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Martin Vickers (Cleethorpes) (Con)
The Secretary of State for Culture, Media and Sport (Karen Bradley)
May I start by welcoming all Opposition Front-Bench Members? It is good to see a full complement of shadow Ministers and I look forward to working with everyone in the foreseeable future. [Interruption.] My side is slightly depleted. My right hon. Friend the Minister for Digital and Culture currently has Her Majesty visiting his constituency, and sends his apologies.
The Government are taking forward a range of measures to tackle nuisance calls. This includes the recent announcement to consult on making company directors liable for breaches of the direct marketing rules.
Martin Vickers
I thank my right hon. Friend for the update and the moves the Government have made so far. In the last Parliament I was vice-chairman of the all-party group on nuisance calls and we produced a report containing many recommendations. What other work is being done to implement them?
Karen Bradley
I thank my hon. Friend for the work of the all-party group. A number of its recommendations have been taken forward, including the new requirement for all direct marketing callers to provide caller-line identification, and I have just mentioned our intention to hold company directors to account. More needs to be done and I stand ready to make sure we do what we need to do to stamp out the dreadful nuisance that is nuisance calls.
Dr Rupa Huq (Ealing Central and Acton) (Lab)
Is the Secretary of State aware of the Fair Telecoms Campaign? It argues that, given the untargeted nature of the telephone, it is completely inappropriate for payment protection insurance and accident claims calls. It suggests that the Secretary of State should press colleagues at the Ministry of Justice to prohibit this entirely. Will she meet the campaign and my constituent David Hickson to sort this out?
Karen Bradley
I will look carefully at what the hon. Lady said, but I assure her that this is a cross-Government piece of work; we need to work together to tackle this and I fully recognise that nuisance calls can have a devastating effect on people.
Mr David Nuttall (Bury North) (Con)
Nuisance telephone calls are a modern menace, especially for the elderly. I am pleased to hear that the Government are taking more action. What will my right hon. Friend be doing to monitor whether the new action is actually being successful?
Karen Bradley
I will look carefully at whether the action we have taken so far has the desired effect, and if it does not I do not rule out taking further steps.
Patricia Gibson (North Ayrshire and Arran) (SNP)
I am delighted that the UK Government have announced they will accept the provisions of my ten-minute rule Bill in their entirety and hold named directors to account for nuisance calls with effect from spring 2017. Does the right hon. Lady agree that we must not rest on our laurels and that we must continue to strive against nuisance calls to protect the vulnerable, all consumers and legitimate and ethical businesses, and will she keep the House updated on action going forward?
Karen Bradley
I pay tribute to the hon. Lady for her Bill, which helped raise awareness of the issue, and I am pleased the Government are following her recommendations. We need to make sure this works; we need to work together to make sure that it does, and I will be very happy to continue updating the House on this matter.
Fiona Bruce (Congleton) (Con)
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Tracey Crouch)
Mr Speaker, you will recall that before I went on maternity leave I announced that the triannual review into stakes and prizes would happen this year, and I am pleased to say this promise has been kept. The review was published last week and will include a close look at fixed odds betting terminals.
Fiona Bruce
I thank the Minister for that reply. Will she look carefully at the merits of reducing the maximum bet per spin for FOBTs from £100 to £2, and at the important contribution that could make to significantly reducing problem gambling and the problems families suffer as a result?
Tracey Crouch
I am sure the House would not want me to prejudge the outcome of the review, but clearly the call for evidence will look at the stakes and prizes of all gaming machines, and I have no doubt that the Department will receive many representations on those of FOBTs.
Graham Jones (Hyndburn) (Lab)
The whole House is concerned about FOBTs, which are the crack cocaine of gambling. It is possible to spend £100 every 20 seconds, or £300 every minute, on them. They are affecting our constituents, and people have a real concern about them. I welcome the fact that we are going to have a review, but when will the Government also deal with the Gambling Commission, which seems to have sat behind this and allowed it to happen, alongside the inaction of the previous Government?
Tracey Crouch
The review is looking at all stakes and prizes relating to gaming machines. The issue with FOBTs has clearly grown since the liberalisation of gambling, which was of course brought in by the Labour party when it was in government. The issue blights individuals and communities and I am very passionate about it. I look forward to the review concluding.
Philip Davies (Shipley) (Con)
Perhaps it would be topical to point out that the term “crack cocaine of gambling” was first coined by Donald Trump in the 1980s. He was talking about video keno games affecting his casinos. Perhaps the hon. Member for Hyndburn (Graham Jones) will start chanting “Lock her up” if we keep quoting Donald Trump. Can the Minister tell us what the point is of reducing the stakes on fixed-odds betting terminals in betting shops when people can go straight on to the internet and play exactly the same games with unlimited stakes and unlimited prizes?
Tracey Crouch
I welcome my hon. Friend’s comments on these issues. He will of course be entitled to reply to the call for evidence on gaming machines. Online gaming is obviously an area of increasing concern that we keep under regular review.
Susan Elan Jones (Clwyd South) (Lab)
Tracey Crouch
The official statistic is that 1% of the adult population have a problem with gambling, but that still equates to 600,000 people, and in my view that is 600,000 too many.
Jessica Morden (Newport East) (Lab)
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Tracey Crouch)
Together with VisitBritain, we actively monitor inbound tourism trends to the UK. The latest figures predict a 27% growth in tourism visits between 2015 and 2020. International tourism has had a very strong summer, with August setting a new inbound record for that month with 3.8 million visits—up 2% on the same month last year—and July having the highest ever figure for that month.
Jessica Morden
Wales has seen the biggest rise in overseas visitors to the UK in 2016, and it is the only part of the UK to feature in the “Lonely Planet” guide’s list of the best places to visit in 2017. Hopefully, there will be many more. Does the Minister appreciate that there is great uncertainty in the sector over what Brexit will mean in practice? This means that we need Ministers to listen hard, have a plan and work closely with the Welsh Government to ensure that Welsh tourism goes from strength to strength.
Tracey Crouch
The hon. Lady is right: the number of international visitors to Wales is up 15% and the figure for domestic visitors is 4%. That is a tribute to the hard work of VisitWales and VisitBritain. With the “Lonely Planet” guide placing north Wales in its top places to visit and with the Champions League final being played in Cardiff in June, things can only get better next year. I can reassure the hon. Lady that I meet Ministers from all the devolved Administrations regularly, and that we want to work closely to ensure that more people come to Britain, and that means all parts of Britain, and Wales.
Mr Andrew Turner (Isle of Wight) (Con)
For the first time for 12 years, Visit Isle of Wight will be at the World Travel Market, which takes place next week. Will the Minister pay a visit to the stand to show her support for tourism beyond London and, in particular, on my island?
Tracey Crouch
My hon. Friend will be pleased to hear that the Secretary of State will be visiting the World Travel Market next week, and I am sure that if she has time she will pop by and visit the Isle of Wight’s stand.
Mr Speaker
What a fortunate and apparently prosperous fellow the hon. Member for Isle of Wight (Mr Turner) is! We are always pleased to get a bit of additional information.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
The “Lonely Planet” guide must be in a galaxy far, far away if it does not mention Yorkshire. We in Yorkshire demand a greater share of all the people who come here. Too many tourists come to London but do not go beyond it. When are we going to get the balance right?
Tracey Crouch
Visits to Yorkshire are in good health. One of the Government’s ambitions under the tourism action plan is to ensure that people get out of London and visit the rest of the country, and we are supporting that with the £40 million Discover England fund. I encourage the Yorkshire tourism industry to see whether it can apply for additional funds.
Steve Double (St Austell and Newquay) (Con)
Like most of the sector, the Cornish tourist industry enjoyed a bumper summer, but there is still a degree of uncertainty about the impact on the industry of leaving the EU. What conversations has the Minister had with the Secretary of State for Exiting the European Union to ensure that the voice of the tourist industry is heard in the negotiations?
Tracey Crouch
Cornwall has had many of my tourism pounds over the past few years. I reassure my hon. Friend and the whole House that we regularly meet the tourism industry as a whole. We have discussed Brexit issues at significant length and continue to do so. We have round tables and the Tourism Industry Council, and there are many other forums at which such issues are discussed. We are working hard to ensure that the industry’s concerns are represented.
Mr Mark Williams (Ceredigion) (LD)
The figures alluded to by the Minister, not least those for Wales, are welcome, but what assessment has she made of the further impact on the industry of the reduction in VAT on tourism and visitor attractions?
Tracey Crouch
The Department and I are sympathetic towards cutting VAT on attractions and accommodation. However, the industry needs to make that argument to the Treasury, not to us.
Mr Nigel Evans (Ribble Valley) (Con)
Sadly, I do not own an island, but I do live in the glorious Ribble Valley. The falling pound should mean that far more foreign tourists look favourably at the United Kingdom. The Crown jewels may be in the Tower of London, but the real crown jewels are in the UK’s regions, whether Yorkshire, Wales or the Isle of Wight. What more can be done to attract tourism away from London and into the regions?
Tracey Crouch
As I said earlier, we are working hard to ensure that we get visitors out of London and into the regions. I encourage my hon. Friend and his local destination organisation to apply for Discover England funding to ensure that we can attract visitors to all parts of the country, including Lancashire and his constituency, where one can purchase the finest sticky toffee pudding I have ever had.
Seema Kennedy (South Ribble) (Con)
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Mr Rob Wilson)
Local Charities Day is an opportunity for all to celebrate small local charities across the country and for the Government to recognise the huge contribution that they make to local communities. Small charities make up 97% of the voluntary and community sector and have a massive impact, yet media attention usually focuses on the big players. Small local charities deserve much more recognition than they currently receive, and I encourage all hon. and right hon. Members to get involved on 16 December.
Seema Kennedy
Will the Minister tell the House how the Small Charitable Donations and Childcare Payments Bill will help charities such as the Leyland Project, which works with young people in my constituency?
Mr Wilson
I pay tribute to the Leyland Project, which does such great work in my hon. Friend’s constituency, and possibly elsewhere in Lancashire. The Bill represents yet another commitment that we are making to small local charities that will help to ensure that the gift aid small donations scheme is more accessible to small and new charities. It is expected to be worth an additional £15 million a year for the sector. That means £41 million a year from the small donation scheme, which, when added to gift aid of £1.3 billion a year, should help an awful lot of small charities.
Joan Ryan (Enfield North) (Lab)
Is the Minister aware that the latest findings from the national trustee survey reveal that almost a quarter of charity trustees have considered quitting due to mounting pressure and that it is becoming increasingly difficult to recruit trustees? Given how important trustees are to the sector, what plans do the Government have for further support so that trustees can fulfil their roles?
Mr Wilson
The right hon. Lady is absolutely right to mention the role of trustees, who do a fantastic job up and down the country supporting charities in their amazing work. The Government’s job is to help charities big and small to become more independent, resilient and sustainable. That is exactly what we intend to do.
Imran Hussain (Bradford East) (Lab)
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Tracey Crouch)
It is too early to draw conclusions about the impact of changes in the currency exchange rate on tourism. Many trips to the UK are booked far in advance. Thanks to our world-class attractions, heritage and great marketing campaign, July and August set new records for inbound visits and spending.
Imran Hussain
Since the EU referendum result, the pound has devalued dramatically, and last month the Conservatives were celebrating the rising number of tourists coming to the UK. Is it now the Government’s policy to encourage a weak pound in order to increase the number of visitors to UK tourist sites?
Tracey Crouch
I appreciate that this is a Labour party attack on the Government following Brexit, but the British tourism industry is going from strength to strength. The softening of the pound is a welcome boost for that, but it is a concerted action by Government and industry that has been driving record-breaking numbers of visitors to our shores. The hon. Gentleman should welcome that, because the number of visitors to west Yorkshire is up.
Nigel Huddleston (Mid Worcestershire) (Con)
The latest VisitBritain report showed that every £1 spent on international marketing brought in £23 in incremental tourism spend. Is that a good way to spend money, given the weakness of the pound?
Tracey Crouch
We want to ensure that we have the best marketing campaigns to encourage international visitors to these shores, and I hope people will continue to get behind the GREAT campaign, because it is working incredibly well.
Judith Cummins (Bradford South) (Lab)
The Secretary of State for Culture, Media and Sport (Karen Bradley)
The UK’s creative industries are an economic success story, worth more than £87 billion to the UK economy and growing twice as fast as the economy as a whole. They account for almost 2 million jobs and export more than £19 billion-worth of services to the rest of the world.
Judith Cummins
This Government’s northern powerhouse is not just about improving transport. In the words of the former Chancellor, it is also, importantly, about “creative, cultural, beautiful places”. This Government have committed to providing £78 million towards Manchester’s new theatre and exhibition space. That is welcome, but what are the Government doing to drive the creative industries in Yorkshire and the city of Bradford? Will the Minister agree to meet me, Bradford Council and business leaders to discuss what more could be done to support a new theatre and exhibition space in Yorkshire and the city of Bradford?
Karen Bradley
The hon. Lady will know that this Government are committed to promoting creative industries across the whole of the north of England, which is why Hull is the city of culture next year, we have the “Great Exhibition of the North” in Newcastle and Gateshead in 2018 and we have a legacy fund of £15 million, on top of the money for that exhibition, to promote the creative industries across the whole of the north of England. Bradford has many great creative industries, particularly in tech and gaming, and I want to make sure we do all we can to foster the economic climate in which they can thrive.
Mr Tom Watson (West Bromwich East) (Lab)
In the post-Brexit economy, the creative industries will be more important than ever. Those 2 million jobs the Secretary of State mentioned, in music, TV production, film, video games, art, design, publishing, dance, drama and literature, are one of our strongest hands as we find a new trading place in the world. When I checked the Government website this morning, I noticed that the Secretary of State attends a Brexit Cabinet Sub-Committee but not the main Brexit Committee, which means the creative industries have no voice at the top table. May I help the Secretary of State in some way? Would she like me to write to the Prime Minister about this, because the creative industries need a voice at that table?
Karen Bradley
It is very kind of the hon. Gentleman to offer to help, but I think he would agree that there is no higher table than the Cabinet, and I can assure him that the creative industries are fully represented at that top table. It is also worth pointing out that I have held round-table meetings with the creative industries, and the Creative Industries Council last week had a specific session looking at the work it has done to examine not only the threats there are from Brexit, but its many, many opportunities. This is a global industry in which the UK is a world leader, and he should take comfort from the fact that the Prime Minister mentioned the creative industries specifically in her conference speech as one of those strengths that we want to build on, here in the UK and in the rest of the world.
Hannah Bardell (Livingston) (SNP)
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Tracey Crouch)
There is absolutely no place for homophobia in sport or anywhere in society. In the sports strategy, we asked Sport England to
“place equal emphasis on the support for LGB&T people in sport as it does for other characteristics”
that are protected. Some research has been commissioned, and Sport England is currently considering its findings.
Hannah Bardell
When the chairman of the English Football Association said that it was not the time for gay footballers to come out in the male Premier League he shamed himself and he shamed football. Does the Minister agree that those comments are wholly unacceptable, and that the FA and Premier League clubs in England should follow the example of Scotland, which, with the Equality Network, has developed an LGBT sports charter? Will she work with me and others to take that forward?
Tracey Crouch
The reported comments are indeed unhelpful and we should encourage and support people in all sports who wish to come out. We need to ensure that we use existing legislation to stop homophobic chanting and language during sporting events. I know that the Football Association is working hard trying to support people in the game and that progress has been made in tackling homophobia, but we need to consider other means of doing that as well. Supporting players is absolutely essential.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
I thank the Minister for her comments. I found the comment in the question from my hon. Friend the Member for Livingston (Hannah Bardell) that the FA was unable to offer protection in the event of a player coming out to be the most damning. Does the Minister agree that we require real leadership on this issue and that the Government, the Football Association, the Premier League and the Football League must now come together to create a lesbian, gay, bisexual, transgender and intersex-focused Kick it Out campaign, as the quicker that we can rid society of these appalling views the better off we will all be?
Tracey Crouch
Advances have been made in fighting discrimination in football over recent years, and the FA is putting its support behind the European Football v. Homophobia campaign, and it is trying to ensure that everybody understands homophobia and transphobia. Stonewall’s recently relaunched Rainbow Laces campaign helps. With regard to the Kick it Out campaign, it is a fantastic app that enables people to report any kind of abuse as it happens, and we should do more to encourage people to do that when it is related to homophobia.
Dr Rosena Allin-Khan (Tooting) (Lab)
Since Justin Fashanu took his own life, no professional footballer has come out in England. The FA chair has recently admitted that the FA is still not doing enough to tackle homophobic abuse. Homophobia is rife, and has been for far too long. How are the Minister and the Government working with the FA to tackle homophobia at every level, from Sunday league to Premier League?
Tracey Crouch
First, may I welcome the hon. Lady to the Despatch Box? I look forward to sparring with her over the course—[Interruption.] It’s okay. I can hold my own, don’t you worry. There has been progress in the Football Association, but there is always more to be done. It is important that the FA remembers that it is there as the national governing body to support footballers. Our own strategy sets out a cross-Government vision for sport and will encourage more tolerance at every single level of all sports, including grassroots and Premier League football.
Mr Ranil Jayawardena (North East Hampshire) (Con)
The Secretary of State for Culture, Media and Sport (Karen Bradley)
Since the last oral questions, we have launched a call for evidence on gaming machines and a consultation on press regulation. We have also seen our Paralympians win 147 medals, 64 of which are gold. I am sure that the whole House will join me in celebrating their achievements.
Mr Jayawardena
Mr Speaker, as you will remember from my maiden speech, King John rode from his castle at Odiham to sign the Magna Carta. Eight hundred years later, the national lottery provided a three-day festival for our community to learn more about our heritage. Will the Secretary of State commend the Odiham Society for its work and celebrate the fact that the national lottery is awarding its 500,000th grant?
Karen Bradley
Mr Speaker, you only mentioned it to me yesterday.
Of course I will join my hon. Friend. The national lottery does fantastic work for good causes in all our constituencies, and immediately after this session—quite literally immediately—I will be hotfooting it on a train to Ipswich to visit a charity and sports organisations that have benefited from lottery grants. It behoves all of us in this House to celebrate those good causes in our constituencies that the national lottery supports, and make sure that we do all we can to support the lottery to keep giving to those good causes.
Louise Haigh (Sheffield, Heeley) (Lab)
Yesterday, Facebook made the welcome announcement that it would not be allowing Admiral to use its data to determine insurance premiums. While the Government have been dragging their feet and refusing to update data protection legislation, private companies have been harvesting our personal data, against our knowledge, without our consent and to our detriment. When will the Government act?
Karen Bradley
I know that the hon. Lady, who is on the Digital Economy Bill Committee, is doing considerable work in this area. I look forward to working with her to ensure that we achieve all that we want to. May I make the point that the Investigatory Powers Bill, which is an incredibly important part of our law enforcement around data protection, is currently being hijacked and prevented from making progress and receiving Royal Assent because of press regulation? It is important that we get that matter of national security on the statute book to protect us all.
Mike Wood (Dudley South) (Con)
Karen Bradley
My hon. Friend is right. We stand right behind the FA and the Scottish FA in their decision to wear poppies. I will be at the match next week and I will make sure that I pass on those comments. It is absolutely right that home nations should, if they choose, wear poppies to commemorate those who sacrificed their lives, and I hope that FIFA will see sense and withdraw any threat of sanctions for those who do so.
Kerry McCarthy (Bristol East) (Lab)
Karen Bradley
I know that the hon. Lady is campaigning hard on this issue and I will look at all that she has said.
Chris Davies (Brecon and Radnorshire) (Con)
Holly Lynch (Halifax) (Lab)
Karen Bradley
May I take the points that the hon. Lady has made and consider them? Perhaps my right hon. Friend the Minister of State could meet her to discuss the matter.
Rebecca Pow (Taunton Deane) (Con)
I am not sure whether you are a football fan, Mr Speaker—[Interruption.] Oh yes, you are. Perhaps you could change your allegiance, because Taunton Town football club has reached the first round proper of the FA cup for the first time in 35 years. Will the Minister join me in praising all those who have worked so hard for years and years as volunteers at the club to help it to get this far, as well as the paid people? Will the Minister also join me in wishing the club the very best of luck for the big match on Sunday?
Tracey Crouch
I am well aware, Mr Speaker, that you are a football fan, albeit for the wrong north London team. I am delighted to join my hon. Friend in praising Taunton Town football club for its progress in the FA cup and I wish it all the best.
