles and the upper body…By doing this, I’m taking pressure off joints and easing pain. And today I keep the pounds at bay through healthy eating, reducing the pressure on my knees and hips…Because I have stayed active, I can keep gardening and have fun with my grandchildren.”
We should be giving that kind of help to everyone in this country.
Arthritis Research UK says:
“We need MPs to speak up for people with arthritis in the debate and call for decisive action so that everybody can live fuller lives with arthritis today, and without it tomorrow.”
Philip Boswell (Coatbridge, Chryston and Bellshill) (SNP)
It is a pleasure to serve under your chairmanship, Mr Betts. I thank everyone who has contributed to this important debate. Arthritis is a disease that affects many; most people know personally someone who suffers from it. I particularly thank the hon. Member for Strangford (Jim Shannon) for bringing this important issue and debate to the House.
The hon. Gentleman mentioned some of the good work carried out in Scotland. One initiative that is worth mentioning is self-referral for physiotherapy. A multi-centre national trial involving 26 general practices and 3,000 patients in Scotland identified that an average episode of care was more cost-effective when it followed self-referral for physiotherapy than when it followed GP referral. That equated to a saving of 25%. If the initiative was rolled out across Scotland, it would provide an average cost-benefit of £2 million a year. I hope that the Minister is listening.
A common misconception about arthritis is that it is a disease that primarily affects older people—something touched on by hon. Members in the debate. Arthritis affects people of all ages and takes many forms, a number of which, such as rheumatoid arthritis, can begin at a very young age—again, that was highlighted by the hon. Member for Strangford. Many individuals in the working-age population face the prospect of managing this long-term degenerative illness while in employment. Arthritis is not always a visible condition, and the prevalence of the disease among the working population can easily be underestimated.
In fact, according to Arthritis Research UK, musculoskeletal disorders are the most prevalent diseases in the UK working population. Worryingly, the statistics indicate that not enough is being done by employers to support employees affected by these conditions. It may be surprising to many people, but musculoskeletal problems cause the greatest number of working days lost; 30.6 million working days are lost each year. Back pain alone costs the economy about £10 billion a year.
Unfortunately, due to a lack of support, only just under 60% of people of working age with arthritis are in work. However, the responsibility to support those with arthritis lies not only with employers, but with the Department for Work and Pensions and the wider UK Government. The role that this Government must play in assisting those with arthritis and other musculoskeletal disorders in the workplace has become even more important with the growth of the gig economy and the prevalence of those who are self-employed, a large portion of whom are not self-employed by choice.
I have one constituent, whom I will not name, whose story is incredibly pertinent to the debate. My constituent was diagnosed with rheumatoid arthritis at the age of 14. For those who do not know, three quarters of people with rheumatoid arthritis are of working age when diagnosed. Two years after onset, one third of those diagnosed will have stopped working. Within 10 years, half are unable to work. The Disability Discrimination Act 1995 requires employers to make provision for employees with disabilities and long-term conditions. However, my constituent does not have an employer because he is self-employed. As I said before, this is not through choice, but from necessity, given the increased flexibility seen in the workplace over the past few years—by flexibility, I mean the mechanisms implemented for the erosion of workers’ rights that is so prevalent in our society today.
As my constituent is self-employed, he does not have the same protections as those who work for traditional employers. He cannot take time off work, as that would directly affect his income. He is not entitled to sick pay, and often finds himself having to work despite flare-ups. As he is a joiner—a job that is much more physical than others—he is particularly affected during a flare-up; even something as simple as driving to a job can be a struggle. However, he enjoys his work, has invested his career and a number of years in building up his skill set and, in addition, has a family to provide for and simply cannot afford to retrain for a different role. In many ways, he is stuck between a rock and a hard place, and he has both my sympathy and my full support.
The UK Government are not just failing to support those who are self-employed; there are also substantial failings in support for those employed in a traditional sense. As I am sure many of us here can attest, numerous constituents come to us for help because they have their personal independence payments unfairly stopped or reduced after assessments. This is of particular concern for those who struggle with arthritis, which is very much an invisible disability—a point touched on by the hon. Member for Neath (Christina Rees). In addition, symptoms can fluctuate in severity, which can make an accurate assessment of the impact of the disease difficult in a time-restricted interview setting. In a recent survey, almost three quarters of people with musculoskeletal conditions who had a face-to-face work capability assessment said that they did not feel that they had received sufficient support to help them get back to work. Clearly, more action needs to be taken.
In summary, no one should have to take redundancy because of a lack of support for a manageable long-term illness. I look to the Minister and his Government to do more to support arthritis sufferers. Let us see whether there is indeed such a thing as a caring Conservative. The test will be in the action of the Government, rather than the words of their spokesperson.
Liz McInnes (Heywood and Middleton) (Lab)
It is a pleasure to serve under your chairmanship, Mr Betts, and an honour to be mistaken for my very athletic hon. Friend the Member for Neath (Christina Rees). I thank the hon. Member for Strangford (Jim Shannon) for championing this debate. I know from my role as the chair of the all-party parliamentary group on medical research that this debate on arthritis has been a long time coming, given the five-year hiatus in discussing the issue in this House.
First, I pay tribute to the courage and strength of the 10 million people living in the UK who suffer from the disease of arthritis and musculoskeletal conditions. Secondly, we must celebrate the work, commitment and endeavour of thousands of carers who look after, whether in a personal or professional capacity, those who suffer from this illness.
Mr George Howarth (Knowsley) (Lab)
Although I do not, as far as I know, have an arthritic condition, I do have an impacted disc. Frankly, when it flares up, without the support of family members, and in particular my wife, I would be in an impossible situation. It is important that we pay tribute to all those carers and family members who support people with these conditions.
Liz McInnes
I thank my right hon. Friend for that relevant intervention. We must never forget the usually unpaid work that carers do and the vast contribution they make to keeping people out of hospital and saving the NHS money.
As many other hon. Members have done, I also thank Arthritis Research UK for the work it does highlighting the issues around this disease, which affects nearly one in six people in the UK. Arthritis Research UK provides the support that people with arthritis need, such as in-work help and funding for accessibility, social care and medical research. Arthritis Research UK spent £6.6 million on research this year, and during 2014-15, it committed £30.9 million of funding across Europe with its research partners. As many hon. Members have mentioned, it promoted World Arthritis Day, which was last week, and the excellent “Share your Everyday” campaign.
I was fortunate enough to be able to table an early-day motion, which garnered signatures from across the House, recognising the issues and people I have just spoken about. To date, that early-day motion has attracted 44 signatures, and I thank all those hon. Members who supported the motion; hopefully, after this debate there might be more.
Before entering this House, as a biochemist in the NHS, I worked at the forefront of patient care and research and development. The work on arthritis research in the UK is pioneering; it is uncovering new ideas and breakthrough treatments that will end the way in which arthritis limits lives. In the 1990s, it was UK scientists who discovered that a molecule called tumour necrosis factor—one of the cytokines that my hon. Friend the Member for West Ham (Lyn Brown) referred to—was the key molecule causing the destructive autoimmune inflammation of joints that leads to the problems of arthritis. The anti-tumour necrosis factor therapy that they developed has freed millions from rheumatoid arthritis and has also inspired the field of biologics—medicines that use the body’s own molecules to combat diseases. That is something we should be very proud of.
The crucial work of all medical research charities is supported, in the long term, by Government through a real-terms increase in science spending. It is essential that that is continued, and that we back research and development, now and post-Brexit. The Government also need to play their part in supporting medical research funded by charities. The charity research support fund provides an uplift to support charity-funded research in universities and to contribute towards the full economic costs of research—costs such as lighting, heating and maintaining labs. This may seem a minimal ask, but it is the basis and foundation of what scientists, and the laboratories they use, require to continue their vital research.
This joint funding approach ensures that charitable donations are directly invested in research that meets the needs of people with health conditions. In 2013, the Government’s £198 million investment through the charity research support fund leveraged £833 million of investment by charities in English universities. That is a staggering amount; without the charity research support fund, we would have less funding to invest in our leading research. We must commit to securing continual funding for this, to help those with debilitating diseases.