Mr Speaker
I hope I enjoy Sunday lunchtime more than the hon. Lady does. I say to the hon. Member for Taunton Deane (Rebecca Pow) that I am, of course, a fanatical Arsenal fan.
Gill Furniss (Sheffield, Brightside and Hillsborough) (Lab)
Karen Bradley
I am determined to make sure that there is access to the arts for everyone across the country. We have to make this a country that works for everyone, and that means access to the arts. From a sporting perspective, I am sure the hon. Lady will welcome the first Parklife activities that took place in Sheffield last week, which the Under-Secretary of State for Culture, Media and Sport, my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch). attended.
Andrew Selous (South West Bedfordshire) (Con)
Are Ministers aware that Dr Peter Aitken, the chair of the faculty of liaison psychiatry at the Royal College of Psychiatrists, told the Health Committee on Tuesday that gambling addiction is becoming a major cause of suicide? Will Ministers be emboldened to take the issue further?
Tracey Crouch
I have seen the transcript of Dr Peter Aitken’s comments, in which he said that we should not overlook gambling as one of the significant addictions of our day. As somebody who spent a lot of time working on addiction issues in this House before I was made a Minister, I could not agree more. I discussed the matter only last week with GambleAware, formerly the Responsible Gambling Trust.
Mr Ben Bradshaw (Exeter) (Lab)
Karen Bradley
I am very aware of the devastating fire in Exeter—I was actually in the west country over the weekend and saw the local news coverage. Having visited Exeter on a number of occasions, I know how important that building is in the cathedral precinct. Historic England sent a team of experts to the site on Monday to assess the situation, but I will take up the points that the right hon. Gentleman has raised.
Several hon. Members rose—
Graham Evans (Weaver Vale) (Con)
When the Minister for Digital and Culture has finished hobnobbing with Her Majesty, will he agree to meet me and my residents to see if we can get Weaver Vale connected with 21st-century broadband speeds?
Karen Bradley
As my right hon. Friend is not here, perhaps I can volunteer him for a visit to Weaver Vale.
Jim Shannon (Strangford) (DUP)
The favourable exchange rates mean that many people from the United States are visiting the Republic of Ireland for their holidays. What discussions has the Minister had with the Minister for the Economy in Northern Ireland to ensure that they also come north to Northern Ireland and across to the mainland?
Tracey Crouch
I thank the hon. Gentleman for his question. As I said earlier, I meet people from all the devolved Administrations, and I will be doing so again later this month. We have seen increasing numbers of tourists visiting Northern Ireland, specifically to see the Titanic exhibition. We will continue to market Northern Ireland as a great place to visit.
Paul Scully (Sutton and Cheam) (Con)
The Parliamentary Under-Secretary of State for International Trade (Mark Garnier)
The UK and Israel have a strong and important trading relationship, with nearly £6 billion in bilateral trade last year. The UK is the No. 1 destination for Israeli foreign direct investment in Europe, and there are now more than 300 Israeli companies established in the UK. I recently visited Israel to discuss investment and trade, and we will continue discussions on strengthening our important trade relationship.
Paul Scully
I thank my hon. Friend for that answer. UK-Israel trade is at a record high, with strong ties in science and technology, cyber-security and medical science, but the terms are currently determined by the EU-Israel association agreement. Does he agree that our vote to leave the EU presents a great opportunity to strengthen co-operation between our countries, and will he update the House on progress on planning and securing a new post-Brexit deal with Israel?
Mark Garnier
We are taking advantage of all the opportunities presented to us to ensure that Britain becomes a truly global leader in free trade once we leave the EU, and that of course includes Israel, building on our strong relationship in areas such as research and development and cyber-security. For example, we have established the UK-Israel tech hub, which creates partnerships between British companies and world-class Israeli innovators.
Joan Ryan (Enfield North) (Lab)
A survey this year found that 89% of Israeli tech companies and 86% of Israeli investors are interested in business and tech co-operation with the UK. What steps will the Minister be taking to take advantage of that good will and ensure that Britain continues to be a leading destination for Israeli tech companies?
Mark Garnier
The right hon. Lady is quite right to mention our growing relationship. In cyber-security, in particular, we saw a 24% growth in exports last year. I was recently in Tel Aviv and had the opportunity to visit a tech accelerator hub that is sponsored by Barclays. It is very encouraging to see that private sector relationship, which is something we will continue to encourage.
John Howell (Henley) (Con)
Mark Garnier
My hon. Friend is quite right to raise the interest in cyber. In February we led a successful cyber-security collaboration mission of businesses and academics, and we will continue to promote further such delegations.
Alan Brown (Kilmarnock and Loudoun) (SNP)
As part of these trade discussions, did the Minister raise the thorny issue of illegal settlements in Palestine and the demolitions that are ongoing? Demolitions of some buildings have actually been part-funded by the UK.
Mark Garnier
The hon. Gentleman will know that the Government do frown on the illegal settlements in the Palestine territories. These are not helping with the peace process—they are standing as an obstacle—and the Government continue to promote the two-state solution to ensure that Palestine becomes a viable and sovereign nation.
Tom Pursglove (Corby) (Con)
The Secretary of State for International Trade and President of the Board of Trade (Dr Liam Fox)
While we remain members of the European Union, discussions we have are limited by our considerations of the common commercial policy and our duties of sincere co-operation. We cannot negotiate and conclude trade agreements while we are a member of the European Union, but we can have discussions on our future trading relationships. The UK will continue to be a champion for free trade, and back the EU’s current and ongoing negotiations.
Tom Pursglove
I am very grateful to the Secretary of State for that answer. Does he agree that the decision to leave the European Union presents this country with an enormous opportunity to re-engage with our Commonwealth friends and to forge proper trading links with them once more?
Dr Fox
Yes, we are keen to seize all the opportunities that leaving the EU presents, and so, too, are many of our international partners, who recognise the attractiveness of doing business with the UK. I will be accompanying the Prime Minister on a trip next week to India to take forward some of those opportunities.
Barry Gardiner (Brent North) (Lab)
Does the Secretary of State see any irony or contradiction in his development of these new free trade and investment agreements, which involve the harmonisation of rules and standards with other countries—even obedience to supranational commercial courts—and the referendum instruction from the British people that we should leave membership of the largest free-trade agreement in the world so that we can set our own rules and take back our sovereignty?
Dr Fox
No, because the European Union is not simply a trading organisation. Were it simply a trading, and not a political, organisation, the referendum result may have been different. One of the major problems with the European Union, and one of the reasons why the public voted to leave, was that there is such a strong supranational imposition on the United Kingdom.
Mr Peter Bone (Wellingborough) (Con)
As we are leaving the EU, and everybody knows it, why do we not just get on and start negotiating trade deals? After all, the EU can hardly punish us in the future.
Kirsty Blackman (Aberdeen North) (SNP)
Has the UK managed to get the World Trade Organisation’s 160-plus members to agree that we will be a continuing member, rather than a new member, of the WTO? If the UK is not able to have negotiations just now, how will it get that agreement?
Michael Fabricant (Lichfield) (Con)
As my right hon. Friend has already said, to do a bilateral trade deal we need to be out of the European Union. Does he therefore deplore, as I do, the High Court’s decision this morning to rule against the Government and say that the will of the people in the EU referendum on 23 June is still subject to parliamentary approval?
Dr Fox
The Government are disappointed by the Court’s judgment. The country voted to leave the European Union in a referendum approved by Act of Parliament. The Government are determined to respect the result of the referendum. This judgment raises important and complex matters of law, and it is right that we consider it carefully before deciding how to proceed.
Kevin Brennan (Cardiff West) (Lab)
Will the Government respect the ruling of the Court in this matter, and also respect Parliament? If they want to get on with these trade deals, should they not accept that Parliament should have its say, as the Court has ruled?
Thangam Debbonaire (Bristol West) (Lab)
The Minister for Trade and Investment (Greg Hands)
As the hon. Lady will know, I am a great advocate of parliamentary scrutiny. The Department for International Trade is currently working to shape a more independent UK trade policy. Once we begin to negotiate trade agreements, Parliament will, of course, play its crucial role in ensuring that we deliver on our commitment to secure the best possible negotiation outcome for the whole of the UK.
Thangam Debbonaire
Trade agreements need at least 50 negotiators per bilateral. The former Brexit Minister, the right hon. Member for West Dorset (Sir Oliver Letwin), said in July that the UK has “no trade negotiators”. The Minister of State himself said last month that the number has “doubled since June”. Zero doubled is still zero. Will the Minister come clean? Exactly how many trade negotiators do we have?
Greg Hands
I think the hon. Lady is conflating and confusing two different statistics relating to those working on trade policy and those working on trade negotiations. The answer that I gave in the written answer is correct: the number of people working on trade policy in the Department has doubled since the Department’s creation in July.
Sir Edward Leigh (Gainsborough) (Con)
The truth is that this Parliament is, always has been and always will be sovereign, so Parliament could overcome any trade deal it wanted. The question we have to ask ourselves is whether Parliament should resist the will of the people.
Greg Hands
My hon. Friend makes a very good point. I am not going to add anything to what the Secretary of State said earlier about the Court judgment, which has just been released.
Mr Speaker
Before I call the right hon. Member for Carshalton and Wallington (Tom Brake), I am moved to congratulate him on his achievement in winning the yellow jersey for his performance yesterday on the British Legion stationary bicycle. It was a remarkable athletic feat on his part.
Tom Brake (Carshalton and Wallington) (LD)
Thank you, Mr Speaker. It is nice to come first at something when you are a Liberal Democrat.
More seriously, on the subject of debating and voting on essential trade matters, is it not essential that the Government give way to the courts and allow Parliament to be sovereign and to debate and vote on the issue of article 50?
Greg Hands
I first join you, Mr Speaker, in congratulating the right hon. Gentleman on achieving the yellow jersey. I thought for a moment that it was an internal Liberal Democrat award, in which case winning out of eight was perhaps not the greatest of achievements, but I commend him on what he has done.
I have nothing to add to what the Secretary of State said earlier, but I will say that, in general, we are very committed to consulting Parliament on the future of trade agreements, which is the subject of the question on the Order Paper.
Mr Speaker
Certainly, the right hon. Member for Carshalton and Wallington beat me, as he is signalling from a sedentary position. I did my best, but he was far superior and I pay him due tribute.
Geoffrey Clifton-Brown (The Cotswolds) (Con)
Will my right hon. Friend the Minister confirm that, notwithstanding this morning’s Court judgment, Brexit means Brexit—[Interruption.]—and the will of the British people in the referendum will be respected?
Greg Hands
I entirely agree with my hon. Friend. I campaigned for the remain side on 23 June, but nevertheless I fundamentally and totally agree that Brexit means Brexit. This Government are getting on with delivering and making sure that it works for the whole of the United Kingdom.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
The Secretary of State for International Trade and President of the Board of Trade (Dr Liam Fox)
The people of Britain voted to leave the European Union and that is what we will do. It is the job of this Department to maximise the UK’s trade opportunities, whatever the relationship with the EU that the Government ultimately adopt. The Prime Minister has made it clear that the UK’s agreement with the EU will get the best deal for Britain at home and abroad.
Jonathan Edwards
Via our membership of the customs union the UK has access to more than 50 international trade deals, which according to a parliamentary answer I received accounts for 15% of UK exports. In the event of Brexit outside the customs union, what estimate has the Secretary of State made of the length of time it will require to renegotiate those deals, bearing in mind that he will not be able to begin his negotiations until after exit in March 2019?
Dr Fox
There are a number of errors in what the hon. Gentleman has said. The EU currently has 36 free trade agreements covering more than 50 countries. It is entirely possible for us to be able to transition those into UK agreements and we are free to discuss them with countries while we are still a member of the European Union. Our aim will be to have minimum disruption of trade and no gap in market access for British companies.
Richard Fuller (Bedford) (Con)
Although I welcome the Canadian-EU trade agreement, does my right hon. Friend share my concerns at the elements of protectionism that have emerged in this agreement? Do they not indicate that there are advantages to the United Kingdom outside the customs union in negotiating its own deals more rapidly, in defence of free trade?
Dr Fox
In recent history, most of the trade deals done in the world have been bilateral, because it is clearly easier to get country-to-country agreement. One of the reasons why the European Union does not have an agreement with the United States, China, Japan, India or the Gulf is that it is rather difficult to negotiate with 28 different partners, especially if they retain a veto.
Ian C. Lucas (Wrexham) (Lab)
The creative industries are some of Britain’s most competitive and successful industries, and they depend on worldwide access and negotiation with many multinational organisations. How, post-Brexit, will the UK maintain relationships with multinational organisations such as the EU and worldwide broadcasting organisations?
Dr Fox
The hon. Gentleman is absolutely right. The creative industries are incredibly important, and one of the jobs of the Department for International Trade is to promote them. When we take trade delegations abroad and when we make representations to other Governments, we will fully take those industries into account. Where we have got areas of excellence in our economy, we need to promote them—sometimes more than we have done in the past.
Richard Graham (Gloucester) (Con)
The Secretary of State knows about the growing opportunities for trade and investment, in both directions, with the countries of south-east Asia. Does he agree that next year’s 50th anniversary of the Association of Southeast Asian Nations offers a great chance for the UK to demonstrate what a superb international platform we can be for all those countries’ exports and investment in both directions? Will he commit to DIT offering some finance to help this great session to go well?
Dr Fox
I will certainly offer a great deal of help and goodwill. Mindful of the forthcoming autumn statement, I am not going to offer any sort of finance in advance of the Chancellor’s permission being granted.
May I say what a great job my hon. Friend the Member for Gloucester (Richard Graham) does as one of our trade envoys? Our trade envoys have contributed hugely to our recent export gains. He makes the important point that trade has to operate in both directions, both in exports and imports and in outward and inward investment. It is very important that we maintain a balance if we are to have a chance of reducing our current account deficit.
Mr Alan Mak (Havant) (Con)
David Rutley (Macclesfield) (Con)
Michelle Donelan (Chippenham) (Con)
The Minister for Trade and Investment (Greg Hands)
We want more British businesses to take advantage of trade opportunities. Currently, only 11% of British businesses export. Our overseas teams continue to help British businesses to win opportunities in 108 different markets, with 190 high-value priority campaigns.
Mr Mak
British businesses benefit from the expertise of our embassies and consulates when seeking trading opportunities abroad. I saw that for myself at first hand while I was in Hong Kong over the summer. Will the Minister continue to back British businesses to gain market access by supporting our missions overseas?
Greg Hands
I certainly will. My hon. Friend and I had a productive conversation just last week following his successful visit to Hong Kong. The Under-Secretary of State for International Trade, my hon. Friend the Member for Wyre Forest (Mark Garnier) was also in Hong Kong last month, and we are absolutely committed to using our networks and our professionals overseas to boost both trade and investment.
David Rutley
Given the strong contribution made by the life sciences sector to UK exports—AstraZeneca’s site in Macclesfield made a huge contribution to the company’s £5 billion-worth of exports in 2015—will my right hon. Friend tell the House what steps he is taking to work with the sector to ensure that medicines that are researched, developed and manufactured in the UK continue to have ease of access to European markets and global growth markets once the UK leaves the EU?
Greg Hands
I know my hon. Friend’s passion for life sciences, and particularly for AstraZeneca’s key role in his constituency. We are liaising and working closely with the industry with an important working group, which has met on several occasions and recently briefed Ministers. We want, of course, the best possible arrangements for trade in all goods and services, including the pharmaceutical sector.
Michelle Donelan
UK Trade & Investment has been very helpful to businesses in my constituency, but there are still many small businesses that need help and support to export and utilise the exchange rate of the pound. Would the Minister advocate UKTI holding events in Wiltshire and around the country to achieve that?
Greg Hands
Yes, we are very open-minded about doing events on either a county or a constituency basis. I am open-minded about how that might best be pursued. We have regional teams in the Department for International Trade, but if my hon. Friend and I were to have a discussion, particularly about what we may be able to do in Chippenham, I would be all ears.
Chris Leslie (Nottingham East) (Lab/Co-op)
Will the Minister look at the trading opportunities we need for sectors that play to our comparative advantage already? As he knows, financial services amount to 12% of our output, yet the sector faces not a 10% or 20% tariff after April 2019 if we get this wrong, but a ban on selling and trading in many financial products altogether. What about some transitional arrangements? Will he talk to the Treasury about that?
Greg Hands
The hon. Gentleman and I used to spar regularly on Treasury matters. I congratulate him on his election to the International Trade Committee. I look forward to appearing before him in due course. He will know that our priority is to maintain the maximum possible access to the single market across all these sectors.
Ms Tasmina Ahmed-Sheikh (Ochil and South Perthshire) (SNP)
Research published this week by the National Institute of Economic and Social Research shows that access to the single market is vital for the future trading of many Scottish companies. Leaving would have implications of titanic proportions. The Minister’s Government stood on a manifesto commitment to retain membership of the single market. Given that voters in Scotland voted to preserve that status in June’s referendum and that both the Scottish Parliament and the Scottish Government believe that that is in our best interests, what assurance can the Minister give individuals and businesses in Scotland that he will listen to the forthcoming proposals by the Scottish Government and deliver on that Government’s triple mandate to keep Scotland in the single market?
Greg Hands
Of course we will listen to proposals and suggestions made by the Scottish Government. The Prime Minister has been absolutely clear on that. However, as we are talking about icebergs, perhaps the hon. Lady will reflect on one thing: 64% of goods leaving Scotland are destined for the rest of the United Kingdom. When it comes to a single market, I think she might prioritise that single market, rather than the one in which only 15% of goods go to the European Union.
Bill Esterson (Sefton Central) (Lab)
The Foreign Secretary forgot about the icebergs when he mentioned the Titanic last night. Uncertainty is the enemy of business. Businesses need certainty about our future trading arrangements so they can make investment decisions. As the president of the Japanese chamber of commerce has said, other EU states are talking to UK-based companies. Are the warnings not there for all to hear? If the Secretary of State for International Trade has a plan, he needs to share it, otherwise businesses that need certainty will go elsewhere to find it.
Greg Hands
May I welcome the hon. Gentleman to the Front Bench? It is good to see that the hon. Member for Brent North (Barry Gardiner) has some reinforcements this week. I notice that he has lost three of his four portfolios since he last appeared in the Chamber, so it is good to see other hon. Members helping him out.
I attended an event with the Japanese ambassador only this week. He was clear about the role that Japan plays and that Britain plays in promoting global free trade and global free markets. That is rather in contrast to the hon. Gentlemen’s leader calling free trade a “dogma”, which I think should be condemned.
Amanda Milling (Cannock Chase) (Con)
The Secretary of State for International Trade and President of the Board of Trade (Dr Liam Fox)
The Department for International Trade has three tasks: promoting UK exports to support a growing economy that serves the whole country; maximising opportunities for wealth creation, including through overseas direct investment to support the current account; and negotiating the best international trading framework for the UK outside the EU. Like the UK, my Department is open for business. Following my statement at our previous session of departmental questions, we received 111 applicants, in an international competition, for the post of permanent secretary, and we will shortly announce the successful candidate.
Amanda Milling
As a country, we need to export more. There are a lot of barriers to overcome to get businesses to start exporting or even to consider exporting, but we have a real opportunity to get existing exporters to export to more markets. Will my right hon. Friend outline the measures that the Government are taking to encourage and support small and medium-sized businesses to expand the number of markets to which they export?
Mr Speaker
Order. We must not expand the length of questions, I am afraid. I am sure it is a very important point, but let us have the answer.
Dr Fox
I apologise for taking longer than usual to get to the Dispatch Box, Mr Speaker—the last time I take my own advice about going to the gym to get fit. It is important to get more small and medium-sized enterprises exporting. If we look at the UK’s performance we see that only 27% of our GDP is accounted for by exports, whereas for Germany it is 48%. A lot of that difference is accounted for by a lack of SME exports. We will be announcing a range of measures soon, and there will be a pack setting out those measures available for all Members of Parliament so that we can all help the SMEs in our own constituencies.
Barry Gardiner (Brent North) (Lab)
The Government Front-Bench team has tried to suggest that the High Court decision that Parliament should have a vote before triggering article 50 is in some way antidemocratic or thwarts the referendum result. Will the Secretary of State acknowledge that the vast majority of Members in this House are now committed to honouring the decision to leave the EU, but that democracy demands that the terms of our leaving must be subject to the proper advance scrutiny and consent of this democratically elected House, and not negotiated in secret and smuggled through without the support of this sovereign Parliament?