Chris Stephens (Glasgow South West) (SNP)
It is a pleasure, as always, to serve under your chairmanship, Mr Betts, and a pleasure to follow the hon. Member for Heywood and Middleton (Liz McInnes). In my time, I want to focus on discussing employment and the personal feelings of people with arthritis, because it is astonishing that only 59% of working-age people with arthritis are in work.
I employ a senior case worker, Pam Wilson, who was diagnosed with rheumatoid arthritis and osteoarthritis ten years ago, just after she turned 30. She has spoken to me about the taboos of her diagnosis and how people view her condition as being an old people’s problem, which we know is not the case. Arthritis can occur at any age during a person’s lifetime, can be extremely debilitating and, due to its nature, is not visible to others. Pam has described to me situations where she has been described as being lazy and excluded from certain situations in previous employments, purely on the grounds of her health issues. This situation is faced by many arthritis sufferers.
I would like to hear from the Minister today about how we can increase the number of people with arthritis in work. Can we ensure that employers understand these issues? Can we ensure they are working with trade unions, which know about these issues in terms of dealing with employees who require reasonable adjustments in the workplace? Can we look at the Access to Work programme to help those with arthritis? Can we look at the issue sensitively in terms of work capability assessments?
I visited the drop-in organised by Arthritis Research UK last week, talking about the many misconceptions people have about those with arthritis. Pam Wilson is not lazy; she is a hard-working employee in a hard-working team assisting the constituents of Glasgow South West on a daily basis.
As Pam says:
“Yes I have had bad days, some awful days too, but I also have days where I can cope with the pain and medication side effects. It’s all about managing your own expectations of yourself and understanding what your body is telling you. Sometimes though it is other people who don’t understand. They think you’re lazy because you’re not as active as they are, not walking anywhere, not running or cycling places. They are looking at you and think you’re OK. Because people with arthritis do look OK! Time and experience make you put on a face to the world—one that says I’m fine, but inside and behind closed doors we’re struggling in pain, we’re tired. But we still smile and get on with it, grateful that new medications keep us mobile.”
Hopefully this debate will make people understand arthritis. Sufferers are always grateful when someone understands the daily struggle, and it takes two minutes to ask how they are and understand their situation. I look forward to the Minister telling us what more can be done to improve arthritis sufferers’ employment prospects and how we can help to prevent and cure this condition.
Mr Clive Betts (in the Chair)
I thank the hon. Gentleman for being so succinct in his remarks. I call Martyn Day.
Martyn Day (Linlithgow and East Falkirk) (SNP)
It is a pleasure to serve under your chairmanship, Mr Betts. I start by thanking the hon. Members for Strangford (Jim Shannon) and for Congleton (Fiona Bruce) for leading today’s interesting and timely debate. It is surprising that it is the first such debate for five years.
We have heard from many speakers how arthritis affects people, including young people and working-age people, and I thank my hon. Friend the Member for Glasgow South West (Chris Stephens) for his excellent example of a person in work and the real troubles that they face. We have heard how it is a fluctuating condition with symptoms that can change on a daily basis, as well as many personal cases and constituents’ experiences that highlight this problem affecting many people. We all know members of our own families who are affected.
Steven Paterson (Stirling) (SNP)
I do not come to this debate with any great expertise, but my gran suffered greatly with arthritis, which affected the joints in her hands and legs and basically left her housebound. Does he agree that one of the real benefits of today’s debate—I pay great tribute to those who have secured it—is that we can raise awareness of the condition more widely, and that it is incumbent on all of us to go forward from this debate and do that?
Martyn Day
I agree entirely with my hon. Friend.
The scale and significance of this issue has been clearly illustrated by several key statistics that we have heard today. Several speakers have told us how each year, a fifth of the population consult their GP about musculoskeletal problems. There are 30.6 million working days lost each year to arthritis, which account for a fifth of all working days lost. Scottish estimates tell us that 60,000 people have rheumatoid arthritis, and 2,500 people are diagnosed each year. One in five people in Scotland experience chronic pain and one in 20 experience severe, disabling chronic pain, with the back and joints being the most common location for chronic pain. Arthritis Care has estimated that approximately 800,000 to 900,000 people in Scotland alone are living with osteoarthritis.
All those figures highlight the enormity of the issue. However, we must remember that data collection and management is particularly poor for arthritis and musculoskeletal issues and it needs to improve if we are to get a clearer picture of the numbers across Scotland and the rest of the UK. That point was made by my colleague, the hon. Member for Strangford.
On a positive note, Scotland is the only nation in the UK to routinely publish data on chronic pain. That is welcome, as we have one in 20 living with disabling chronic pain that has a serious impact on physical wellbeing and mental health issues. There is no doubt that arthritis and musculoskeletal conditions can be very disabling, and we must take action to raise awareness about the conditions and improve musculoskeletal health —be that by promoting physical activity, tackling obesity or using medicines.
The hon. Member for Heywood and Middleton (Liz McInnes) made a point that we should all echo about carers’ work, which is often overlooked. In my constituency —I am sure this will be the case for most—we have a number of support groups for arthritis sufferers. The central arthritis self-help group in Grangemouth is a good example, with monthly meetings including entertainment and social events, along with talks on health and other subjects. The group also organises outings, hydrotherapy and exercise sessions. As a society, we owe a debt of gratitude to groups such as that for the work they do and to everyone else who is helping sufferers.
There is much that can be done for sufferers. One of the most important things is faster diagnosis of conditions such as inflammatory arthritis, as with earlier treatment, they can be controlled better. In Scotland, there is much focus on tackling obesity, both to prevent and to treat musculoskeletal conditions. We must strive to do more to improve diets and encourage physical activity—in saying that, however, I recognise the point made by the hon. Member for Neath (Christina Rees) about sport-related conditions.
In my area, a good example is Together for Health—often known as T4H—which is a community-based project that works to promote healthy lifestyles in the Armadale and Fauldhouse areas within my constituency and that of my hon. Friend the Member for Livingston (Hannah Bardell). It works in partnership with a range of local organisations, businesses and community groups to promote healthy lifestyles and delivers a variety of activities and events to encourage people to move more and eat better, with the overall aim of reducing childhood obesity.
Key messages of the project include the benefits of a balanced, affordable diet, and encouragement of children and families to be more physically active and spend less time doing sedentary activities. That is not just a Scottish or a UK problem, of course. We have a global ageing population and although the link between arthritis and ageing is well known in our own countries, there are fewer data on how older people in lower and middle-income countries are affected.
What we do know, however, is alarming. The World Health Organisation estimates that 9.6% of men and 18% of women aged over 60 have symptomatic osteoarthritis, and that 25% of those with osteoarthritis cannot perform the major daily activities of life. Taking action internationally is important for the millions of older people who are directly affected, but it also has an impact on the lives of many of those who depend on them. Often older people in developing countries are the main carers of children whose parents have had to leave for work or who have been orphaned due to conflict or illnesses such as HIV.
In conclusion, it is important that we do more locally and internationally to help alleviate these conditions, and we must make preventive measures a greater priority.
Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)
It is an honour to serve under your chairmanship, Mr Betts.
Today we are debating arthritis and what more can be done to help those who suffer from this terrible health condition. It is very welcome that the Backbench Business Committee allowed this debate to happen today, which is in arthritis awareness week and so soon after World Arthritis Day. I also thank the Members from across the House who secured the debate with the Backbench Business Committee, and the hon. Member for Strangford (Jim Shannon) for leading the debate this afternoon. He eloquently and clearly set the tone, and I thank him for that.
As we have heard, this condition can often go unnoticed or ignored by individuals and wider society, and I hope that the awareness work seen this week has helped somewhat in changing that, along with the role that everyone here has played in supporting that culture change. Nearly 10 million people in the UK live with arthritis. The symptoms can vary; there are over 200 known types of arthritis and rheumatic disease. The symptoms include inflammation of the joints, pain, fatigue, stiffness and difficulty moving. It is quite a common misconception that arthritis is a health condition affecting only the elderly, but it can often affect all ages. That is why it is important that we raise awareness, and that more be done to educate the public on the symptoms, and on the support and help that is out there.