Dr Fox
There will be numerous opportunities for the House to examine and discuss what the Government are negotiating. When we are clear about the position we will adopt, article 50 will be triggered, but given the nature of the judgment this morning we will now have to await the Government’s appeal to the Supreme Court.
Mrs Theresa Villiers (Chipping Barnet) (Con)
Dr Fox
As I said earlier, the EU has some 36 free trade agreements, which cover more than 50 countries. A very large number of those have already made representations to the United Kingdom to say that they would like those agreements to continue. We will explore and discuss that, because, as I have said, our aim is to have no break in access to markets and to achieve the transition as smoothly as possible, with minimal disruption to the international trading environment.
Stuart Blair Donaldson (West Aberdeenshire and Kincardine) (SNP)
Dr Fox
I take an intense personal interest in this area, from long experience. I am delighted to see David Frost in his new position—he was so pleased with our policy he joined the company. It is very important that we get reductions in tariffs. One issue I will be raising in India next week is the very high level of tariff against scotch whisky there, to see whether we can make major reductions.
Jeremy Lefroy (Stafford) (Con)
Dr Fox
May I first praise the work of UKEF? As a Government export credit agency it is the world leader and its practices are second to none. However, we are always trying to streamline and improve, and in fact have appointed a new chairman for UKEF, who will be announced shortly. When they are in place they will certainly be shaking up the organisation.
Mr Ben Bradshaw (Exeter) (Lab)
Some 80% of the fish caught around our coastline in the south-west goes straight for export to the rest of the European Union, and there is huge concern in the industry about the impact of tariffs if we leave the single market. Given that concern, and the excellent news from the High Court, would it not be wise of the Government not to invoke article 50 as early as March?
The Parliamentary Under-Secretary of State for International Trade (Mark Garnier)
Export tariffs on food products, and on animal products in particular, are determined outside the provision of trade agreements. They are determined in terms of licensing based on the quality of the food products, on a separate basis.
Mark Menzies (Fylde) (Con)
The Minister for Trade and Investment (Greg Hands)
I commend my hon. Friend for his engagement with Argentina under its new Government, which he and I have discussed. As the Prime Minister has said, we will seek to be the global leader in free trade. While we remain a member of the EU, the UK will continue to press for and support an ambitious EU trade agenda, including its negotiations with the Mercosur bloc.
Daniel Zeichner (Cambridge) (Lab)
The Minister repeated the mantra that he wants the best possible deal for the life sciences sector, but does he agree with industry leaders that we need to be part of a European-wide regulatory system? A simple yes or no will suffice.
Andrew Rosindell (Romford) (Con)
Mark Garnier
My hon. Friend is right to raise that. We have strong economic links with Gibraltar and 20% of the UK car insurance market is underwritten within Gibraltar. I stress that we have an interest not just in Gibraltar but in all the overseas territories. I met many of the leaders yesterday. They will very much be involved in the process of the negotiations of our deal with the EU as we progress through article 50.
Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP)
Leaving the single market would mean that our agricultural exports would be subject to World Trade Organisation tariffs, which will have a hugely detrimental effect on a vital industry for Scotland. Does the Secretary of State plan to get farmers a special deal to ensure that they are not affected by sudden rises in tariffs to protect that vital industry?
Mark Garnier
The hon. Lady is right to raise that. It is incredibly important that we secure good tariff deals with other countries, and agricultural products suffer some of the highest tariff levies, but it is a two-way operation. On the one hand, exporters from Scotland to other markets may face big tariffs, but on the other hand, if we end up with a very low tariff barrier, we will have to impose it, which could mean that her farmers in Scotland are flooded by imports. It is a difficult and nuanced area to try to get right.
Anna Soubry (Broxtowe) (Con)
I refer to the answer given by my right hon. Friend the Secretary of State on today’s article 50 ruling, which says that the trigger should be exercised within Parliament. I think my right hon. Friend said that the Government will appeal, but I ask him, on behalf of the Government, please to look at the learned judges’ ruling and understand that it is not about a re-run of the arguments of the EU referendum. It is all about Parliament’s sovereignty. In that event, will the Government look at it carefully to decide whether or not the learned judges are right, and that this place should and indeed will trigger article 50?
Mr Speaker
Not least we will bear in mind the importance of referring to international trade in responding to the right hon. Lady.
Several hon. Members rose—
Mr Speaker
Order. I am sorry to disappoint remaining colleagues—demand invariably outstrips supply—but we will return to these important matters ere long.
SELECT COMMITTEE ON HEALTH
(8 years, 1 month ago)
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Select Committee statement
Mr Speaker
We now come to the Select Committee statement. Dr Sarah Wollaston, the Chair of the Health Committee, will speak on the subject for up to 10 minutes, during which—I remind colleagues of this relatively new procedure—no interventions may be taken. At the conclusion of the statement, the Chair will call Members to put questions on the subject of it and call Dr Wollaston to respond to them in turn. Members can expect to be called only once each. Interventions should be questions and should be brief. Those on the Front Bench may take part in questioning.
Dr Sarah Wollaston (Totnes) (Con)
The Health Committee held an inquiry into winter pressures in accident and emergency departments. What we found, however, was that those pressures are now year-round, and that they worsen in the winter.
I would like to start by thanking all those who work in our national health service and our ambulances services, and all those who submitted written evidence and presented oral evidence to our inquiry. I also want to thank all fellow members of the Committee and the Committee team, especially Huw Yardley and Stephen Aldhouse, for their contribution to the report.
The root of the problem is unprecedented demand. It is not just about the sheer number of people arriving in our accident and emergency departments—on average, around 40,000 people attended a major accident and emergency department per day in 2015-16, which was 6,000 more per day than five years previously—it is also about the complexity of the conditions with which they are presenting. The worsening performance that we are seeing, which is of great concern to the Committee, is also a reflection of system-wide pressures across the whole NHS.
We noted that only approximately 88% of patients arriving at major accident and emergency departments are being admitted, transferred or discharged within four hours. That is concerning, because it falls considerably short of the target performance standard of 95%. We should not think of this as just an arbitrary target or a tick in a box; it matters for patient safety and for patients’ experience of the care they receive.
Our report identifies a number of factors. We are also concerned about the level of variation in performance of accident and emergency departments. Often that performance cannot be attributed only to local pressures or demographics. We acknowledge that there are many things that hospital trusts can do to learn from the best performing departments to help improve the flow from the front door to the point of discharge, and to prevent people from getting caught in that revolving door by being readmitted. I pay tribute to the efforts of NHS England and of all those working locally and regionally to try to make sure that the NHS starts to learn from best practice, and I particularly commend Pauline Philip and her team for what they are doing.
One thing, however, comes across very clearly from our report: the impact that the deficiencies in social care are having on accident and emergency. If we cannot discharge patients at the end of their journey because no social care packages are available, it has a domino effect throughout the whole system. Not only that, but people arrive in accident and emergency departments who could have stayed at home if they had had the right social care package. The Committee therefore repeats its request to the Chancellor to look at social care in his autumn statement and to prioritise it.
We also recognised that many accident and emergency departments are under particular pressure because of their working infrastructure—the premises may be completely inadequate to cope with the increase in demand and complexity—so we repeat our call to the Chancellor to look in his autumn statement at the capital budgets in the NHS and to make sure that the funds are available to allow the transformative changes that can bring struggling A&Es up to the same performance level as those that are functioning the best.
There are also, of course, issues with the workforce. We are concerned about the impact of workforce shortfalls in the NHS, and we ask Health Education England to redouble its efforts to look at them.
When we visited East of England ambulance trust we found that it was concerned, as were others who submitted evidence, about the impact of delayed transfers at the front door of accident and emergency departments. Again, there is great variation, and it is not all about infrastructure. If ambulances are all gummed up in one accident and emergency department it has a serious knock-on effect within an ambulance trust area, so we call on those who are not putting in place the correct procedures to look carefully at the impact that that is having and to make changes this winter.
The Government also need to look at issues around alcohol policy. Anybody who has attended an accident and emergency department on a Friday or a Saturday night will know of the pressures that problem drinking creates. We ask the Government to consider making health an objective for licensing and to look at doing all they can to reduce the impact of alcohol. That impact is felt not just on waiting times, of course, but on the morale and wellbeing of staff working in our emergency services.
I thank all those who have contributed to this inquiry, and I look forward to hearing the Government’s response.
Justin Madders (Ellesmere Port and Neston) (Lab)
I echo the words of the Chair of the Select Committee in thanking all the staff who work so hard in the health service. I also thank those who produced and contributed to the Select Committee’s report, which is important and concerning in equal measure.
The report is clear that years of underfunding in social care are now having a dramatic effect on A&E presentation. Does the Chair of the Select Committee agree that, ahead of the autumn statement, if there is to be the necessary injection of cash into the social care sector the Chancellor will have to come up with a better solution than one that relies on hard-pressed local councils raising the necessary funds locally?
Dr Wollaston
I thank the shadow Minister. The Committee agrees that there needs to be more funding for social care. We were concerned that the evidence we heard in this inquiry and previous inquiries is that the money raised from the social care precept has been swallowed up by the cost of the living wage. We absolutely welcome an increase in pay for hard-pressed care workers, but we feel that the increase in funding is completely inadequate to deal with the scale of the increase in demand.
The Minister of State, Department of Health (Mr Philip Dunne)
I would like to add my welcome for the work of the Health Committee in this report and to say how pleased I was to have the opportunity to appear before my hon. Friend’s Committee for the first time since taking up this post.
We all recognise that the system is facing a challenging winter, but we are determined to ensure that the NHS and the social care sector are focused on trying to deliver for patients and that the national organisations, where possible, are in a position to support them effectively this winter.
This year, the NHS is better prepared for winter than ever before, with NHS staff working incredibly hard throughout the year and more ready for what will be the busiest time for the NHS. Despite increased demand, the NHS is performing well, with nine out of 10 people seen in A&E within four hours.
We have ensured that there are robust plans in place. That includes providing for the availability of key services, such as primary and social care, during the Christmas and new year bank holiday periods in advance, which has not happened before. For the first time, there is also a national A&E improvement plan to improve flow through hospitals from the front door to final discharge, with the implementation of five initiatives, and there is a specific intervention on discharge.
The Select Committee’s report highlights continuing pressures on emergency departments, so does my hon. Friend share my welcome for the 25% increase in doctors—almost 1,200 more doctors—working in emergency medicine since 2010?
Dr Wollaston
Of course I welcome the increase in staff in our accident and emergency departments. As the Minister will recognise, there is further to go in this regard.
Mr Ben Bradshaw (Exeter) (Lab)
Does the hon. Lady agree that the four-hour A&E target is absolutely vital, because it, more than any other target, shows the overall performance of a hospital, and that the figures are extremely worrying? Does she also share my concern that last winter was very mild, and we were relatively lucky, with the absence of a big winter flu outbreak? If this winter is as cold as this Chamber, the NHS could face a very serious crisis indeed.
Dr Wollaston
Certainly, the evidence we heard in our inquiry was that there is grave concern about the level of existing pressure. As the right hon. Gentleman says, if we see a very cold winter, and the flu vaccine does not work as well as it did last winter, we are in serious difficulties. But I stress again that the Committee was very clear that we want to see the four-hour waiting time standard continued, because it is a good measure of whole-system pressure, and if people are facing very long waits that leads to a deterioration in patient safety. So it is a quality issue, as well as an issue about patient experience.
Andrew Selous (South West Bedfordshire) (Con)
I note what the Chair of the Health Committee says about social care and delayed transfers of care. Would she commend an initiative taken in hospitals in Fife, where the most senior consultants were put into accident and emergency, which led to a 30% reduction in admissions to the hospital? Does she not agree that more junior staff are sometimes perhaps slightly more risk-averse because they do not have the experience? Does she not think that, where Fife has led, other hospitals around the UK could usefully follow?
Dr Wollaston
I thank my hon. Friend, and I welcome him to the Health Committee. Yes, he is absolutely right that one of the initiatives that has been put forward is to look at streaming at the front door, but what we heard is that this is quite nuanced. If very senior staff are tied up seeing every single person at the front door, that can be a waste of resources. However, if the patients who are most at risk of needing admission—the sickest individuals —are identified early on and seen by the most senior doctors available, then yes, absolutely, that makes a difference.
Karin Smyth (Bristol South) (Lab)
I had a little smile to myself at the Minister’s response. When I was a commissioner, we often said to each other, “It’s another A&E plan—it must be winter again.” On Monday, I asked the Secretary of State about the £2.4 billion protection for general practice, and I am afraid that there was not a satisfactory answer and the money will not plug the hospital deficits. There are very severe general practice problems in south Bristol and very worrying reports about sustainability. I am looking forward to the report, but will the hon. Lady say something about the role of general practice in the winter pressures issue?
Dr Wollaston
We have to think of A&E winter pressures as a marker for the whole system. The hon. Lady is absolutely right and I welcome her reference to primary care, because if people cannot get an appointment in primary care, they are more likely to end up in A&E. Luton and Dunstable is now co-locating primary care so that people arriving at the front door who are more appropriately seen there can be seen directly in that setting. There is, however, another viewpoint: co-locating can sometimes end up creating demand, meaning that more people go there directly, so our report calls for better evaluation of the different models. One of the things that Luton and Dunstable does particularly well is apply evaluation at every stage to the changes it makes. The answer is complex, in that co-location may be absolutely the right thing for some systems, but not necessarily the right thing across the board. I absolutely agree with the hon. Lady that people need to have decent, timely access to primary care.
Air Quality
(8 years, 1 month ago)
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Neil Parish (Tiverton and Honiton) (Con) (Urgent Question)
To ask the Secretary of State for Environment, Food and Rural Affairs what steps her Department will take to improve air quality after her defeat in the High Court on 2 November.
Mr Speaker
Order. The hon. Gentleman is chuntering about diesel cars and who might be occupying them, but we have a Minister at the Dispatch Box, and she is a doctor as well. We are going to hear from her.
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Dr Thérèse Coffey)
Improving air quality is a priority for this Government. We are determined to cut harmful emissions to improve the health of the people we represent, and to protect the environment. The UK currently meets the legal limits for almost all pollutants but faces significant challenges in achieving nitrogen dioxide limit values. We are not alone in that, as 16 other EU countries face similar challenges.
We have already achieved significant improvements in air quality across a range of pollutants, but transport is responsible for 80% of nitrogen oxides emissions at the roadside in areas where we need to act to reduce levels. That is why transport has been the focus of our action on air quality. We have committed over £2 billion in green transport initiatives, including supporting the early market for ultra-low emission vehicles between 2015 and 2020. The main reason for the difficulty in meeting NO2 limit values is the failure of Euro standards for diesel vehicles to deliver the expected reduction in NOx emissions in real-world conditions. Since 2011, we have been at the forefront of action in the EU to secure more accurate, real-world emissions testing for diesel cars.
The Transport Act 2000 gave powers to councils to introduce measures to help to tackle air pollution. The national air quality plan for NO2, published in December, set out an approach to improve air quality and achieve compliance. We are mandating five cities to introduce clean air zones, and targeting the oldest and most polluting vehicles. The consultation on this framework was launched last month to ensure a consistent approach.
Our plan was based on the best available evidence at the time. We have been pressing for updates to COPERT—computer programme to calculate emissions from road transport—emission factors and got them in September. We said that when we got the new factors we would update our modelling and that is exactly what we are doing.
I am writing to councils to ask them what they are doing to tackle air pollution. Our local authority grant fund was launched in early October and we are encouraging all local authorities to apply. We will shortly launch a consultation on policy options for limiting emissions from diesel generators. In addition, funding was announced last month to boost the uptake of ultra-low emission vehicles. We accept the judgment of the court and will now carefully consider it, and our next steps, in detail. However, legal proceedings are still ongoing, so I may not be able to answer every hon. Member’s question in detail.
I can assure you, Mr Speaker, that this is a top priority for me. It is a top priority for the Secretary of State. As the Prime Minister said yesterday:
“We have taken action, but there is more to do and we will do it.”—[Official Report, 2 November 2016; Vol. 616, c. 887.]
Neil Parish
I thank the Minister very much for that response. The Department for Environment, Food and Rural Affairs is very much in the dock, but the whole Government need to take action. This is the second time the Government have lost in the courts on the issue of air quality in 18 months: they need to take this matter very seriously. The problem causes up to 50,000 deaths a year—more than 20 times the number killed in road accidents. It is a silent killer.
The Government’s current air quality plan has only five compulsory clean air zones, but more than 40% of councils breach air pollution limits. The Government need to take rapid action or they will be back in the dock again. In April, the Environment, Food and Rural Affairs Committee report on air quality called for all councils to have the power and the funding to implement clean air zones. Will the Government make that commitment?
The Government have to look at getting the worst diesel vehicles off our roads quickly. Will the Department consider financial incentives, such as a scrappage scheme and changes to the vehicle tax system? Those changes would have to be made via the Treasury, because successive Governments have been encouraging diesels. That has to be reversed.
Some 70% of air pollution comes from road transport. Will the Department act now, with the Department for Transport, to promote electric cars and encourage taxi conversions from diesel to liquefied petroleum gas, which can reduce nitrogen dioxide levels by 80%? The court case revealed that the Treasury has been blocking stronger measures on air quality. I have sympathy with the Minister, but will her Department now commit to working with the Department for Transport and the Treasury to tackle this matter once and for all? Clean air should be a right, not a privilege. I look forward to the Minister’s response.
Dr Coffey
My hon. Friend raises a wide range of issues. Let me try to pick up on them. In a parliamentary question, he rightly revealed the number of councils where there are issues. I take this seriously. In my constituency, there are two air quality management areas. That is why I want to work with local councils to do what we can to tackle action locally. Of course the Government will work on issues to tackle air quality nationally, but we need local action. Powers are already available, under the Transport Act 2000, for councils to take appropriate measures, and I will encourage them to do that. Again, that is why we are encouraging councils to apply for help from the air quality fund.
We are all aware of the issue with Volkswagen and diesel vehicles. We have been pressing for updated COPERT factors. The spreadsheet is exceptionally complicated. It is the biggest spreadsheet I have ever seen in my life. As I used to be chartered accountant, I can assure the House that I have probably seen more than most.
It is a complex situation, and we are working through it. We are coming up with what we can think of to try to tackle this issue, but I genuinely believe that we need targeted interventions rather than use a sledgehammer to crack a nut. The Labour Government introduced fiscal incentives that encouraged people to move to diesel. I am not going to complain about that. We are where we are, and the Government and local government must all pull together because we care about the people we represent. My hon. Friend is absolutely right: air quality is the top priority, which is why it is my No. 1 priority in government.
Rachael Maskell (York Central) (Lab/Co-op)
Up to 50,000 people die prematurely each year in the UK as a direct result of air pollution, and many more suffer from respiratory disease. This is a crisis and a national scandal—deaths that would have been avoidable if the Government had taken action, and suffering on a mass scale, most prevalent in the most deprived communities. Nitrogen dioxide is a silent killer, but Labour Members will not be silent about this.
Yesterday’s damning judgment in the High Court shamed this Government, who were told to put an air quality plan in place in 2010. Six and a half years later and following two further judgments in the High Court, the Government have been found wanting. The World Health Organisation and the European Union recognise how serious air pollution is. That is why yesterday Justice Garnham condemned the Government’s poor estimates on emission levels—even after the Volkswagen scandal—and their slow response to addressing high emissions. Urgency is needed.
I thank ClientEarth for taking the action as there is no time to waste on tackling this issue, as Labour would have done. We cannot afford to allow this to continue or to shift the blame on to councils. This is negligence.
I therefore ask: will the Government guarantee that, instead of creating just five clean air zones, they will now put in place a network of zones across all 37 out of the 43 areas with high emission levels? Why have they wasted time and resources fighting court cases, instead of fighting air pollution? The High Court judge condemned the Government’s delay in reducing ambient nitrogen dioxide levels. How soon will the Government have in place a comprehensive plan on air quality? How will fuel emission measurements now proceed? Will the Government guarantee that, in leaving the EU, they will not water down air quality standards, and how will this be policed? Will the Government introduce a clean air Act, which Labour has done in the past and will do in the future? Will the Government now clean up their act and clean up our air?
Dr Coffey
As I am trying show in the tone of my response to this urgent question, this really is a top priority. It is not straightforward. We produced a national air-quality plan based on the best available evidence at the time. We now have new factors, and we are updating the model. We are responding to the needs that we have. I have pointed out that a framework is already out for consultation and councils can do this now if they wish. We are mandating. We need to look carefully at the evidence and what the model says about where we mandate further.