However, we must also be aware that, given the ageing population, more people will suffer with arthritis. The number of sufferers is expected to rise by 50% by 2030. It has to be said that the Government’s short-sighted cuts to public health grants will only cause havoc if the proper finances are not put in place to address our nation’s health.
Arthritis may not be a killer, but it does attack the way of life of many people. As has been put so eloquently today, this condition can make life a very painful struggle, with one in 10 people saying that they live with unbearable pain, day in and day out. The words of those who suffer with this condition can make the strongest cases for reminding us just how tough it can be to live with arthritis.
In the words of Sharon—I am not talking about myself in the third person here, Mr Betts—who suffers with psoriatic arthritis,
“It’s the forgotten condition that no-one thinks is important. It affects everything. It’s exhausting, depressing and makes you feel angry and frustrated.
It robs you of the life you thought you were going to have, the one you planned with your family. It robs you of a sense of purpose. You can’t do what you want, when you want, it’s unpredictable.
Life has to be adapted and constantly changed. The drugs make you feel sick and depressed and have side effects as long as your arm. It becomes important not to look back at what is lost and make an effort every day to look forward and think positively. But it’s invisible, other people don’t see any of that, you just look a bit stiff.”
Those are extremely powerful words and should be a reminder to us all of how important it is to do more to help those suffering with arthritis.
Hearing the stories and experiences of those who live with the condition is important to help raise awareness. That is why the aim of the awareness campaign “The Future is in your Hands” for World Arthritis Day last week was to highlight the stories of those who suffer. It reinforced the comments made by the chief medical officer back in 2012, who said that osteoarthritis, the most common musculoskeletal condition, is a
“generally unrecognised public health priority”.
The Government must listen to contributions of medical experts such as the chief medical officer, and to the expert opinion of those who experience arthritis. They must then act to do more to help those suffering with the condition.
The Government could help to prevent the development of arthritis with preventive measures that relate to obesity and physical activity. Studies have shown that obesity is the single biggest avoidable cause of osteoarthritis in weight-bearing joints. With two out of three obese people developing osteoarthritis, it is important that we seriously get to terms with addressing obesity; that will create an environment in which those suffering with arthritis can flourish, rather than struggle.
One key way to alleviate symptoms and support people who suffer with arthritis is by promoting physical activity, as it has been shown that regular physical activity can be beneficial in helping to reduce the impact of the condition on people’s lives. My hon. Friend the Member for Neath (Christina Rees), who is no longer in her place, pointed out that it was a lifetime of sporting activities—she is a very well-known squash player—that probably caused, or exacerbated, her arthritis. However, the National Institute for Health and Care Excellence has published clinical guidelines that recommend exercise as a core treatment for people with arthritis, irrespective of the severity of their condition.
We need to know which services are out there, so that we can help people acquire the recommended treatment. That is why it would be beneficial for the National Audit Office to conduct a review into physical activity services for people with arthritis. That would help to ensure that we, as policy makers, have the necessary information to drive the policy agenda, and would help to map areas with a shortfall in support and services for those with arthritis. I hope that the Minister will shed some light on plans to undertake that work. Such an investigation would also be important in the light of the cuts to public health grants under this Government. Those cuts are a false economy, and compound the problems accessing services for people who are seeking to manage and improve their lives.
I quoted the following figures to the Public Health Minister at about this time last week from this very spot, but they are worth repeating to the Minister here today. In the autumn statement, the former Chancellor announced further cuts to public health grants, which amounted to an average real-term cut of 3.9% each year to 2021. That translates to a further cash reduction of 9.6%. That is in addition to the £200 million of cuts to public health grants announced in the 2015 Budget. The Minister must bear those figures in mind when responding to the debate and whenever the Department takes action on public health issues. It really is a false economy to cut funding to already overstretched and burdened public health services, as that will obviously exacerbate the problems with those services in the long term.
The need for further awareness of arthritis and its symptoms was clearly shown in a UK-wide survey of more than 2,000 people conducted by Arthritis Care last year, which found that more than a quarter of arthritis sufferers had waited two years to seek help after their symptoms began. When asked why, some 52% said that it was because it did not occur to them that they could have arthritis, and 28% felt that nothing could be done to address their arthritis. I hope that those who have listened to this debate have heard, loud and clear, that help is out there, and that delaying seeking that help will not aid them or their long-term health and wellbeing. That point was made eloquently by my hon. Friend the Member for West Ham (Lyn Brown), who, I think hon. Members will agree, looks 10 years younger than she did a little over a year ago.
Raising awareness is vital. Last week, world-famous performer Robbie Williams gave a candid interview explaining that he suffers with arthritis and describing the impact that has had on his performance; as a Robbie fan, that concerns me. The more we talk about the condition, and the more that high-profile people, such as the MPs here today, talk about their experiences, the better.
There have been so many eloquent and personal accounts in this debate. I particularly mention the brave and moving account of my hon. Friend the Member for West Ham. She will be playing tennis soon with our own parliamentary tennis champion, Mr Speaker, and I, for one, definitely want a front-row seat for that one. My hon. Friend is a true inspiration to the 10 million arthritis sufferers across the country.
I hope that the Minister has listened not only to the debate and contributions from Members present, but to the voices of those outside this place who have called on the Government to do more for those living with arthritis and the pain that comes with it. There are many ways for the Government to do something, and ideas have come from across the House to steer the Minister in a direction that will help the 10 million people who suffer with the various levels of pain associated with arthritis. Let us hope that this time next year, when we recognise National Arthritis Week again, we will have helped more people to lead a healthier, happier and more pain-free life.
The Parliamentary Under-Secretary of State for Health (David Mowat)
It is a pleasure to serve under your chairmanship, Mr Betts. I congratulate my hon. Friend the Member for Congleton (Fiona Bruce) and the hon. Member for Foyle on leading the charge—[Hon. Members: “Strangford!”] I beg your pardon; I meant the hon. Member for Strangford (Jim Shannon).
Jim Shannon
I have more hair than the hon. Member for Foyle (Mark Durkan), but not much more.
David Mowat
Don’t take it as a compliment. It has been a long day.
It seems extraordinary, thinking about some of the subjects we debate, that it has been five years since we have debated this subject in the House of Commons. The debate has been such a pleasure, and I am sure that hon. Members here will see to it that it is not five years before we debate it again. An objective of having a debate in Westminster Hall is to raise awareness. People watch these things, so it is right that we do that and it is important that we do it again next year.
I have been a Minister for about two months, during which time I have met many people, so it has probably been remiss of me not to have met with Arthritis Research UK yet. I am keen to do that. Its representatives are pushing at an open door if they would like to come and see me. As the hon. Member for Coatbridge, Chryston and Bellshill (Philip Boswell) said, it is about action, not words. We will organise that meeting if Arthritis Research UK would like it to happen.
Several hon. Members have mentioned the statistics, but I will repeat them because they are so important. Some 10 million people in the UK—one in six of the population—have an MSK condition. The most common, with 3 million sufferers, is osteoporosis. One in six is an extraordinary figure, and there are 200 variations of MSK conditions. One in 10 people in the UK suffers chronic pain as a consequence of arthritis.
The numbers are mind-boggling. Some 20% of GP consultations are due to MSK conditions, and this at a time when our GP services are stretched in Scotland and in England. MSK conditions account for 30% of GP consultations for the over-55s, and some 7.5 million working days are lost each year. This long-term condition alone costs the NHS between £4 billion and £6 billion, so it is right that we are having this debate.
There have been a number of interesting and useful speeches. Westminster Hall is sometimes a better place to debate such topics. The hon. Member for Strangford talked about lifestyle factors and preventive factors, and he and another Member made an interesting point about DWP and PIP. We need to be more joined up in how we deal with some of these long-term conditions, particularly as they become more prevalent. He also talked extensively and knowledgeably about research—he has clearly been well briefed—and about what we are doing.
The hon. Member for West Ham (Lyn Brown) made an excellent speech about her personal experience, and she emphasised the overlap with mental health. She talked about first suffering from this during her election campaign last year. In fact, it prevented her from canvassing. I note that she got 36,000 votes and her vote went up by 6%. I do not know whether those factors are related. Well done on 36,000. We pass on our congratulations and awe at her performance.