Leaving the EU has absolutely nothing to do with our determination to improve air quality in this country. There is no need for new legislation; we already have powers in place, and we are consulting on new powers.
We have already reduced nitrogen dioxide by 41% in the last 10 years. We are still taking action to do that. Let us not get into the blame game; otherwise, we could go into the history of Labour and what the Labour Government did on diesel in the first place. That is not worth while. What matters is that we pull together and address this issue.
Dr Tania Mathias (Twickenham) (Con)
In the light of this judgment and of the fact that car journeys to Heathrow are increasing at a rate of 2 million over two years, how can the Government support more pollution that would come from a third runway at Heathrow?
Dr Coffey
My right hon. Friend the Secretary of State for Transport referred to that issue when he came to the House to discuss the Heathrow decision. The Government believe that the Heathrow north-west runway scheme can be delivered without it having an impact on the UK’s compliance with air quality limit values, and with a suitable package of policy mitigation measures. Policies at national, London and local level will help to ensure that the scheme can be delivered in line with our legal obligations in respect of air quality.
Mary Creagh (Wakefield) (Lab)
The Minister rightly says that this is not straightforward, but documents revealed to the court showed that the Treasury is blocking measures proposed by her Department and the Department for Transport that would actually tackle air pollution. The Environmental Audit Committee published a report on sustainability in the Department for Transport, in which we concluded that we had no confidence that the Department would meet either its 2020 or its 2030 target on low-emission vehicles. Given that the autumn statement is imminent, will the Minister now go back and work with the Department for Transport, and, critically, the Treasury, to unblock the pipeline and ensure that we stop dirty diesel?
Dr Coffey
The Environmental Audit Committee does important work in monitoring those ongoing issues. The Department for Transport and DEFRA have been working together, and we established the joint air quality unit earlier this year. I am also meeting public health and DCLG Ministers. As I have said, I am absolutely committed to trying to make a difference in this area.
The hon. Lady will be aware of the scheme that we launched last month to fund more charging points for low emission vehicles, focusing on taxis as well as cars. Those measures are well under way. I assure her that the Department for Transport takes this issue very seriously and that we will be making further progress, and I am sure that the Treasury has also heard her pleas. Moreover, the Prime Minister gave an undertaking in the House yesterday that we would do more in relation to air quality.
Mark Field (Cities of London and Westminster) (Con)
I am encouraged to hear that the Minister is making air quality her first priority. I hope that it will continue to be so until the problem is solved, because this is a deplorable state of affairs. I know that the Minister is part of a new ministerial team, but I agree with everything that was said by my hon. Friend the Member for Tiverton and Honiton (Neil Parish). My own constituents have had enough of the current appalling state of air quality. I know that I am in the middle of a big city, but the same applies to many other parts of the country. We need to ensure that the perverse incentives for diesel are stopped in their tracks, and I hope that the Minister will make representations to that effect at the highest level.
Dr Coffey
As my right hon. Friend suggests, the Government intend to continue to encourage people to opt for low-emission vehicles. As for what is being done in London, the Mayor said that he would plant 2 million trees in the run-up to the campaign—[Hon. Members: “Where are they?”]—and I hope that he keeps to his pledge over the next four years, because that will help to improve air quality. I know that the Transport Committee has asked him to appear before it. As I have said, it is important for central and local government to work together to help the people whom we all represent.
Mr Ben Bradshaw (Exeter) (Lab)
May I gently suggest to the Minister that talking about sledgehammers and nuts is not really appropriate in this context? Air pollution is the biggest avoidable killer apart from smoking. The Minister needs a sledgehammer, and she needs to take the sledgehammer to the Treasury.
Given that this is the second humiliating defeat that the Government have suffered in the courts, surely there was a plan to announce some action here, today, in response to that defeat. Where is it? Where are the new measures?
Dr Coffey
As the right hon. Gentleman will know from his time in government, measures take some time to work up. He may shake his head, but I am not going to become involved in the blame game and talk about what happened under Labour, when the number of diesel vehicles on the road increased. What I will say is that I am working closely with officials to come up with the wide range of actions that we wish to take, and I can only add that we hope to announce them in due course.
Wendy Morton (Aldridge-Brownhills) (Con)
I recognise that my hon. Friend acknowledges that more needs to be done, and I am grateful for her statement. Does she agree that, in seeking to do more to address the problem, we should take the opportunity to use some of our home-grown innovation and technologies?
Dr Coffey
My hon. Friend is right. We should recognise the progress that the United Kingdom has made in respect of low-emission vehicles, and I hope that some of the new incentives will encourage people to think of buying one when they come to replace their cars. The Department for Transport is investigating other technologies as well, and I hope that they will prove fruitful in helping us to tackle this issue.
Helen Hayes (Dulwich and West Norwood) (Lab)
The Mayor of London is making huge strides in cleaning up London’s bus fleet, in stark contrast to his predecessor, and he deserves to be recognised for taking this issue seriously while the Government are failing. However, urgent action is needed to tackle HGVs, private cars and other diesel vehicles. Will the Minister now set up a comprehensive plan at a national level, including scrappage schemes, fiscal incentives and urgent investment in research and development to help the Mayor and others to remove the highest polluting vehicles from our roads?
Dr Coffey
Transport for London had an £11 billion settlement from which it can decide to prioritise certain actions. I do commend the Mayor, who is bringing forward measures more quickly, particularly on buses. We need targeted interventions rather than, perhaps not a sledgehammer, but comprehensive schemes which may not be the best use of taxpayers’ money in tackling this critical issue.
Kevin Hollinrake (Thirsk and Malton) (Con)
Air quality in Malton and Norton is often at dangerous levels. Will the Minister join me in urging North Yorkshire County Council to develop and implement a clear strategy to deal with this problem?
Dr Coffey
I agree with my hon. Friend. Local councils know their communities best and can come up with good schemes where they work with local home and business owners. Of course, the national Government have their part to play; we have published our air quality plan and are updating our modelling, but local action with the help of a proactive local MP is good news for constituents.
Geraint Davies (Swansea West) (Lab/Co-op)
The Minister talked about nuts and sledgehammers and there being no need for a comprehensive plan, but does she not agree that she needs a proper fiscal strategy to incentivise consumers and producers so that we have a sustainable future, with an infrastructure of hydrogen and electric and a commitment to EU air quality standards, yet she has given us none of those things?
Dr Coffey
I said earlier that leaving the EU has nothing to do with improving air quality, and I stand by that.
May I clarify something that I said earlier? We have done the analysis on the scrappage schemes. Having just one particular kind of scheme where any diesel car can be replaced would not be the best use of taxpayers’ money because it is not a targeted intervention. I want to be smart about this and use taxpayers’ money effectively so that we can tackle this issue, not just have a comprehensive scrappage scheme which will not help as much.
Jeremy Quin (Horsham) (Con)
What role can the Government play in pushing the EU to improve the driving emissions test further?
Dr Coffey
I am not going to pretend I am the Department for Transport expert on this matter, but I know that we have been pushing for the last five years to get the real driving conditions actions updated. More is coming out next year, in 2017. We should be seeing action right across the EU, and I am looking forward to that. We will start to see whether those measures have really made a difference in 2019, because it will take a bit of time to bed in, but I can assure my hon. Friend that although we will be leaving the EU, we will continue to make sure that our air quality improves.
Kerry McCarthy (Bristol East) (Lab)
A Sunday Times investigation last year revealed that 3,000 schools were in areas affected by toxic air pollution, and we know that childhood asthma is massively on the increase. What are the Government doing specifically to ensure that schoolchildren are protected from air pollution?
Dr Coffey
Schools are in local council areas. [Interruption.] I am not blaming local councils; I am trying to say that local councils know how best to work with their local communities in order to make a difference. The hon. Lady will know of various schemes—I am sure they happen in Bristol—such as walking to school. There are powers that councils have today that we encourage them to use; we are encouraging them to apply for the air quality grant fund. That is the kind of proactive action our local councils can take now to make a difference for children.
Several hon. Members rose—
Mr Speaker
Order. I gently remind colleagues that the business statement will follow these exchanges and after that there are two further ministerial statements before we reach the first of the two debates to take place under the auspices of the Backbench Business Committee. Therefore there is a premium upon time, necessitating brevity from Back and Front Benches alike, now to be brilliantly exemplified, I am certain, by Mr Jason McCartney.
Jason McCartney (Colne Valley) (Con)
Labour-run Kirklees Council keeps forcing through huge housing developments on greenfield sites in my constituency, especially around Lindley, with scant regard for the impact on air quality. Can we please put air quality at the forefront of planning reforms, and can we have a clean air zone in Huddersfield?
Mr Speaker
By the way, there will also be up to 20 minutes on the Select Committee statement, which merely serves to underscore the force of what I have just said.
Dr Coffey
Thank you, Mr Speaker. In answer to my hon. Friend, I will need to check this—and I might need to write to him—but I think there is already guidance in the national planning framework to ensure that councils are mindful of the impact on air quality and other environmental matters when they consider planning applications.
Mr Clive Betts (Sheffield South East) (Lab)
The M1 motorway runs right next to the Tinsley area of my constituency, and NO2 levels there are so dangerously high that Sheffield Council has acted to move two local schools away from the motorway and rebuild a school elsewhere. In the end, however, the council can only do so much, and it cannot prevent pollution from the M1. That needs a national plan from the Government to reduce NO2 emissions from diesel vehicles. When are we going to get one?
Dr Coffey
One of the actions that the joint air quality unit is taking is to work up plans for the strategic road network, and that work is still under way. As I have said, our modelling was based on the best available evidence. A consequence of updating the modelling might be that more areas will come into it, but the strategic road network, including the M1, is on our agenda.
Oliver Colvile (Plymouth, Sutton and Devonport) (Con)
According to the World Health Organisation, Plymouth has been named as one of the worst cities in the UK for air quality, along with Saltash in the constituency of my hon. Friend the Member for South East Cornwall (Mrs Murray). There is an 11-year difference in life expectancy between the north-east of my constituency and the south-west. Would my hon. Friend be willing to meet members of my council to discuss how we can make significant improvements?
Dr Coffey
I am sure that I will make it to the south-west at some point, and hopefully not because of flooding this year. It is always a great pleasure to visit that part of the world. Poor air quality is one of the factors that contributes to early deaths, and I hope that we can work closely with our councils to ensure that we have local solutions that deliver local results.
Mrs Madeleine Moon (Bridgend) (Lab)
I feel some sympathy for the Minister, who is having to deal with this issue today, because the problem lies with the Treasury rather than with her Department. I have to say, however, that it is a little rich to place this responsibility on local authorities when they are already so cash-starved and struggling to provide education and social care services. Is it not time for the Treasury to stand up and tackle this issue by providing the funds that are so desperately needed?
Dr Coffey
The Treasury has already created incentives to encourage people to move towards lower emission vehicles. I really want to work with local councils to make a difference locally—it does matter—and they can apply to the air quality fund. I do not know the situation in Wales; that will be a matter for the Welsh Assembly Government to tackle.
Andrew Selous (South West Bedfordshire) (Con)
May I urge the Department for Environment, Food and Rural Affairs to liaise very carefully with the Department for Transport and the Treasury in the 20 days before the autumn statement to ensure that we get some good news on 23 November? Will the Minister also remember that the reason many people drive older diesel vehicles is that they are on lower incomes and those vehicles are their means of getting to work? We need to bear that in mind when we take action.
Dr Coffey
I recognise what my hon. Friend is saying. The miles-per-gallon rate is much better in diesel cars, and that is a reason to drive them in rural areas where petrol and diesel prices tend to be higher than in cities. We want to ensure that our interventions are targeted to have the best impact. I can assure my hon. Friend that I am not shy about discussing these matters, either with the Department for Transport or with the Treasury.
Thangam Debbonaire (Bristol West) (Lab)
In my constituency, there are four primary schools within 100 yards of the M32 motorway, and another that is bang in the middle of the city. It is not enough for the Government to blame local councils. Will the Minister meet me, the other Bristol MPs and the Mayor of Bristol, Marvin Rees, to discuss exactly what funding she will be providing to tackle this problem?
Dr Coffey
I am not blaming anyone. I have already set out that it is good for local councils to work with local communities on some of these solutions. The Government also need to do their bit, and I referred to the work on the strategic road network. There is a fund out there. Councils already know about it and I encourage them to use it. I would be happy for the hon. Lady to come and meet me to discuss the matter.
Rebecca Pow (Taunton Deane) (Con)
While I applaud the Government’s commitment to introduce clean air zones in five of our big cities, may I urge Ministers to consider introducing them more quickly, because the deadline is 2020, and in more cities and towns? Will the zones be tailor-made and specific to individual needs, such as the A358 in my constituency? Can we also have lots of trees to help as well?
Dr Coffey
The Government are committed to this and are on track to plant 11 million trees over the lifetime of this Parliament. I hope that the Mayor of London keeps to his commitment to plant 2 million trees in London. Some powers already exist, and the consultation on the clean air zone framework is out there. The difference is that we are now mandating five cities to implement clear air zones. I recently visited Derby to sit down with the council leader and go through what is being considered. I assure the House that I will keep encouraging local councils to take action.
Paul Flynn (Newport West) (Lab)
There are two possible routes for the M4 relief road in south Wales. One, the blue route, would concentrate and increase pollution in the heavily populated heart of Newport, where air pollution accounts for 70 deaths a year. The other scheme would disperse pollution over a wider, less-inhabited area. Will the Minister assure me that she will give her wholehearted support to the black route in order to reduce pollution?
Mr David Nuttall (Bury North) (Con)
Does my hon. Friend agree that the best way to improve air quality is through innovation and new technology, not through regulation and more taxes?
Dr Coffey
My hon. Friend is right that we must pull on a number of levers. We should be proud of the innovations that we have undertaken, particularly in the development of low emission vehicles. However, we must be serious when addressing this issue. We are working up targeted interventions that I genuinely hope will mean that in a few years we will be celebrating the fact that air quality is improving for everyone whom we represent.
Tom Brake (Carshalton and Wallington) (LD)
The Liberal Democrats have opposed a third runway at Heathrow for 20 years, but the Government are ploughing ahead. What action will the Minister take now to improve the appalling air quality around Heathrow? Will she ensure that the third runway will not be built unless air pollution can be contained within the legal limits?
Dr Coffey
In answer to my hon. Friend the Member for Twickenham (Dr Mathias), I set out that the Government believe that the runway at Heathrow can be delivered without impacting on the UK’s compliance on air quality. The Secretary of State for Transport was at the Dispatch Box on 25 October and talked about the Department for Transport, DEFRA and the Treasury embarking on a joint project
“to identify further ways in which we can tackle the issue.”
He continued:
“By the time a new runway opens in the next decade, we intend to have made substantial progress on tackling such air quality challenges”
not only around Heathrow, but
“across our nation as a whole.”—[Official Report, 25 October 2016; Vol. 616, c. 164.]
Chris Davies (Brecon and Radnorshire) (Con)
In a few hours’ time, I will be returning to my seat of Brecon and Radnorshire, where the air is clear and fresh. I recommend a visit to every hon. Member to replenish their lungs. However, I come to this great city for four days a week. What difference does the Minister think that hydrogen and electric vehicles will have on emissions in cities such as this and across Great Britain?
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
I have great sympathy for the Minister this morning because we are all responsible for the mess we are in, and I say that as chairman of my party’s Back-Bench DEFRA committee. Does the Minister realise that the public are far ahead of us on this issue? No one in their right mind would now buy a diesel car. The fact of the matter is that we need a scrappage scheme to get these filthy, belching diesel buses and cars out of our towns and cities. We are choking and poisoning children. That is why we need action now.
Dr Coffey
I ask that because I am really pleased that so many Members in the House today are concerned about this issue, and I hope that we can all become champions on it with our local councils. I am happy to be held to account on this, but we must work together to make sure that we make the difference.
Mr Speaker
It is a very good headline: “Minister wants more questions”. The hon. Lady is setting a splendid precedent.
Tom Pursglove (Corby) (Con)
I am very happy to oblige the Minister on that. Does she agree that supporting British industries wherever possible, rather than importing cheap, poorly produced products from elsewhere, is good not only for jobs, but for air quality in this country?
Dr Coffey
As I have just been reminded, Nissan will continue to manufacture cars in this country; we have Toyota in Derbyshire, in the constituency of my hon. Friend the Member for South Derbyshire (Heather Wheeler); and we are already leading the way on ultra-low emission vehicles. Long may that continue.
Joan Ryan (Enfield North) (Lab)
My constituency and the borough of Enfield are bound by the M25, the A10 and the north circular A406, so we have much more than our fair share of dirty diesels powering down our roads. Some of our roads, such as Bullsmoor Lane, are practically an extension of the M25. I do not think my constituents are going to feel reassured by what they have heard today; there has been no specific plan and no money identified from the Treasury. We have had nothing to stop the fact that we have kiddies in pushchairs sucking in this poisonous NOx.
Dr Coffey
I have outlined the fact that the Treasury has already provided incentives to make some changes and that we are looking at the strategic road network. We have to do this on the basis of the best available evidence. We are updating our modelling, and I hope that we will be able to help Enfield Council in due course.
Jim Shannon (Strangford) (DUP)
Does the Minister accept not only that steps need to be taken, but that a knee-jerk reaction is not needed? We need action that does not adversely affect industry and our economy, but that encourages a reduction in pollution.
Dr Coffey
The hon. Gentleman makes a fair point, but we do have to have a sense of urgency on this issue, and I am absolutely committed to prioritising it. It is a top priority for me and the Secretary of State. I will echo what the Prime Minister said:
“We have taken action, but there is more to do and we will do it.”—[Official Report, 2 November 2016; Vol. 616, c. 887.]
Business of the House
(8 years, 1 month 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 7 November—A general debate on exiting the EU and workers’ rights.
Tuesday 8 November—A debate on a motion on the role of grammar and faith schools, followed by a general debate on raising awareness of a new generation of veterans and service personnel. The subjects for both these debates were determined by the Backbench Business Committee.
The provisional business for the week commencing 14 November will include:
Monday 14 November—Second Reading of the Technical and Further Education Bill.
Tuesday 15 November—Consideration of a Lords message relating to the Investigatory Powers Bill, followed by remaining stages of the Small Charitable Donations and Childcare Payments Bill.
Wednesday 16 November—Opposition day (12th allotted day). There will be a debate on an Opposition motion. Subject to be announced.
Thursday 17 November—A debate on a motion on reductions to employment and support allowance and universal credit, followed by a general debate on International Men’s Day. The subjects for these debates were determined by the Backbench Business Committee.
Friday 18 November—Private Members’ Bills.
I should also like to inform the House that the business in Westminster Hall for 14 and 17 November will be:
Monday 14 November—Debate on an e-petition relating to the status of police dogs and horses.
Thursday 17 November—General debate on the future of the Post Office.
It may be for the convenience of the House if I make a few comments following this morning’s High Court judgment. It is a lengthy and complex judgment, which my right hon. and learned Friend the Attorney General is currently studying. I can confirm to the House that it is the Government’s intention to appeal against today’s High Court judgment. As the House is aware, we are now in a situation in which we have this judgment today and, from a little while ago, a judgment from the High Court of Northern Ireland, which came to a completely different decision on the same subject. We now have the High Courts in two different parts of the United Kingdom coming to opposite conclusions about the same constitutional legal question. This will now need to go to a higher court. In the light of the two judgments, the Government intend to offer an oral statement next Monday so that, subject to the usual requirements on sub judice, Ministers can be questioned by Members from all parts of the House.
Valerie Vaz
May I just say that it was the Master of the Rolls and the Lord Chief Justice who handed down that judgment?
Business questions are proving to be very successful in many areas. Not only was Marmite returned to the shelves on the same day that it was raised here, but now Bob Dylan has contacted the Nobel Committee.
We still do not have a negotiating position on exiting the European Union. We had a glimpse of it—not in Parliament, but on the “The Andrew Marr Show”—the day before a statement to the House. The Secretary of State for Business, Energy and Industrial Strategy admitted that he had given assurances to a company that there will be continued access to markets in Europe, and vice versa. So, not a complete hard exit then, which reflects the Prime Minister’s comments to City bankers that she is worried about the effect of Brexit on the British economy.
A recent report by Professor Menon of King’s College said that cuts to personnel over the past few years have left the civil service depleted and with little expertise. Where do we get the expertise from? It is Europe, which is why we need a debate on the Government’s negotiating position. If the Government are going to provide letters of comfort, as the Secretary of State said, sector by sector, the British people would also like a letter of comfort. Sadly for us and for you, Mr Speaker, if the British people want to know what is going on and what the Government are thinking, they have to watch “The Andrew Marr Show”.
Mr Speaker, you will recall the words:
“You turn if you want to. The lady’s not for turning”,
but this Government seem to be turning again. In a written statement, the Education Secretary said last week that there will be no changes to education legislation in this parliamentary Session, which will run until next summer. Will the Leader of the House confirm that that is correct? Does that mean no forced academies, no education Bill and parents back on governing bodies? Will he please be explicit? If that is not enough, the legacy of the beleaguered Education Secretary at the Department for International Development has been trashed by her successor, who says that there will be a greater focus on trade and that she will “call out” foreign aid organisations using British money. The Government are in disarray and speak with forked tongues.
I recall the former International Development Secretary telling the House that she had undertaken an audit of all aid donations, and that the Department’s website clearly states where the money has gone. You know, Mr Speaker, because you sat on the International Development Committee, that aid is about supporting fledgling democracies. It is about what we saw in Burma—children going to school, fighting disease, and supporting the rule of law so that people will want to stay in their country. Our own Clerks, Library staff and others, under your leadership, Mr Speaker, go to places such as Burma as they enter into peace. They help to build capacity, expertise and confidence, and out of that comes growth. May we have a debate on the Government’s policy on aid and whether the 0.7% of GDP for aid, which was voted for by this House, is protected?
This week, all of us will take part in Remembrance Day services. We will hear the Kohima epitaph:
“When you go home,
tell them of us and say,
for their tomorrow,
we gave our today.”
That is why we remember them. The Royal British Legion wants us to rethink Remembrance to include today’s generation who have died serving their country. My hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty) has secured a debate next week to draw attention to that call. May I ask the Leader of the House to ensure that, across the parliamentary Estate, we take up the call to rethink Remembrance?
Those who served fought for future generations, and future generations will be here next week when we welcome the Youth Parliament on 11 November. Its sitting will involve more than 300 young people between the ages of 12 and 18 from throughout our United Kingdom. We can learn from them how to focus on debates.
Will the Leader of the House join me in sending a message to Bob: “If you don’t want the Nobel peace prize money, could you donate it to the White Helmets of Syria?”? That charity did not win the Nobel peace prize and was the beloved charity of our beloved colleague Jo Cox, who would have been delighted by the maiden speech of my hon. Friend the Member for Batley and Spen (Tracy Brabin) yesterday.
Finally, we look forward to the result of the United States presidential election. Faced with a scary clown and the possibility of the first woman President of the United States, I think I know who I would vote for. I am sure the whole House will join me in wishing President Obama and his family all the best for the future.
Mr Lidington
I straightaway join the shadow Leader of the House in expressing best wishes to President Obama, who has shown himself to be a firm friend of the United Kingdom, and of efforts to bring about peace and stability in conflict-torn parts of the world. We wish him and his family well.
I, too, congratulate the hon. Member for Batley and Spen (Tracy Brabin) on her maiden speech and welcome her from the Dispatch Box. We look forward to her playing an active part in our proceedings in the months and years to come.
Like the hon. Member for Walsall South (Valerie Vaz), I am looking forward very much to the Youth Parliament coming here on 11 November. As you and I discussed earlier this week, Mr Speaker, we are both going to play a small role in the opening of those proceedings. It is really good to see young men and women who are enthusiastic about and committed to the democratic parliamentary process. I hope they will go away from their experience on 11 November wanting to be ambassadors for the strengths of parliamentary debate and parliamentary democracy in their communities around the country.
I am certainly aware of the wish of the Royal British Legion and other armed forces charities to ensure that, while we rightly continue to honour the sacrifice of those who served in the world wars, without whom we would not have the freedoms that we can so easily take for granted today, we should also have in mind those who have served in more recent conflicts, and the work that the charities do to provide help and support to servicemen and women who suffer mental and physical injury as a consequence of that service, and their families. All of us should be working with local branches of the Royal British Legion, other service charities and the services themselves to ensure that this message, as well as the sacrifice and the continuing service of our armed forces, is understood by the wider community and across the generations. We should be as proud of those who have served more recently in Northern Ireland, the Gulf, Iraq and Afghanistan as we are of those who served in previous generations.
On the more political elements of the hon. Lady’s remarks, I was surprised by what she said about aid and international development. The Government could not have been clearer about our commitment to the 0.7% development spending, as we have demonstrated, not least by writing it into law. The very work to help to build democracy and good governance that she talked about, through organisations such as the Westminster Foundation for Democracy, is part of that 0.7%, and the criteria for our aid spending are laid down by the International Development (Official Development Assistance Target) Act 2015. There are clear guidelines and rules that govern how aid money should be spent, so I think that the hon. Lady is trying to set up some kind of Aunt Sally. There ought to be agreement across the House about our wanting an ambitious development programme, but also one in which we are rigorous in measuring the value for money of our aid and look carefully at the outcomes to make sure that that money—taxpayers’ money, don’t forget—is going to people who are in desperate need and is making a difference for good to their lives.
On education policy, I do not know whether the hon. Lady was on holiday when my right hon. Friend the Education Secretary recently launched a Green Paper and major consultation exercise on education reform. While we are taking forward our proposed work on further education and technical education, as I have announced, we think that it is right to look at broader school policies in the light of the consultation responses that we will get. My right hon. Friend will be coming forward in due course with a considered approach, taking in the ideas set out in the recent Green Paper.
Finally, when it comes to Europe and European exit, I have just announced that there will be a debate next Monday on one aspect—
Mr Lidington
No, it is a full day’s debate in Government time on the UK’s exit from the European Union and workers’ rights, and it is but the first of a series of such debates that will provide ample opportunity for Members of Parliament from all parties to express their views clearly. I will just say this to the hon. Lady: if she really thinks that it is sensible for the Government to set out in public a detailed negotiating position ahead of a negotiation with 20 other countries, I would love to be negotiating on the other side of the table from her.
Mr Kenneth Clarke (Rushcliffe) (Con)
I realise that the Government are trying to maintain their efforts to stop the House from having a vote on article 50, but can my right hon. Friend reassure me that he is not trying to assert that the Government regard themselves as not accountable to a vote in Parliament on their general policies on our political, economic and trade relationships with the European Union for the duration of the negotiations, which will no doubt take several years?
As my right hon. Friend is apparently offering a large number of fairly innocuous debates on broad-brush motions taking note of various European subjects, is he aware that, as a result of the number of Members who will wish to speak, many Back Benchers will unfortunately find that, as things stand, they have only three minutes in which to give a detailed explanation of their views on any subject? As the Whips will have nothing to fear from such debates, will he consider inviting the House to suspend the usual time rules so that we can have some more open-ended debates? Otherwise, the Government will try to dismiss the whole thing with a series of rather farcically constricted exchanges of views.
Mr Lidington
I am somewhat surprised that my right hon. and learned Friend appears to have an appetite for the kind of all-night sittings that he and I went through on the Maastricht Bill some 25 years ago. I do not think that that would be the right way to have a mature debate and to reflect public interest in these various European issues. I am sure that the House will have plenty of opportunities—not just in Government time, but in many others ways—to debate all aspects of our forthcoming negotiation, but the fundamental principle is that this House voted overwhelmingly to give the British people the final say when it voted through the referendum Bill earlier this year, and we need to accept and respect the consequences of that decision.
Several hon. Members rose—
Mr Speaker
Order. The House will decide its sitting hours—that is a matter for colleagues—pursuant to what the right hon. and learned Member for Rushcliffe (Mr Clarke) has said. I simply underline the point that I am a servant of the House, and whatever hours the House wants to sit to debate important matters, I am very happy to be in the Chair.
Pete Wishart (Perth and North Perthshire) (SNP)
I thank the Leader of the House for announcing the business for next week. His response thus far to the High Court ruling simply is not good enough. This is an important, significant ruling, which suggests that this House is sovereign on these matters. As a leader of this House, not just of this Government, he should respect that. What plans does he therefore have to bring an early vote on these matters to the House? It is little wonder that the Foreign Secretary compared this process to the Titanic, because what we have is a stricken, doomed liner going to the bottom of the ocean, taking its captain with it. Well, we in Scotland are preparing our lifeboat to get out of this, because there is no way we are going to the deeps with this stricken Government.
May we have a debate on animal welfare? The nation is simply gripped by the story of Kim the Alsatian, and how the poor dog came to meet her ultimate maker. Lord Heseltine, of course, claims he did not strangle that dog, but it would not be the first time he had tried to dispatch a frothing-at-the-mouth but much-loved family member for the betterment of this nation.
Looking at the business, what meagre business we have. It is full of general debates and Backbench Business debates. I am glad that we have some time for the hon. Member for Gateshead (Ian Mearns), but there is no legislation, save one piece programmed for a week on Monday. It took the last Parliament four years to acquire the moniker of the zombie Parliament; it looks like this Leader of the House is trying to achieve that in less than two years.
Mr Lidington
The hon. Gentleman is trying to work himself up into a sense of rage that, I am afraid, I find wholly synthetic. The judgment today is some 30 or 40 pages in length. The idea that I would come to the House within an hour of that judgment being read out in court and be able to provide the sort of detailed analysis and responses to questions that the hon. Gentleman seeks is, quite frankly, wrong-headed. That is why the Government are offering the oral statement when my right hon. and learned Friends have had the opportunity to look at the judgment in detail so that we can respond as best we can, given the sub judice rule, to the questions from hon. Members on both sides of the House.
When it comes to the business before the House, I am afraid that the hon. Gentleman is not correct. I did say that we have legislation on both Monday 14 and Tuesday 15 November. I am asked all the time in these sessions for debates on European matters. The Government are now offering, in Government time, a debate on European matters—on workers’ rights, which is something the Scottish National party professes to care about a great deal. Now the hon. Gentleman argues that, instead of that, we should have Government legislation. I think he needs to make up his mind where his priorities really lie.
Dr Julian Lewis (New Forest East) (Con)
I was going, yet again, to raise the question of BBC monitoring in Caversham, and the determination of the Defence Committee to get a Minister responsible before us, but I will let the Leader of the House off this week on that topic. Will he instead make a statement about the holding by Russia of 31 Ukrainian prisoners, half of whom are having their Ukrainian nationality denied by the Russians because they come from that part of the Ukraine that is now occupied by Russia? I believe he met Nadiya Savchenko, the courageous army pilot whom the Russians took prisoner and sentenced to 22 years in jail until a campaign successfully got her released. A statement from the Government on the way in which Russia could perhaps do something to improve relations between east and west by releasing those prisoners would, indeed, be welcome.
Mr Lidington
I have a great deal of sympathy for what my right hon. Friend said. I did, indeed, meet Nadiya Savchenko yesterday, and I said to her that it was really good to see her a free woman, but also to be able to meet her in a free and democratic Parliament. I just wish that those conditions pertained in Russia as well. The approach that the Russian authorities have been taking in detaining Ukrainian citizens and holding them as political prisoners is but one manifestation of the increasingly ruthless and authoritarian approach taken by the Kremlin. My right hon. Friend the Foreign Secretary has been very plain in his condemnation of the Russian Government’s approach, and the British Government will continue to urge Russia through all diplomatic channels to change its approach, and will continue to support international sanctions, including European sanctions, against Russia so long as it continues to occupy Crimea and to interfere in the Donbass.
Ian Mearns (Gateshead) (Lab)
The Leader of the House has announced Back-Bench business for up to and including 17 November, including two debates next Tuesday. We are grateful to get debates on a Tuesday, even though it is the last day before the recess. We have two important Back-Bench debates this afternoon, but you have granted an urgent question, Mr Speaker, and two Government statements will also eat into our time. Will the Leader of the House consider finding protected time on days other than Thursdays, so that Back-Bench business is not eaten into by Government statements?
Last Saturday, I was privileged to attend the official opening of the north-east of England garden of remembrance in Saltwell Park, which is in the heart of my constituency of Gateshead. May I pay tribute to the Royal British Legion, the volunteers and the staff and members of Gateshead Council, who provide a wonderful, serene space in the town centre municipal park, for a magnificent display of commemoration for the fallen?
Mr Lidington
I am happy to join the hon. Gentleman in his salute both to the Royal British Legion in Gateshead and to the work done by Gateshead Council.
We will always do our best to ensure that there is no unnecessary intrusion of statements on Back-Bench business time, but there are always contending pressures for limited parliamentary hours. Just as Government business sometimes gets curtailed because of the need for time for statements or urgent questions, that applies to Back-Bench business as well. We will try to be as helpful as we can to the hon. Gentleman and his Committee.
Sir William Cash (Stone) (Con)
The Government have rightly decided to appeal to the Supreme Court. Does my right hon. Friend appreciate that the vote to leave the European Union was fundamentally based on a sovereign Act of Parliament that expressly transferred the decision from Parliament to the voters of the United Kingdom as a whole?
Mr Lidington
As I recall, during the debates on the European Union Referendum Bill, hon. Members on both sides of the House agreed and said in their speeches that that was the political consequence of enacting it. The Court has come to its judgment and we will make a further statement on Monday, after the Attorney General has had the chance to look at it in detail.
Tracy Brabin (Batley and Spen) (Lab)
May we have a debate on the increase in the use of food banks? During my recent campaign, I met the manager of Batley food bank, who is increasingly concerned about the upcoming winter months, as hard-working people and families left behind by this Government are forced to make the really difficult decision between heating their homes and putting food on the table.
Mr Lidington
One of the differences between this Government and the Labour Government who preceded them is that this Government have made a conscious decision to signpost people who might be in need to food banks as a possible source of support; whereas under Labour, staff working for the Department for Work and Pensions were expressly discouraged and forbidden from doing so. Despite that, there was a tenfold increase in the use of food banks under the last Labour Government. I would have hoped that the hon. Lady would have welcomed the fact that a record number of people are in work in this country, and that all the indicators of inequality, including those that the Labour party has historically supported and championed, show that inequality has fallen compared with its level under the Labour Government.
Several hon. Members rose—
Mr Speaker
Order. Given the pressure on time, to which I referred earlier, I should now appreciate single, short supplementary questions.
Sir Edward Garnier (Harborough) (Con)
I welcome the announcement by the Leader of the House that there is to be a debate on the European Union and workers’ rights next week. Could he also provide an opportunity for the House to debate the rights of this House, because without our supporting our own rights, there are no rights for workers? The Court this morning reinforced the importance of parliamentary sovereignty. Will my right hon. Friend make it abundantly clear that this House believes in its own powers and privileges; that they should be sustained; and that we should not enter into the farce that we entered into last Monday, when Parliament made a mistake in relation to Select Committees? [Interruption.]
Mr Speaker
It is being chuntered from a sedentary position that the right hon. and learned Gentleman is a lawyer. He is indeed a very distinguished lawyer, but I fear that we will have to wait for the next question to get a brief one.
Mr Speaker
The right hon. and learned Gentleman is also a Member of Parliament, and we have heard him with great courtesy and, indeed, a degree of charity.
Mr Lidington
As recently as last week, we had a debate on a report from the Privileges Committee during which Members from all parts of the House spoke up for the rights, powers and authority of this House of Commons. The particular issues arising from this morning’s High Court judgment are precisely the ones about which Members will have an opportunity to ask questions on Monday.
Alex Cunningham (Stockton North) (Lab)
Bonfire night is almost upon us, and I really worry about the fire and rescue service in Cleveland—one of the highest fire-risk areas in Europe—where we have lost more than a quarter of our front-line staff since 2010. Firefighters are at breaking point and worried that their ability to save lives is compromised. May we have a debate on the funding of fire and rescue services, and will the Leader of the House encourage the Fire Minister to visit Cleveland at my invitation to understand what is happening there?
Mr Lidington
I will certainly alert my right hon. Friend the Fire Minister to the invitation and to the welcome that he will undoubtedly receive in Cleveland from the hon. Gentleman. The issue of fire safety as we approach fireworks night is always about trying to get the right balance between families’ individual freedom to buy fireworks, to have bonfires and to celebrate; and our need to provide for their safety. That freedom-versus-security debate is so relevant here, as it is in other aspects of public policy.
The good news is that the trend in admissions to hospital A&E departments because of accidents on fireworks night is downwards. That suggests to me that individuals and local authorities are much more aware of the safety advice that the Government and local councils have promulgated, and that they are taking appropriate action.
Jeremy Lefroy (Stafford) (Con)
President Kabila of the Democratic Republic of Congo is due to step down on 19 December. He will not do so, and he has not even arranged for the elections to replace him. May we have an urgent debate on the matter? There is great risk of substantial violence occurring on and after 19 December at a time when everybody will be off for Christmas and the United States will have an interregnum.
Mr Lidington
It is important that those elections in the Democratic Republic of Congo take place as soon as possible. That is in the interests of the stability of that country and the wellbeing of its people, so many of whom have to live lives of the most dreadful poverty and still fall prey to endemic violence within the DRC. The Government are using all diplomatic means available to try to ensure that those elections take place. The Under-Secretary of State for Foreign and Commonwealth Affairs, my hon. Friend the Member for Bournemouth East (Mr Ellwood), the Minister with responsibility for Africa, issued a statement to that effect very recently.
Alan Brown (Kilmarnock and Loudoun) (SNP)
Will the Leader of the House make a statement explaining why the Government can give a £4.6 billion loan guarantee to Thames Water but will not provide loan guarantees to the oil and gas industry?
Mr Lidington
As the Prime Minister said yesterday, the Government provide a range of measures through the tax system that help to support oil and gas businesses in the United Kingdom. There is also the economic reality that the global price for hydrocarbons has fallen very sharply in recent years, and it is never possible to insulate any industry completely from that kind of movement.
Mr Peter Bone (Wellingborough) (Con)
May I agree with my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) on the need for an open-ended debate on Europe? As normal on Europe, Ken and I are as one. For brevity’s sake, would it help the Leader of the House if he just said yes?
Mr Lidington
Learning of this historic pact, my heart skips. Although the Government have pledged that there will be a series of debates on different aspects of the forthcoming EU negotiation, I fear we shall never be able to grant enough of them to satisfy my hon. Friend.
Kevin Barron (Rother Valley) (Lab)
Will the Leader of the House arrange a debate on the re-routing of HS2 in south Yorkshire? The new route will decimate communities throughout the region and provide none of the advantages first associated with the Meadowhall station, which was going to be a catalyst for growth in the south Yorkshire economy.
Mr Lidington
I will certainly report to my right hon. Friend the Transport Secretary the concerns that the right hon. Gentleman has expressed on behalf of his constituents. As he will know, that phase of the HS2 route has not yet been published in the form of a Bill. I am sure he will continue to make very strong representations to HS2 Ltd and the Department for Transport asking them to look again at the plans in the light of his constituents’ concerns.
Alistair Burt (North East Bedfordshire) (Con)
As one who campaigned against leaving the European Union, I give my right hon. Friend the assurance that I would vote for triggering article 50 if given the chance. I welcome the fact that there will be a statement on Monday, but does he accept that the Government’s tone need not be one of disappointment? It should be one of welcoming the operation of the British rule of law, which I thought the referendum was partly about. It is not a decision to be afraid of, even if the Government wish to appeal.
Mr Lidington
We certainly pride ourselves, rightly, on being a country that lives by the rule of law. The case in question involves some very important constitutional matters concerning the respective powers of the Executive, Parliament and, indeed, the courts themselves, so it is right and inevitable that this will end up in front of the Supreme Court. My right hon. Friend, like other hon. Members, will have an opportunity to make such points again on Monday.
Mike Gapes (Ilford South) (Lab/Co-op)
The High Court has ruled that the
“government does not have power”
to trigger article 50. May we therefore have a debate to celebrate taking back control and parliamentary democracy, and to argue that Parliament should determine when article 50 is triggered on the basis of full consideration of the implications of the advisory referendum?
Mr Lidington
The hon. Gentleman has aired his view. I cannot recollect at the moment whether he voted for or against the European Union Referendum Bill when it came before Parliament. I suspect that he did not vote against it at the time, which might make his call for a celebration now seem slightly odd. As I have said, this is a matter about which hon. Members can question Ministers on Monday, and we shall then have to await the appeal hearing.
Mark Pawsey (Rugby) (Con)
Thanks to the hard work of volunteers and Rugby Borough Council’s parks department, under the leadership of Chris Worman, my constituency won a prestigious gold award at the recent Britain in Bloom awards. We are hoping for further success when Caldecott Park is nominated for the UK’s Best Park awards. May we have a debate about the importance of our green open spaces?