David Mowat
Maybe it was. The hon. Lady also talked about the delays to the start of her treatment and the one-year delay before she got the right drugs, which have been so transformative for her. That is an impressive story.
The hon. Lady also talked about the concerns about the consequences of Brexit. The Government have made it clear that, whatever version of Brexit we end up with, science research will continue to grow in real terms and ongoing scientific programmes will continue. I was a remainer, and we often talk about the money that Europe gives to programmes. She said that £2.5 million was given to a particular programme, which should be seen in the context of the £20 billion that flows in the other direction. The real point is that we understand the need for science and will continue to ensure that that funding happens.
The hon. Member for Neath (Christina Rees) made a good intervention about the consequences of sport and the unpredictable flare-ups that she has. She made the interesting point that arthritis can be invisible for much of the time before flaring up. The right hon. Member for Knowsley (Mr Howarth) is right to remind us of the role of carers. I remind Members that we are putting together a carers strategy, which will focus on unpaid carers in particular. That will come out at the end of this year. We are talking to a number of charities about that because it is important, given the stress and strain on our various systems.
Mr George Howarth
I am grateful to the Minister for giving way and for the thoughtful way in which he is responding to the debate. For the sake of completeness, I should say that my impacted disc results from playing rather over-enthusiastic football in the fourth division of the Liverpool Shipping league, which the Minister will know is not a lofty place to play. Unfortunately many of my sliding tackles were badly mistimed, to my detriment.
David Mowat
I thank the right hon. Gentleman for his intervention. The fourth division of the Liverpool Shipping league is probably a higher division than I played in during my very short football career.
Due to the time, I will not refer to every speech. The Scottish National party spokesman, the hon. Member for Linlithgow and East Falkirk (Martyn Day), talked about what Scotland is doing on managing obesity and chronic pain. I would like to see England learning more lessons from Scotland’s health system; and, I humbly suggest, vice versa—I also include Wales in that. Health is devolved and we are beginning to do things in different ways. Sometimes things will work well, and sometimes things will work less well. One of the highlights of these debates is to hear what happens in other nations, and those remarks are interesting.
The shadow Minister also gave a good speech. She talked about budgets and health spending, particularly public health spending—she has now been able to tell two Health Ministers about that issue—and it is true that the public health budget was cut. The UK spends above the OECD average on health and adult social care, which has not always been the case. We are not the highest spender—we spend 9.9%, but France and Germany probably spend about one percentage point more—but we are above the OECD average. It matters very much how effectively we spend that money. There are always decisions to be made, and those decisions are sometimes difficult.
What are we doing? I will not be able to answer all the points in great detail other than to say that MSK is a priority because it is so important. MSK is one of the national programmes within NHS England, and in 2013 we appointed a clinical director, a gentleman called Peter Kay, who is running a £5 billion programme covering a number of areas and seven strands of work, which I will briefly run through.
First, we need to ensure good awareness of the signs and symptoms of MSK. That is about public health and things such World Arthritis Day and the UK “Share your Everyday” campaign. It is also about the important Public Health England activities that we have heard about. We ran a successful public health campaign on arthritis last year, and we need to maintain that pressure.
Secondly, we need high-quality clinical guidance to diagnose and manage the disease. Thirdly, we need to provide holistic care, support, and planning in partnership with patients. Fourthly, and this is important, we must spread best practice across the NHS—I would go further and talk about spreading best practice across the health systems of all the Administrations within the UK. Fifthly, we have heard a lot today about the benefits of physical activity for MSK patients, notwithstanding some of the issues experienced by the hon. Member for Neath and the right hon. Member for Knowsley. Fitness and exercise are of course a preventive measure for nearly everything, particularly for MSK diseases.
Penultimately, we need to do more to enable people to remain in work and to return to work. Finally, we need to invest in research. Those are the seven streams of activity, and I will talk a little about the one that has been spoken about most this afternoon, which is what we are doing to keep people in work. As I said, the points about DWP and PIP were well made, and I will see that that is reflected to DWP Ministers.