Mr Lidington
I am delighted to congratulate Mr Worman and his team on the achievement that my hon. Friend mentioned. I hope that my hon. Friend will have the opportunity, perhaps through an Adjournment debate, to draw the House’s attention further to this matter, as well as to point out how the Government’s policy on neighbourhood planning will give local people a greater say in the future of their precious parks.
Paula Sherriff (Dewsbury) (Lab)
My constituency is wonderfully diverse, so I was saddened this morning to read a very misrepresentative newspaper article about an area in my constituency, in which the journalist appears to do nothing but stir up racial hatred. Such articles serve no purpose. May we have a debate to discuss the role the media appear to be playing in creating racial tension?
Mr Lidington
I am obviously not aware of the details of the particular case that the hon. Lady has described. In my experience, to promote good community relations requires commitment and steady hard work by members of different communities at local level in towns and in cities, right down to the level of individual estates and neighbourhoods. In my years in this place, I have seen members of all political parties getting stuck into that kind of work. As a result, if we look at opinion poll findings, we see that although there are problems—I am not going to pretend otherwise—for the most part this is a country where people feel at ease with their neighbours, whatever colour skin, whatever religion or whatever background those neighbours may have or have come from.
Sir Edward Leigh (Gainsborough) (Con)
My right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) and my right hon. Friend the Member for North East Bedfordshire (Alistair Burt) have a point. Irrespective of the court case, is a general debate on triggering article 50 good enough? Why should we fear a debate on a substantive motion? It would be a brave Member of Parliament who voted against the will of the people. When it comes to Brexit, the only thing to fear is fear itself—let’s get on with it.
Mr Lidington
As I said earlier, some important constitutional questions were raised by the case in the High Court, and by the court case in Northern Ireland last week. The Government are going to appeal against today’s High Court judgment. We shall see what the appeal brings.
Chris Elmore (Ogmore) (Lab/Co-op)
The 2013 Tomlinson report identified malpractice at the Royal Bank of Scotland, and a constituent of mine, Mr Alun Richards, believes he has been the victim of similar actions by the former Lloyds TSB group and its surveyors, Alder King. May we please have a debate on the conduct of the banking industry in the years that followed the financial crash?
Mr Lidington
If the hon. Gentleman’s constituent has been the victim of criminal malpractice on the part of a company or its employees, there are routes available with independent investigatory and prosecutorial authorities, and he should present his evidence to those. If the hon. Gentleman would care to write to me with the details of that constituency case, I shall pass them on to the Minister responsible.
Mr David Nuttall (Bury North) (Con)
May we please have a debate on the time taken to obtain Disclosure and Barring Service checks? A constituent has been waiting six weeks for a check, despite having had a previous check only in January of this year. These delays are stopping people working.
Mr Lidington
Delays of the kind that my hon. Friend mentions are deeply to be regretted. Not only are they inconvenient—to put it mildly—for the individuals concerned but they often mean that a school, hospital or social services department has to carry a vacancy or employ temporary staff for longer than necessary. The information I have is that over the past 12 months DBS checks that have taken longer than 60 days amount to less than 6% of the total number dispatched, but if he would like to let me have some details about the problems in his constituency I shall ensure that the relevant Minister at the Home Office is made aware of them.
Dr Rupa Huq (Ealing Central and Acton) (Lab)
The stabbing of a 14-year-old in Ealing made the front page of the Standard this week. It was the 68th one with a victim under 25 in our borough in 12 months, and there have been nearly 1,800 London-wide. May we have a Government statement on what is being done to get a grip on knife crime, to stop this becoming the new norm in the suburbs?
Mr Lidington
My right hon. Friends the Home Secretary and the Lord Chancellor are both very well aware of this challenge. Strong laws are in place against the carrying of knives in public places, but the real problem here is the gang culture that has grown up in parts of our cities. I know that the police and other criminal justice agencies make strenuous efforts to curb that gang culture. I do not think there is a single neat, easy answer to these questions. I hope that the hon. Lady will have the opportunity for further debate on the matter and also to put questions on it to the relevant Ministers.
Nick Herbert (Arundel and South Downs) (Con)
Since a majority of Members of this House would vote to trigger article 50 but want further reassurance about the terms of Brexit, may I suggest to my right hon. Friend that whatever the legal position it would be wise of the Government to allow a discussion and vote on the plan, before they find that, one way or the other, they are required to offer that?
Mr Lidington
There are important constitutional questions that need to be resolved definitively one way or the other, but I take careful note of what my right hon. Friend says on article 50.
Tom Brake (Carshalton and Wallington) (LD)
Will the Leader of the House make time available for a debate about the fate of Andy Tsege, with whom many Members of the House will be familiar, who is on death row in Ethiopia? There are concerns about his safety and the safety of the cell he is sharing, and there has been no consular access since August.
Mr Lidington
As the right hon. Gentleman knows, Foreign Office Ministers have made frequent representations to the Ethiopian authorities about Mr Tsege. I shall draw the right hon. Gentleman’s continuing concern to the attention of the Foreign Secretary at the earliest possible opportunity.
Martin Vickers (Cleethorpes) (Con)
The Leader of the House may have noted my ten-minute rule Bill on Tuesday on the admission to schools of children suffering from autism, which affects thousands of people up and down the country. Will he arrange for a statement outlining whether the Government are prepared to reconsider the current situation?
Mr Lidington
All hon. Members will be aware from our constituency work of some pretty dreadful cases in which parents of children who have various autistic spectrum disorders run into difficulties in accessing one or more of the statutory services. It is important that we have the best possible practice and the best awareness of autistic spectrum disorders in the education service and all other parts of the public service. Ministers are doing their utmost to encourage such understanding. My hon. Friend will have the opportunity to pursue that further in Education questions on Monday 14 November.
Paul Flynn (Newport West) (Lab)
What should be supreme: the single snapshot of public opinion taken on a single day in June, heavily influenced by racial scaremongering and the downright lie of extra billions for the health service; or the mature opinion of Parliament when the full titanic consequences of Brexit are known? The Government asserted on 30 September 2010 that all referendums are advisory. Will the Leader of the House stand up for the supremacy of Parliament, knowing that second thoughts are always better than first thoughts?
Mr Lidington
The Government, the former Prime Minister and the current Prime Minister have always been completely consistent. We have said that the referendum, while legally and constitutionally advisory, was something that we would regard as politically binding. That was also the view taken by the Opposition, and certainly Opposition Front Benchers, when the Bill was going through. I campaigned hard for the remain side, but I have to say that it takes us into very difficult and potentially dangerous territory if we lightly say that we set aside the results of an exercise in mass democracy that attracted a turnout on general election scale, and that had an outcome that, while close, was nevertheless decisive.
Graham Evans (Weaver Vale) (Con)
In the run-up to Halloween, I held an event with Sainsbury’s to raise awareness of the flame risk of children’s fancy dress outfits. Sainsbury’s has brought its fancy dress toys standards to the highest nightwear standards. Retailers should never compete on child safety matters. May we have a debate on that very important matter?
Mr Lidington
My hon. Friend raises a very important issue. Last year, following other concerns expressed in the House, the Government tasked trading standards with carrying out checks on a large number of such costumes, as a result of which various non-compliant products were withdrawn from sale by retailers. We are now in discussions with the British Standard Institution and the relevant European standards organisation to review, and if necessary revise, the fire safety regulations governing costumes. Of course, the advice to parents and anyone else buying or hiring such costumes must continue to be to check carefully the fire safety certification before they do so.
Geraint Davies (Swansea West) (Lab/Co-op)
My private Member’s Bill on sugar is published today. It requires the number of spoonfuls of sugar in processed foods and drinks to be put on the label. Given that a man like him is supposed to have only nine spoonfuls a day, the equivalent of one Coca-Cola, and a woman only six spoonfuls, the equivalent of one Müller Light, will the Leader of the House find time to debate obesity, sugar labelling and the impact on the NHS?
Mr Lidington
Obesity is certainly a real challenge for the NHS, because of its link to chronic conditions such as diabetes. That is precisely why the Government have launched the most ambitious childhood anti-obesity strategy that any Government in the United Kingdom have set in motion. The Government will take a view on the hon. Gentleman’s Bill if and when it is debated in the Chamber.
Oliver Colvile (Plymouth, Sutton and Devonport) (Con)
As my right hon. Friend may know, I have been campaigning to save the hedgehog. Bonfire night will be on Saturday. Does my right hon. Friend agree that people should check their bonfires before they are lit to make sure there are no hedgehogs lurking inside them?
Mr Lidington
My hon. Friend will merit some kind of Tiggywinkles award for his devotion to hedgehogs. He is right. If our constituents want further advice, they can consult the website of the British Hedgehog Preservation Society, where further tips are available.
Mr Speaker
Truly, the hon. Gentleman has established himself as a hedgehog fetishist.
Justin Madders (Ellesmere Port and Neston) (Lab)
My constituent David Greenway is currently struck in Iraq. His employer is an American company called Hannaford, which has not paid him or his accommodation costs for some time, with the result that his passport has been seized by his hotel, which will not release it until all arrears are paid. The embassy has intervened without success and I have written to the relevant Minister. May we have a debate on what more can be done to help British citizens left in this situation?
Mr Lidington
I am grateful to the hon. Gentleman for raising this case. He will understand that it is sometimes the right course of action to raise an individual case in public, and that with particular Governments it is better to try to go in slightly under the radar and make representations. I will make sure that Foreign Office Ministers are very alive to the case he describes. If he would like to let me have further details, that will help to speed things up.
Chris Davies (Brecon and Radnorshire) (Con)
Following the Welsh Assembly Government’s decision to cut the local government settlement for Powys County Council for the 10th year in a row, may we have a debate on whether the Welsh Government are taking their responsibility to serve the whole of Wales seriously, or whether they are interested only in looking after their Labour heartlands?
Mr Lidington
My hon. Friend makes a powerful point. It is very important that he and others who represent rural communities in Wales impress on the Welsh Assembly Government the need to try to have a Welsh Government that works for all. The evidence, sadly, is that there is not much of that commitment on the part of the Labour party in Cardiff.
Mr Speaker
I trust the hon. Member for Leeds North West (Greg Mulholland) will now impress us with a single sentence inquiry.
Greg Mulholland (Leeds North West) (LD)
At this time of year, when we remember those who died and their families, it is a national disgrace that there is a group of women who still do not receive any support from the state because after grief they again found love. May we have a debate on this injustice and an announcement from the Government that this will finally change?
Mr Lidington
The hon. Gentleman may have the chance to obtain an Adjournment debate on this subject, but I will make sure that the relevant Minister in the Department for Work and Pensions writes to him.
Prison Safety and Reform
(8 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Lord Chancellor and Secretary of State for Justice (Elizabeth Truss)
With permission, Mr Speaker, I would like to make a statement on the Government’s proposals for prison reform.
The prison system in England and Wales is under serious and sustained pressure. Rates of violence and self-harm have increased significantly over the past five years. In the 12 months to June 2016, there were nearly 6,000 assaults on staff and 105 self-inflicted deaths. Prison staff are responding to constantly evolving security threats, such as psychoactive drugs, mobile devices and drones. Too many prisoners are missing out on the chance to reform and too many are going on to reoffend when they leave prison. We owe it to our hard-working prison staff to reverse these trends. We owe it to prisoners and their families, and we owe it to our communities and victims of crime. The cost of reoffending by former prisoners to society is estimated to be £15 billion a year: £1.7 million every single hour of every single day, blighting thousands of lives.
In May, Her Majesty set out in the Gracious Speech that her Government would legislate to reform prisons, including increasing freedoms for governors, improving education opportunities for offenders and closing old and inefficient buildings. Today, I am publishing the Government’s plans for doing so. They represent a major overhaul of the system—the biggest for a generation.
Prisons punish by depriving people of their liberty. They must also reduce reoffending. My starting point is to refocus the system so that everyone is clear that safety and rehabilitation is the purpose of the prison system, setting this out for the first time ever in statute. Governors and staff cannot lead and manage change in an environment where they fear violence. Likewise, offenders cannot be expected to turn their lives around while they are dependent on drugs or in fear of being assaulted.
I will invest in 2,500 more prison officers across the prison estate. This includes the recruitment of 400 additional prison officers, which is already under way, in 10 of our most challenging prisons. Increasing the number of front-line staff will give prison officers more time to turn around the lives of offenders. Starting with 10 of the most challenging prisons, each and every offender will have a dedicated prison officer offering regular, one-to-one support. This one-to-one support model will be rolled out to every prison in England and Wales.
We will combine this new support for prisoners with a zero-tolerance approach to criminality in prison. I will send the clearest possible message that if anyone attacks our prison staff, we will treat it as a serious crime. We are rolling out body-worn cameras across the prison estate to give staff extra confidence, and we will work closely with other organisations, including the National Crime Agency and the police, to improve our intelligence-gathering function to tackle organised crime within the prison estate.
We will also take robust action to address emerging threats to prison security. We have rolled out new tests for psychoactive substances across the estate, and have trained 300 dogs to detect these new substances. We will work with industry to rid our prisons of the mobile phones that are driving up crime within the prison walls, as well as of the drones used to smuggle goods in.
Alongside investing in our staff, we will give governors the tools they need to drive forward improvements. We will push decision-making authority and budgets for the things that make a difference to offenders down to governors—whether it be education, family services or how prisons run their regime.
We are already seeing what greater authority can achieve in our six reform prisons. Launched in the summer, these trailblazers have allowed governors to reap the rewards of greater authority and empowerment in their prisons. Now we want the whole of the prison estate to benefit from greater devolution of powers to local level. In return for greater authority, we will hold governors to account for improvements. For the first time, we will publish national league tables every year, so the public can quickly see an illustration of how each prison is performing. This will include assessing the progress that offenders have made to improve their maths and English skills as well as getting into work.
The various inspection and scrutiny regimes—Her Majesty’s inspectorate of prisons, the prisons and probation ombudsman, and the independent monitoring boards—need to be strengthened. Their recommendations need to be taken seriously and responded to quickly. When failures happen, people want to see action taken. We will strengthen the role of Her Majesty’s inspectorate, adding to its remit so that in addition to its broad focus on the treatment of prisoners, it takes account of the extent to which prisons are achieving the statutory purpose. There will be a formal process for the inspectorate’s findings to act as a trigger for the Secretary of State to intervene in the worst cases.
Finally, reform simply cannot happen in decrepit jails. Some prisons are overcrowded and no longer fit for purpose. That is why I am investing £1.3 billion in a modern, fit-for-purpose estate. In addition to HMP Berwyn in Wales, which will open from February 2017, we will build new prisons for men and women and close those prisons that do not have a long-term future on the estate. This year, we will begin the process of submitting planning applications for new sites, starting with Wellingborough and Glen Parva. As the new accommodation is opened, we will start to close old accommodation. As part of this programme, we will not reopen Dover and Haslar as prisons. Over the next five years there will be a programme of closures, and I shall make a more detailed announcement about that shortly.
Over the course of this Parliament and beyond we will see tangible improvements in the condition of our prisons, and we will begin to see better results in what prisons are asked to achieve. I believe that over the coming years we can create a better system with pronounced and sustained improvements in results for offenders—improvements in their education, employment and health—so that those stubborn reoffending rates can come down, and fewer people will have to go through the terrifying ordeal of being a victim of crime. That will be the marker for whether these reforms have been a success.
This Government’s mission is to reform the way our public services work for the benefit of everyone in society. As Justice Secretary, I have made urgent reform of our prisons my No.1 priority in order to bring crime down in our communities and reduce harm for both prison staff and prisoners. That priority will, I am sure, be shared by all Members, and I commend my statement to the House.
Richard Burgon (Leeds East) (Lab)
This morning the Secretary of State said that it was in July that she had realised that there was a problem in our prisons. The rest of the country was aware of that reality well before then. There is a crisis in our prisons, although the Secretary of State refuses to admit it openly. The story of our prison system since 2010 is a story of spiralling violence and drug use. The root cause of the prison crisis is the political decision to cut our prison service back to the bone, and today’s announcement feels a lot like “too little, too late”. The Secretary of State wants the headline to be “2,500 extra prison staff”, but 400 of those jobs have already been announced, and, in fact, it is 2,500 “extra” after a reduction of more than 6,000 on the front line.
It is deeply concerning that it was only after a threat of unofficial action that the Secretary of State was prepared to meet representatives of the Prison Officers Association to discuss the safety crisis in our prisons. However, she has finally met the leaders of the officers of whom she has asked so much, and they have made the scale of the crisis clear to her. Will she now admit that there is a Conservative cuts-created crisis in safety in our prisons? In his annual report, published in July, the chief inspector of prisons, Peter Clarke, described our prisons as
“unacceptably violent and dangerous places”.
Only if it is recognised that there is a prisons crisis can a prisons crisis be solved.
The Secretary of State clearly now feels that she needs to be seen to be doing something, but the provision of 2,500 extra prison officers is not a cause for celebration, given that more than 6,000 front-line prison officer jobs have been cut since 2010. We have a prison capacity of 76,000 and a prison population of 85,000, which has remained at about the same level since 2010. We had 24,000 prison officers to deal with 85,000 prisoners; now we have 18,000 to deal with the same number. Our hard-working prison staff are overstretched and overwhelmed, and what has that meant? It has meant a record number of prison deaths, including a record number of suicides. The rate is nearing one death every day. There have been 324 deaths this year, including 107 suicides. Overall, we have seen 1,416 deaths since 2010, including 473 suicides. There are now more than 65 assaults each day, and this year there have been nearly 24,000: there has been a huge surge in both prisoner-on-prisoner assaults and assaults on our hard-working prison staff. The statistics show that there have been more than 100,000 assaults in prisons since 2010.
Why is that? It is because the austerity experiment in our prison service has failed. The presence of fewer officers, overstretched and overwhelmed, means a stricter and increasingly unsafe prison regime, and it means that prisons cannot effectively reform and rehabilitate in the way that prisoners and wider society need. Working in prisons has become less appealing and more dangerous. The Government have said that they have recruited more than 3,100 prison officers since January 2015, but there has been a net increase of only 300 in that time. It is clear that they are failing on staff retention. Prison officers are now expected to work until they are 68, in conditions that the Prison Officers Association has described as
“dangerous for everyone, staff and prisoners alike.”
I am afraid that this Conservative Government have not valued hard-working prison staff; in fact, they have driven experienced staff out of our prisons.
Former Conservative Home Secretary and party leader Michael Howard famously said “Prison works.” Under this Conservative Government, prison isn’t working. Prison isn’t working for prisoners, prison isn’t working for our prison staff, and prison isn’t working for wider society. Reoffending rates are far too high, and the Government have failed on rehabilitation. Because prison isn’t working under this Government, it is not protecting our society properly.
The Justice Secretary has undoubtedly grabbed headlines by promising an increase in the number of prison officers, but she needs to tell us how she will attract new staff. She also needs to understand that building new prisons is not a panacea in itself. There are problems over how league tables would work in practice, and there is a tension between more autonomy for prison governors and new powers for the Secretary of State—
Mr Speaker
Order. I thank the hon. Gentleman very much indeed. I gave him an extra half minute, which I think was fair.
Elizabeth Truss
I have to say that I am disappointed by what the hon. Gentleman has said. I thought that, following our exchange on Tuesday, he would welcome the fact that the Government are committing 2,500 extra staff to the front line. We have also produced a White Paper detailing some of the most significant reforms of prisons for a generation to address the violence and the reoffending rates. We are launching apprenticeship schemes to encourage more people to become prison officers, as well as a new graduate entry scheme and a scheme that is intended to increase the number of former armed forces personnel in the Prison Service.
The hon. Gentleman asked about staffing. Our staffing numbers are based on evidence. Our new programme will allocate to every prisoner a dedicated prison officer who will be responsible for supporting and challenging that prisoner. Each prison officer will be responsible for six offenders. We know that that approach works, because we have trialled it: it is based on evidence. For the first time, we are enshrining in statute the Secretary of State’s responsibility to ensure that offenders are not just housed but reformed. Of course they need to be punished and deprived of their liberty, but they also need to be reformed while they are in prison. That is a major change, and I should have thought the hon. Gentleman welcomed it.
Of course it is right for us to give governors authority and accountability, but I have visited numerous prisons where I have met our hard-working prison officers, and they are the people who can turn lives around. They are the people who can motivate someone to get off drugs, to get an education and to get a job. It is right for us to give them the autonomy and authority that enables them to do that, while also holding them to account.