Philip Boswell
I am delighted to hear about the open door to Arthritis Research UK, which has been excellent in championing the rights of arthritis sufferers, preventing the onset of arthritis, developing a cure for arthritis and transforming lives. Arthritis Research UK’s work is considerable, and it is worthy of our support. I thank the Minister for his words and his initial actions.
David Mowat
I thank the hon. Gentleman for those words. It occurs to me that I have to give the hon. Member for Strangford time to say a few words at the end. I will write to Members about the various specifics that have been raised. I will now sit down and allow him half a minute or so. I apologise for there being so little time.
Jim Shannon
I especially thank the right hon. and hon. Members who have made such fantastic contributions —every contribution and intervention has been great. The attendance has also been great. It is genuinely refreshing to have a Minister who understands the issue and is able to respond. We will take him up on his offer to have a meeting with Arthritis Research UK—I thank him for that. I look forward to working on behalf of constituents from across the whole of the United Kingdom of Great Britain and Northern Ireland.
Written Statement
(7 years, 6 months ago)
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The Global Fund to Fight AIDS, Tuberculosis and Malaria
(7 years, 6 months ago)
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The Secretary of State for International Development (Priti Patel)
I would like to update the House on my attendance at the fifth replenishment conference of the global fund.
The fifth replenishment conference took place on 15 and 16 September in Montreal, Canada. The conference was hosted by Prime Minister Justin Trudeau and brought together participants from Governments, the private sector, civil society and non-governmental organisations to raise funds for the fight against the three diseases— HIV/AIDS, tuberculosis and malaria—up to 2020.
At the conference, I announced that the UK would make £1.1 billion available to tackle these three diseases. Our investment will help the global fund to save eight million lives, avert 300 million infections, and help build resilient and sustainable systems for health.
To support the fight against malaria, I structured our investment to increase contributions from the private sector by agreeing to double private sector contributions to the global fund for malaria up to a maximum of £200 million.
I also made it clear that the UK, as an engaged, outward-looking nation, has a duty both to the people we are trying to help and to the UK taxpayer to ensure the aid system is as effective as possible. I therefore announced that, starting with the global fund, I will be rolling out performance agreements with all major organisations in order to challenge, change and reform the global development system so that it properly serves the poorest people in the world. We will therefore use our investment to secure a step change in the global fund’s performance to ensure every penny of UK taxpayers’ money is achieving the maximum possible impact. As a result, I have agreed a new £90 million performance agreement with the global fund, which is based on delivery in 10 key areas of improvement, including increasing the impact of our investment by ensuring the most vulnerable and hardest to reach parts of society receive the support they need, by rooting out corruption and inefficiency and by focusing resources on countries with the least ability to pay.
By helping to free developing countries from the burden of the three diseases, we are not only saving lives; we are boosting economies and helping countries leave aid dependency behind to become trading partners of the future. But ending the three diseases as epidemics by 2030 is an enormous challenge. Britain has a proud record as a global leader in development and following the referendum result, we now have the opportunity to further build on our place in the world. UK support to the global fund over the next three years will:
Fund 40 million bed nets to tackle malaria;
Provide enough lifesaving anti-retroviral therapy for 1.3 million people with HIV;
Support the treatment of 800,000 people with tuberculosis.
Overall, the replenishment conference was a success, raising pledges worth US $12.9 billion, which will go towards tackling the epidemics of AIDS, tuberculosis and malaria for the period 2017-19. The conference raised nearly $1 billion more than the previous replenishment conference in 2013.
The UK will hold the global fund and key donors to their commitments to ensure the UK’s investment achieves the maximum possible impact, while rolling out this new approach to performance agreements for future aid spending.
I am aware of the significant degree of interest in this issue from Members across the House, whose advice and support on this issue has been invaluable for the Government. For the convenience of Members, I am depositing a copy of the performance agreement in the Libraries of both Houses.
Attachments can be viewed online at: http://www.parliament. uk/business/publications/written-questions-answers-statements/written-statement/Commons/2016-10-20/HCWS205/
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