I am disappointed that the hon. Gentleman has seen nothing to commend in the White Paper, which I think addresses many of the long-standing issues in our prison service.
Mr Kenneth Clarke (Rushcliffe) (Con)
I congratulate my right hon. Friend. I warmly welcome her prompt response to the crisis of violence in prisons, and her attractive proposals for strengthening the management of those prisons and the public accountability of the management for their results. Does she agree, however, that her overriding aim of protecting the public by reducing reoffending and preventing prisoners from committing crimes in future is almost impossible to achieve so long as prisons are overcrowded slums? Will she make the courageous decision to start addressing some of the sentencing policies of the 1990s and the 2000s, which accidentally doubled the prison population in those overcrowded slums? Will she ensure that our prisons are reserved for serious criminals who need to be punished, and find better ways of dealing with problems of mental health and drug abuse and with irritating, trivial offenders?
Elizabeth Truss
I am not in favour of an arbitrary reduction in the number of prisoners in our prisons. What I am in favour of is reducing reoffending rates so that we stop people revolving through the system and going in and out of prisons. We need to make sure our prisons work and reform people, and we also need more early intervention so that we prevent people from committing the crimes that lead to their serving a custodial sentence. The fact is we are seeing fewer first-time offenders, so more of our crime problem is now about those who persistently reoffend, and that is the important issue I am seeking to address.
Richard Burden (Birmingham, Northfield) (Lab)
What concerns me is that the Secretary of State appears to think it is a brilliant new idea to establish no-fly zones for drones near prisons—apparently with a taskforce of eagles to be called in at the time, although I suspect the drone will have got in and out by the time the eagle is untethered. Does she not know that drone manufacturers have for some time had the technology to establish these zones? Why have they not been given the GPS co-ordinates of prisons by now, and why is she not meeting them until December?
Elizabeth Truss
The prisons Minister is working closely with drone manufacturers and leading a Government taskforce to address precisely this issue.
Robert Neill (Bromley and Chislehurst) (Con)
The Secretary of State’s statement should on any objective view be welcomed as bold and courageous. Will she confirm that it is part of the important emphasis on rehabilitation reform, which is absolutely right, and that there will be specific measures to test prisons on the extent of their work around education, proper training and preparation for work, and meaningful activity, as well as the amount of time prisoners are out of cell as opposed to in lockdown?
Elizabeth Truss
I thank the Select Committee Chairman for his question. He is absolutely right: there will be measures on the progress prisoners make in English and maths and on employment found. I want employers on the outside with jobs available to be working backwards into prisons. I saw a very good example at HMP Brixton: Land Securities has jobs in scaffolding and is training prisoners so that when they leave they have a job to go to, which we know reduces reoffending. Our league tables will reflect precisely these things.
Karl Turner (Kingston upon Hull East) (Lab)
Is not the truth that we have 3,500 fewer prison officers in our prisons than in 2010? At the same time deaths and suicides in prisons are dramatically up, and assaults on prison officers are up as well. Will the right hon. Lady just come to that Dispatch Box and say, “I admit it: too little, too late”?
Elizabeth Truss
I have been clear that staffing is an issue. That is why we are investing in 2,500 more prison officers, but it is not the only issue. We also have an issue with drugs, drones and phones, which we are dealing with, and we have just rolled out testing for new psychoactive substances such as Spice and Black Mamba, which the prisons and probation ombudsman has said have been a game-changer in the system. We are also changing the way we deploy staff, so that there is a dedicated officer for each prisoner, helping keep them safe, but also making sure they are on the path to reform—getting off drugs, getting into work and getting the skills they need to succeed outside.
Crispin Blunt (Reigate) (Con)
Unsurprisingly, I wholly associate myself with the question of my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke). Does the Secretary of State understand that the prisons are in this state now because of the Faustian pact between the Prison Officers Association and the National Offender Management Service and her predecessor-but-one, in order to deliver the savings demanded by the Treasury: to agree to stripping the public sector establishments down to the bone if he stopped the competition programme? That is what happened. Will the Secretary of State now ensure that the private sector builds the new prisons, and is given a proper opportunity, in competition with the public sector, to run both the new prisons and the existing prisons?
Elizabeth Truss
Today’s White Paper is about the standards we expect of prisons, in both the private and public sector. I have been to some very good public sector prisons and I have been to some very good private sector prisons, and what I care about is getting the best possible outcomes so that we reduce reoffending and crime.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
There is a lot to welcome in this statement, but the Secretary of State would do well to listen to the sage counsel of her right hon. and learned Friend the Member for Rushcliffe (Mr Clarke). The root cause of prison violence is overcrowding, and the root cause of overcrowding is that we still send too many people to prison for short sentences, which will not achieve the purpose the Secretary of State now says she is going to enshrine in statute. Will she not consider a presumption against short sentences?
Elizabeth Truss
I thank the right hon. Gentleman for welcoming elements of the White Paper, in contrast to some of the other comments from the Opposition. We face immediate issues in our prison system, and increasing staffing is part of the solution to that, as is having a much clearer purpose to the prison system. As the number of first-time offenders goes down, we need to address the rump of reoffending in order to address the problems of crime in society. That is why I am focusing on that. We have enough staff in our plans to be able to deliver safe prisons that reform offenders, and we also have a building programme creating 10,000 new spaces so we are able to house those offenders.
Michael Tomlinson (Mid Dorset and North Poole) (Con)
I warmly welcome the statement. Unless there is the necessary discipline and a reduction in overcrowding and reliance on drugs in our prisons there simply will not be the rehabilitation the Secretary of State wants. May I urge her to continue down this path to ensure we help to reduce reoffending as well?
Elizabeth Truss
My hon. Friend is right: being on drugs is one of the major causal links to reoffending. That is why we will test prisoners for drugs on both entry and exit, to see how effective the regime in prisons is at getting offenders off drugs.
Kate Green (Stretford and Urmston) (Lab)
It is almost 10 years since Baroness Corston’s report recommended women should be held in small custodial units, if in custody at all, and as close as possible to home. The Secretary of State has just spoken of substantial investment in the women’s estate, which is very welcome. Will she be able finally to take this important turning point as an opportunity to implement that Corston recommendation?
Elizabeth Truss
I can confirm we are developing the idea of women’s community prisons, which will be smaller-scale prisons specifically designed to address the needs of women. We will outline more about that in due course, and look at overall reform in respect of women offenders in the new year.
Andrew Selous (South West Bedfordshire) (Con)
A little while ago a former prisoner said to me that when he left prison he could mop a floor very well but that was not going to pay the bills. In the recent Dame Glenys Stacey in-depth look at 86 prisoners, not one left to go to a job, so may I urge in particular a focus on construction skills from day one of a sentence, given that we need 300,000 construction workers to build the houses this country needs and the infrastructure for our economy?
Elizabeth Truss
I commend my hon. Friend for the work he did as prisons Minister in promoting employment. I have seen some excellent schemes in prison. For example, Costa Coffee is offering jobs and training people as baristas, and I have mentioned Land Securities looking for scaffolding and dry-lining workers and training them in prison. I completely agree with my hon. Friend that rather than doing work in prisons and then seeing what jobs are available on the outside, we need to look the opposite way round; we need to see what is available on the outside and make sure those are the skills we are training up in prisons, preferably with the employers who are then going to take those offenders on.
Paul Flynn (Newport West) (Lab)
Will the right hon. Lady have a word with the right hon. and learned Member for Rushcliffe (Mr Clarke) in order to reduce her naive optimism and to recall that no party in the last 45 years has reduced recidivism? On this Government’s watch, a recent report said the number of prisoners who first took drugs in, for example, Bedford jail had risen from 4% to 14%, meaning people were going in as shoplifters and coming out as heroin addicts. What is she going to do about that?
Elizabeth Truss
I completely reject the hon. Gentleman’s counsel of despair. This is the first time we will ever be putting it in statute that reform is the purpose of prisons. At the moment the Secretary of State is merely responsible for housing prisoners, not making sure we improve outcomes. We have not had that systematic approach and I am determined we achieve it.
Lucy Frazer (South East Cambridgeshire) (Con)
I welcome the White Paper, which rightly recognises the need to educate prisoners and help them into work. It also identifies existing good practice in the relationships between prisons and businesses. The Lord Chancellor mentioned the scaffolding work; another example would be the restaurant at HMP Cardiff. How will she build on the current schemes and incentivise employers to work more closely with prisons?
Elizabeth Truss
I completely agree with my hon. Friend that engaging with employers is vital. We have seen some fantastic examples, such as Timpson and Virgin, which are already working closely with us. My hon. Friend the prisons Minister will be doing further work on this subject and making further announcements on it shortly.
Andy Slaughter (Hammersmith) (Lab)
I think I heard the Secretary of State admit that cutting 25% of prison officers had been a mistake, but restoring just over a third of that number might not be enough. Will she keep this under review, and can she tell me whether particularly troubled prisons such as Wormwood Scrubs, which have had a temporary uplift in staff numbers, will be able to keep those staff? Will the numbers there go up rather than down?
Elizabeth Truss
The number of staff we are putting in is based on the evidence of our new offender management model. The idea is that each prison officer will be responsible for supervising and mentoring six prisoners and challenging them to reform. There is an important evidential base for that programme, but we will of course continue to look at it as we develop it. We have measures in place in London prisons to help staff recruitment and retention.
Mr Peter Bone (Wellingborough) (Con)
I have been banging on about Wellingborough prison almost as much as I have been banging on about Europe, so I should like to tell the Secretary of State how much I welcome today’s announcement that it will reopen. I particularly want to thank Lynn Holcombe and the other local residents who have done such a good job in keeping the campaign going for such a long time. I must apologise to my hon. Friends the Members for Reigate (Crispin Blunt), for South West Bedfordshire (Andrew Selous) and for East Surrey (Mr Gyimah), and to the Attorney General. Over the years, I have badgered, bought them cups of tea and been a real pain. This will be a wonderful prison and it will be welcomed by the people of Wellingborough.
Elizabeth Truss
I am absolutely delighted to be able to announce the first phase in our programme, and delighted that we are able to make my hon. Friend’s wishes come true in Wellingborough. I look forward to being able to make more announcements about new prisons in due course.
Susan Elan Jones (Clwyd South) (Lab)
I hope that the Secretary of State will be able to give a similarly warm and positive answer to my question. Many charities work with reformed ex-offenders, and they are transforming people’s lives. Those charities have a problem, however, in that some of the ex-offenders are unable to become trustees of a charity. I accept the importance of having safeguarding arrangements in place, but will she look into this?
Elizabeth Truss
I agree with the hon. Lady that we have some brilliant charities and brilliant people who are really transforming lives. I want to make that happen on a wider scale and I will certainly look into the point that she has raised.
Nick Herbert (Arundel and South Downs) (Con)
I warmly welcome my right hon. Friend’s statement and the continuation of a progressive agenda to ensure that prisons are places that not only keep offenders secure but rehabilitate them. Does she agree that it will be important to ensure that staff are empowered and held accountable for that objective of reducing reoffending, as well as for that of keeping people safe?
Elizabeth Truss
My right hon. Friend is absolutely right. We need to ensure that prisons are not only places of safety but places of reform. We are wasting a huge amount of talent at the moment, and we are also presiding over problems in society, with a £15 billion bill for the crimes that ex-offenders go on to commit. We have a progressive agenda, and it is also important to prevent there being more victims of crime.
Jeremy Lefroy (Stafford) (Con)
A year ago, the dear son of my friend and Stafford councillor Ann Edgeller was murdered in Dartmoor prison. Will the Secretary of State or the prisons Minister meet me to discuss the way in which these welcome reforms could ensure that this kind of tragedy does not happen again?
Elizabeth Truss
I am very sorry to hear about the case that my hon. Friend has mentioned, and I extend my greatest sympathy to the family. I would be delighted to meet him and his constituent.
Mr David Nuttall (Bury North) (Con)
I welcome my right hon. Friend’s announcement of more prison officers, but what my constituents really want is to see more burglars and robbers behind bars. When all the old prisons have closed and all the new ones have opened, will there be an increase or a decrease in the number of prison places?
Elizabeth Truss
We are going to ensure that there are enough prison places for those whom the courts are sentencing. That is our duty as a Government, but I also want to ensure that those prisons have safe, decent conditions and that they are places of discipline, hard work and self-improvement so that we can reduce the chances of those burglars burgling again.
Tom Pursglove (Corby) (Con)
Corby and east Northamptonshire residents will wholeheartedly welcome the reinstatement of Wellingborough prison on the existing site. As a former local councillor, I can tell the Secretary of State that this is very good news for local people. I also commend my hon. Friend the Member for Wellingborough (Mr Bone) for his persistent efforts. Will the Secretary of State make my constituents even happier by promising to keep the use of British steel at the forefront of her mind when having discussions about these projects?
Elizabeth Truss
I congratulate my hon. Friend on his championing of British steel, and I shall look closely at his suggestion.
Counter-Daesh Campaign: Iraq and Syria
(8 years, 1 month ago)
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Mr Speaker
I call the Secretary of State for Foreign and Commonwealth Affairs. It is good that he has beetled into the Chamber just in time. We are greatly obliged to him.
The Secretary of State for Foreign and Commonwealth Affairs (Boris Johnson)
Thank you very much, Mr Speaker. With your permission, I shall make a statement updating the House on the campaign against Daesh in Iraq and Syria.
Two years ago, a global coalition that now embraces 67 members came together with the overriding aim of destroying Daesh. The words of one Iraqi recently liberated from Daesh demonstrate in vivid terms why that goal is so necessary. He said of living under Daesh:
“Life was a disaster. We felt like captives and we were afraid all the time.”
Our campaign has now reached a crucial moment. Iraqi forces have fought their way to the eastern fringe of Mosul, two weeks after the onset of an offensive designed to break Daesh’s grip on the largest city within its domain. I want to update the House today on every aspect of the effort to vanquish Daesh and on Britain’s role in this endeavour.
I turn first to the situation around Mosul. Iraqi security forces and Kurdish peshmerga are advancing on the city from the east and the south. The town of Bazwaia, just 2 miles east of Mosul, is among several dozen settlements that have been liberated. Iraqi spearhead units have advanced still further, striking as far as the outskirts of Mosul itself. Overall, the campaign is making good progress. In some areas, Daesh has mounted fierce resistance, dispatching scores of suicide bombers against the liberating forces. It has mounted diversionary attacks in the city of Kirkuk and as far away as the town of Rutba, almost 400 miles south-west of Mosul. The House can be sure that Daesh will be driven from Mosul, but this is the toughest task that Iraq’s security forces have yet encountered, and success will take time.
We have worked tirelessly with the Government of Iraq, the Kurdish regional government, the United Nations and our coalition partners to prepare for this campaign. The aim is to defeat Daesh in a way that protects civilians, minimises human suffering and promotes a political settlement. I pay tribute to Prime Minister Abadi for his statesmanship and his acute awareness that genuine Iraqi national reconciliation must follow Daesh’s defeat. The terrorists have threatened to inflict a scorched earth campaign once the loss of Mosul becomes inevitable. Already, they have set oil wells ablaze and destroyed a sulphur plant south of the city, releasing clouds of noxious gas. Daesh’s vindictiveness in defeat may cause many of Mosul’s people to flee. The Iraqi Government are leading the humanitarian response, helped by aid agencies and the UN. My right hon. Friend the Secretary of State for International Development has announced a further £40 million of UK humanitarian aid, focused on Mosul. I commend her leadership, which has placed Britain at the forefront of the international response, bringing the total amount of British aid pledged for Iraq to almost £170 million.
Even before the advance on Mosul, the coalition and local forces had broken Daesh’s grip on about half of the territory it once controlled in Iraq and a quarter in Syria. Our armed forces have been crucial to this effort. The House will wish to join me in paying tribute to British servicemen and women who are working tirelessly to vanquish Daesh and keep our country safe. On the ground, we have 500 British soldiers in Iraq, where they are helping to train that country’s forces. Across the middle east, nearly 1,350 British military personnel are supporting operations against Daesh. Our troops have helped to train more than 29,000 members of the Iraqi security forces, including some units now approaching Mosul. As my right hon. Friend the Secretary of State for Defence announced last week, the UK will resume training of vetted members of Syrian opposition groups to fight Daesh. In the air, the RAF has delivered 1,105 air strikes against Daesh—1,038 in Iraq and 67 in Syria. With the exception of the United States, no country’s air force has carried out more strikes.
However, as the Chilcot report reminded us, the gains of any military operation will be preserved only if they are followed by the painstaking task of stabilisation and rebuilding lives. As more areas are liberated from Daesh, protecting the population and helping them to return to their homes is a central priority of the Government of Iraq, working alongside the coalition and the UN. Britain is providing over £15 million for UN stabilisation efforts. Wherever Daesh is driven back, we are helping to fund the UN to clear the lethal explosives the terrorists leave behind, repair water supplies, restore power networks and reopen schools. So far, over 775,000 people have been helped to return home to liberated areas of Iraq, including the Sunni heartlands of the Euphrates valley.
Daesh’s defeats on the battlefield are helping to counter its ideological narrative. The UK leads the coalition’s efforts in this area. We host the coalition’s global communications cell in London, where experts from 10 countries are working together to blunt the edge of terrorist propaganda. Daesh’s propaganda output has fallen by around 70% in the last year. As one defeat succeeds another, they are increasingly seen for what they are: a failing and disintegrating movement. On 19 September at the UN in New York, I launched a global campaign, alongside my Iraqi and Belgian counterparts, to bring Daesh to justice. Our aim is simply justice for all those affected by Daesh, regardless of their religious beliefs and including those who suffered in terrorist attacks around the world. I intend the campaign to be led by the UN and to begin by gathering and preserving evidence of Daesh crimes in Iraq. However long it may take, those who committed unspeakable acts must be brought to justice.
I turn now to the situation in Syria. As the House debated in September, the brutality of Assad, and the misguided interventions of Russia and Iran, are prolonging the civil war and postponing the final defeat of Daesh. Assad and his allies have hurled their strength against opposition-held eastern Aleppo. Russia and Iran claim to be fighting Jabhat al-Nusra, the Syrian branch of al-Qaeda, yet they have joined forces with Assad to carry out an assault on eastern Aleppo, where 275,000 people are living under siege and where the UN has been unable to deliver aid for the last four months.
The House should be in no doubt that the attack on eastern Aleppo has little to do with defeating terrorism and everything to do with preserving Assad’s blood-soaked regime. Wherever Daesh has lost ground in Syria, this has frequently owed nothing to Assad or his backers. In August, it was the Syrian Democratic Forces that threw Daesh out of the town of Manbij. In September, moderate armed opposition groups, helped by Turkish forces, expelled Daesh from Dabiq, a town in northern Syria of great symbolic significance. The same combination drove Daesh from the towns of Jarabulus and al-Rai. The lesson is clear. While Assad, Russia and Iran inflict untold suffering on eastern Aleppo, it is Turkey and the moderate Syrian opposition who are pressing on with the task of defeating Daesh.
Meanwhile, the humanitarian situation across Syria is appalling. More than five years of civil war have killed or displaced about half of the entire population. Last Wednesday, Stephen O’Brien, formerly a member of this House and now the UN’s Under-Secretary-General for Humanitarian Affairs, gave a briefing to the Security Council and I would recommend that every Member read it. He described the “apocalyptic horror” being visited upon eastern Aleppo. Only six partially functioning hospitals survive in this besieged wasteland where fewer than 30 doctors struggle to bind the wounds of a population under relentless assault. Last Friday, a rebel alliance that includes Syria’s branch of al-Qaeda attacked regime-held western Aleppo. They shelled the area and killed at least 40 civilians, including children. I condemn attacks on civilians whoever carries them out—I am sure the whole House will agree.
Britain has pledged £2.3 billion to the Syria relief effort—our largest ever response to a single crisis, making us the second biggest humanitarian donor behind the US—but in the end a political transition away from Assad is the only way to end the civil war and defeat Daesh. That is why I convened a meeting on 16 October in London of our key partners, including Secretary Kerry of the United States. We discussed our options for responding to the situation in Syria, particularly the humanitarian crisis in Aleppo. The EU Foreign Affairs Council has agreed to increase the pressure on Assad, including by imposing sanctions on more members of his regime. Last week, another 10 individuals were added to the EU sanctions list, including military commanders responsible for ordering chemical attacks and planning assaults on Aleppo.
At the same time, a UN investigation confirmed yet again what this Government have long known, namely that Assad’s forces have repeatedly used poison gas. The UN’s Joint Investigative Mechanism has concluded that regime forces employed chemical weapons three times and Daesh once. We are pressing for a UN resolution to hold accountable those who used such horrific weapons in defiance of the rules of war. If Russia chooses, once again, to protect Assad by casting its veto, it will be shielding someone whose forces have been found guilty over and over again—by a UN investigation that the Kremlin itself supported—of killing their own people with poison gas. I say that vetoing such a resolution would be unconscionable. But I wish to make one point abundantly clear: Russia could win the acclaim of the world by permanently halting the bombing of civilians and persuading Assad to return to negotiations. As well as being profoundly right in itself, that would be the single greatest contribution that Russia could make to the struggle against Daesh.
Daesh is also coming under pressure in Libya. Forces aligned to the Government of National Accord, supported by US airstrikes, have weakened Daesh’s hold on the city of Sirte. The international community must support the full implementation of the Libyan political agreement, and that was why Secretary Kerry and I co-hosted a meeting on Monday with key international partners and the Libyan Prime Minister, Mr al-Sarraj. Hon. Members should have no false hopes. Despite our efforts and our progress, Daesh remains determined and fanatical. Its defeat will require the liberation of Raqqa, its stronghold in Syria.
Even as Daesh is being routed on the battlefield, our country still faces a grave threat from terrorism, so I pay tribute to the dedication of those in our security and intelligence services, who have foiled 12 plots to attack the UK since September 2013. The flow of British citizens to join Daesh or other terrorist groups in Syria has fallen steadily since the beginning of 2015. Approximately 850 people of national security concern have travelled to Syria since the war began. We estimate that just under half have returned, and 15% have been killed.
In conclusion, the campaign to liberate Mosul opens a vital chapter in the struggle against Daesh. It will not be the final one, but Daesh is now in retreat on every battlefront in Iraq and Syria. After so much bloodshed, its downfall is not a matter of if but when. I commend this statement to the House.
Emily Thornberry (Islington South and Finsbury) (Lab)
I join the Secretary of State in recognising the extraordinary commitment and bravery of the men and women of our armed forces. As we approach Remembrance Day, our thoughts are with not only those who have made the ultimate sacrifice in the past, but those who put their lives at risk every day to keep us safe.
I also welcome the Secretary of State’s update on the progress made in fighting Daesh in both Syria and Iraq. Even in the past week, we have seen further evidence of the medieval horror and barbarism that has become Daesh’s trademark: a Free Syrian Army prisoner blown to pieces with an artillery gun; children being forced to carry out executions; and Daesh’s own fighters in Mosul being forcibly drowned for attempting to surrender. Equally disturbing was yesterday’s audio message, attributed to Daesh leader Mr al-Baghdadi, calling on jihadis inside Mosul to fight to the death and urging their counterparts around the world to strike at western targets, and doing so in terms that were nakedly sectarian in their demonisation of Shi’a Muslims. What assessment have the intelligence agencies made of the authenticity of that audio message? If it is authentic, what is its significance?
There is no doubt that those words and actions, despicable as they are, are those of a movement that is embattled, weakened and in retreat. Nowhere is that more true than in the ongoing battle for Mosul. I join the Secretary of State in saluting the bravery of the Iraqi armed forces, the peshmerga fighters, the Shi’a militia and the Sunni tribesmen who are leading this courageous and vital fight. I also pay tribute to the skill and expertise of the personnel from Britain and other countries who are advising them.
As the battle moves deeper into the city, it is more important than ever for this operation to proceed with discipline and professionalism. We know that Daesh will be fully prepared to use Mosul’s population as human shields, to execute those who try to surrender and to use terrorist tactics against the Iraqi forces. Unfortunately, high numbers of civilian casualties therefore seem inevitable. Can the Secretary of State tell us how the Iraqi forces plan to keep those casualties to a minimum when conducting their own operations? I am sure that he will have been as shocked as I was by reports from Amnesty International of Sunni tribesmen taking part in the anti-Daesh coalition engaging in reprisals in the villages that they have liberated around Mosul against civilians who were alleged to have supported Daesh. How can we best ensure that such behaviour is not repeated inside Mosul itself? How can we best ensure that stability is restored? How can we avoid sectarian violence? How can we avoid a dangerous power vacuum once Daesh’s forces in Mosul have been destroyed?
The Secretary of State has rightly referred to Chilcot and the lessons that need to be learned from it. Over the years, we have learned one clear lesson from Iraq: winning the battle is never enough; we must also plan effectively for the peace. I therefore hope that the Secretary of State can tell us how those plans are progressing.
Finally on Mosul, I welcome the Secretary of State’s commitment to provide lasting support to the tens of thousands of civilians who have been displaced from their homes and will face destitution in the aftermath of the battle. Have there been similar commitments of humanitarian aid from our coalition partners in Iraq? If there have not, will he press them to match the UK’s contribution?
I also thank the Secretary of State for his update on progress against Daesh in Syria. Although much of our attention has been focused on the dreadful assault on eastern Aleppo—I fully agree with his remarks about Russia and the Assad regime—we must not lose sight of the fight in Syria against Daesh. Last week, the US Defence Secretary, Ashton Carter, said that an attack on Raqqa would begin
“in the next few weeks”
This level of urgency was reportedly triggered because of fears that an imminent attack on targets overseas was being planned within Raqqa. However, the question remains as to whether Kurdish fighters can be part of any operation on Raqqa if Turkey is also involved. If they cannot, without those Kurdish fighters, are there sufficient numbers of trained moderate Sunni rebels to take Raqqa on their own? What is the Secretary of State’s assessment of the likely timetable to move on Raqqa, of the composition of the ground forces who will wage that battle, and of the role that UK personnel and resources will play?
We welcome the progress that has been made in the fight against Daesh in recent weeks in Mosul and elsewhere. That vital fight is one on which we support the Government and that we are clearly winning. We also welcome signs that this progress will be maintained in Raqqa, meaning that Daesh will lose its strongholds in both Iraq and Syria. I thank the Secretary of State again for his update, but hope he can address the few outstanding issues I raised.
Boris Johnson
I am very grateful to the hon. Lady for her general support for the progress that has been made by the coalition forces, involving 67 nations, in defeating Daesh in Iraq and Syria. British servicemen and women in that theatre will welcome her words and the support from the House of Commons.
Let me deal with some of the points that the hon. Lady raises. She asked about Mr al-Baghdadi’s propaganda video inciting people to fight, which many Members will have seen. It is a cruel irony that, as she may know, some of the intelligence we have suggests that the gentleman in question has vacated the scene, but he is none the less using internet media to encourage people to take part in violence.
The hon. Lady asked the most important question, which is really about the management of Mosul after it is recaptured. I am talking about the management of a city of 1.5 million people who are mostly Sunnis. How will it be managed? It is vital that that should be done with a force that is plural in its composition—President Abadi and the Iraqi forces have done their level best to ensure that it is so—and that there is a government structure that commands the confidence of the people of Mosul, that delivers services for the people of Mosul, and that gets that town running again in a way that, frankly, it has not done under the tyranny of Daesh.
I can give the hon. Lady every possible reassurance that a huge amount of preparation has been made over many, many months by the United Nations Development Programme and others, with the active participation of this and other Governments around the world who wish to see a secure future for that city. Everybody understands the paramount importance of bridging the sectarian divide. Prime Minister Abadi has talked the right language about wanting to reconcile his country and the communities therein.
The hon. Lady asks about the timetable for the recapture of Raqqa and the American plans for that. It would be premature to give such a timetable now. What Ashton Carter was referring to was the plan to isolate Raqqa rather than specifically to recapture it. I do not think that we should get into detailed speculation about the timetable now.
None the less, looking at the situation in the round, I think that the House will accept that considerable progress is being made by the coalition in defeating Daesh, which not only has sustained a series of military defeats but, since 2014 when this campaign began, has lost Tikrit, Baiji, Sinjar, Ramadi, Hit, Ruqba and Fallujah in Iraq. In the Kurdish areas of Syria, it has lost al-Shaddadi, Manbij, Dabiq, Jarabulus and al-Rai. Very substantial progress has been made territorially, which is having a profound moral impact on the credibility of that evil body and exposing it for what it is: a disintegrating and failing terrorist organisation.
Several hon. Members rose—
Mr Speaker
Order. This is an extremely important and sensitive matter, but may I just point out to the House that there are several Members on both sides of the House who entered the Chamber after the Foreign Secretary began his statement, but who apparently, in defiance of all convention, expect to be called, which they should not? Although this is incredibly important, we have important further business to which to proceed, so I appeal to Members to please ask brief, single-sentence supplementary questions without preamble no matter how elevated their status in the House. I call Mr Crispin Blunt.
Crispin Blunt (Reigate) (Con)
Is the Foreign Secretary satisfied that he has resources in the stabilisation unit in the United Kingdom and the stabilisation forces in the United Nations that are adequate to the task in Mosul? Will he give us his assessment of what is going on between Turkey and Iraq—the war of words between those leaders and the massing of Turkish armour on the borders of, and indeed in, Iraq?
Boris Johnson
It is vital that where Turkey can be useful—it certainly can be useful, and is more than useful in the struggle against Daesh—we maximise and optimise its contribution. Clearly there are sensitivities and difficulties that need to be managed, particularly in its handling of the Kurdish areas, where there is a risk of disagreement about the nature of some of the Kurdish groups and the threat that they pose to Turkey, and the utility that they have for the world in defeating Daesh. I am confident that we will be able to work towards the stabilisation of Mosul. As my hon. Friend knows, the UK has made considerable financial contributions towards that effort already. In September, we announced £40 million in humanitarian assistance for Mosul, bringing our total contribution to £169 million. We are also providing £300 million in loan guarantees to Iraq through the World Bank. Clearly this process must primarily be done by the Government of Iraq. This is a massive moral and political challenge for them, and obviously we are doing everything we can to support them.
Ms Tasmina Ahmed-Sheikh (Ochil and South Perthshire) (SNP)
I am very grateful to the Foreign Secretary and I welcome his update, particularly on the current situation in Mosul. I also take this opportunity to pay tribute to our servicewomen and men who put their lives at risk for our safety.
The lives of 1.2 million civilians trapped in Mosul are indeed in grave danger. Their wellbeing is paramount, and no effort must be spared in ensuring that they are protected during the fighting and cared for in the aftermath; they suffered long enough during the two years of Daesh occupation.
The Foreign Secretary recognises the challenges that face Mosul. Will he confirm what contingency plans have been made to support an exodus from Mosul, which has long been predicted by the UN and by aid agencies on the ground?
On Syria, the Foreign Secretary speaks of liberating Raqqa. I appreciate that he does not wish to provide a timetable, but will he confirm that there is in fact a plan in place to do that? He has often said that he is working with the Syrian High Negotiations Committee. However, that appears to be at cross purposes with the Ministry of Defence, which is providing military support to the Syrian democratic forces, which were excluded from opposition talks in Riyadh by the HNC less than a year ago. Will the Foreign Secretary explain that contradiction?
The Foreign Secretary refers to the resumption of training of vetted members of Syrian opposition groups. One year ago, the US-led $500 million training programme of moderate Syrian opposition forces was suspended by President Obama because of its total failure to produce any competent soldiers. Will the Foreign Secretary explain what has changed on the ground since then to lead the Government to believe that the results will be any different now? He is on record as stating that it is only when the fighting and bombing stops that we can hope to deliver the political solution, but we need to see real evidence of progress in this direction as a matter of urgency.
Boris Johnson
I am grateful to the hon. Lady for her questions. She is right to be concerned about the possible westward movement of refugees from Mosul and the possible movement of Daesh terrorists from Mosul to Raqqa. That is certainly being considered in a military context. The United Nations High Commissioner for Refugees is currently budgeting for a migration of about 90,000 people. Preparations have been made. The UK, as I said earlier, is at the forefront of funding preparations for any such eventual movement. Clearly, the success of the operation in Mosul will largely dictate how that turns out.
On the hon. Lady’s point about the Kurdish opposition and the High Negotiations Committee, let us be in no doubt that the HNC is a broad-based grouping that brings together people from across Syria. It has a great deal of credibility as a pluralistic and forward-looking entity that captures the possible future for that country and shows that there really can be a future for Syria without Assad, who can no longer govern that country given that he is overwhelmingly responsible for the deaths of the majority of the 400,000 people who have died in that conflict. The HNC has a great deal of credibility and we should be giving it our full backing.
Mr Speaker
I call John Redwood. [Interruption.] It is very unusual for him not to be here—[Interruption.] He was here, indeed. I call Sir Henry Bellingham.
Sir Henry Bellingham (North West Norfolk) (Con)
The crimes committed by Daesh, including crimes against children, and hangings and crucifixions, are beyond brutal and horrendous. What more can be done to use UK expertise to help to bring those people to justice? Has my right hon. Friend discussed the matter with the Department for International Development in terms of funding specialist teams?
Boris Johnson
My hon. Friend raises an extremely good point. As I mentioned to the House a few weeks ago and repeated just now, the UK has launched a campaign, working with our partners, to bring to justice the Daesh terrorists, the perpetrators of violence and crimes against humanity. As I said before, the mills of justice grind slowly but they grind small. We are assembling the evidence, supporting NGOs in the gathering of evidence and working with our partners to establish exactly what legal mechanism would be most suited to bringing those people to justice.
Alison McGovern (Wirral South) (Lab)
This statement is about Daesh, but the Foreign Secretary has quite rightly not held back his words condemning Assad’s brutality to his own people. In line with the campaign by the Daily Mirror to save Aleppo, which I am sure the right hon. Gentleman supports, will he come back to this House as soon as possible with a comprehensive British-led strategy to protect civilians in Syria?
Boris Johnson
I pay tribute to the long-standing commitment that the hon. Lady has shown to this cause. I will give the undertaking that she asks for, in the sense that we are working on that the whole time. The House will have heard me explain before that some options commend themselves to people in a slightly glib way—we talk about no-fly zones or no-bomb zones—and they sound easier than they are, but as I am sure the hon. Lady will know, there are other things that we could and should be doing. We can do them only in a coalition of international partners, and, as the Prime Minister rightly said at the October European Council, no option is off the table.
Sir Oliver Letwin (West Dorset) (Con)
What is my right hon. Friend’s strategy going to be if events in the United States next week are followed by the complete victory of Russia and Assad in Syria and the elimination of Daesh by those means?
Boris Johnson
With his characteristic brilliance, my right hon. Friend asks a very difficult but hypothetical question which, given that it is hypothetical, I am entitled to decline to answer. What I can say is that I believe that under any circumstances, whatever happens in the United States on Tuesday of next week, the relationship between the UK and the US is the single most important political relationship in the world and will continue to be robust.
Mr Ben Bradshaw (Exeter) (Lab)
Nevertheless, that relationship would be a lot better if President Clinton wins, as I am sure most people in this House agree. Does the Foreign Secretary see any prospect in that of then not giving up on his desire to see a more robust response to the Russians and to Assad in Aleppo?
Boris Johnson
I cannot, as I say, comment on the elections in another very friendly country. We have to wait and see what happens there, but I do not think that anybody here wants the United Kingdom under any circumstances to abandon its driving role in that question.
David T. C. Davies (Monmouth) (Con)
Does the Secretary of State agree that we have been absolutely right in this country to provide general financial support for refugee centres throughout the middle east, and that this must continue for humanitarian reasons?
Boris Johnson
My hon. Friend is completely right. We have a proud record in this country of contributing to humanitarian relief and to the care of refugees—the single biggest contributor after the United States. As the House will know, £2.3 billion is the total envelope of our commitment to humanitarian relief for the area.
Mike Gapes (Ilford South) (Lab/Co-op)
The Foreign Secretary referred to Russia’s vetoes, or potential vetoes, in the Security Council. There have been five in five years, most recently on 8 October on war crimes. Given the Russian vetoes in the UN, does he believe that the Security Council is failing? Is it not time to consider using the other possible mechanism within the United Nations—the General Assembly’s Uniting for Peace process? Would the British Government support that?
Boris Johnson
We are looking at that. It will not surprise the hon. Gentleman to know that the advice I have had so far is that that would almost certainly not work, but I have asked our officials to go back and see what they can do. I have studied the proposal with interest and with care. The hon. Gentleman should not get his hopes too high, but we should rule nothing out.
Sir Desmond Swayne (New Forest West) (Con)
How likely is reform in Iraq, which is so vital to this enterprise?
Boris Johnson
My right hon. Friend asks the fundamental question. Everybody who has talked to Prime Minister Abadi or Foreign Minister al-Jaafari, as I have, will feel that they understand what they need to do. They get the scale of the problem and the credibility that they need to build with their own people. Whether they will achieve that is a matter for them. It is vital that they do not shirk their responsibility, and we will give them every possible support.
Kate Green (Stretford and Urmston) (Lab)
The Foreign Secretary will be aware of the appalling persecution suffered by Christians and other religious minorities at the hands of Daesh, and the role that those religious communities can play in helping with the relief effort and the reconstruction of Mosul and other cities after the conflict. Can the right hon. Gentleman say what he is doing to support the idea in the Iraqi Government in particular of the positive role that Christians and other minorities can play during and after the conflict?
Boris Johnson
It is vital that freedom of religious belief should be guaranteed under the Iraqi constitution and under the future Syrian constitution. That is why I made the point to the hon. Member for Ochil and South Perthshire (Ms Ahmed-Sheikh) about the pluralism of the High Negotiations Committee. That is something that we have stressed time and again to Prime Minister Abadi and it is very much part of his manifesto and his plans for the country.
Alistair Burt (North East Bedfordshire) (Con)
In relation to bringing people to justice, may I commend the work of the International Commission on Missing Persons which, by its work in identifying bodies, was responsible for a number of war criminals from Bosnia being brought to justice at The Hague? The ICMP, of which I am the UK’s international commissioner, is seeking support from sponsoring Governments to continue its work in Iraq and Syria. May I assure my friends in the commission and its excellent director, Kathryne Bomberger, that the United Kingdom will remain first among equals among Governments supporting its work?
Boris Johnson
I thank my right hon. Friend for his excellent work in tracking down missing persons. I can assure him that both he and his organisation will continue to receive the full support of the Foreign Office and of Her Majesty’s Government.
Tom Brake (Carshalton and Wallington) (LD)
Can the Foreign Secretary reassure the House that in the town of Tal Afar to the west of Mosul, which Shi’a militias are moving into, there will be no risk of sectarian violence, which would clearly set back any prospect of reconciliation and reconstruction in Iraq?
Boris Johnson
The right hon. Gentleman will know that Tal Afar is a town with a very complex religious and ethnic mix. I wish I could give him the full assurance that he seeks, but that would be premature. We are doing everything in our power, with the training operations that we have conducted and the support that we have given, to make sure that sectarian reprisals do not happen in Tal Afar or anywhere in the recaptured territories of Iraq.
Dr Andrew Murrison (South West Wiltshire) (Con)
The Foreign Secretary spoke about the training of soldiers and vetted forces, and the hon. Member for Islington South and Finsbury (Emily Thornberry) explained why that was necessary. Will my right hon. Friend confirm that that training will take place in theatre and not in the UK, as we would not want to repeat the mistakes of 2014 in respect of Libyan forces in Bassingbourn barracks in Cambridgeshire?
Boris Johnson
My hon. Friend will know that some of the training programmes over the past few years have not been entirely successful. As we step up our training efforts again and get on with vetting and security screening new candidates, that will be done outside theatre and outside Syria in order to get the best possible results.
Brendan O’Hara (Argyll and Bute) (SNP)
Today I have written to the Prime Minister asking her to pay specific attention to the plight of the estimated 2,000 Yazidi women and children who are still held in sexual slavery in Mosul, and who, once released from the evils of Daesh, will need specialist care. Will the Foreign Secretary encourage the Prime Minister and Cabinet colleagues to look at the great work being done by the Baden-Württemberg Government in Germany, who have a programme of specialist psychological care and emotional support for these victims of unimaginable horror, with a view to the United Kingdom following suit?
Boris Johnson
I think that the number of female Yazidi captives has been put even higher than the hon. Gentleman indicates—I have seen a figure of 3,500. Clearly their needs will be very important as Mosul is recaptured. As he will know, the UK Government attach particular importance to looking after the victims of sexual violence in conflict.
Mrs Anne-Marie Trevelyan (Berwick-upon-Tweed) (Con)
Will the Foreign Secretary join me in paying tribute not only to our service personnel but to each and every one of our military families, the spouses and children, who are silently and resiliently supporting our service personnel?
Boris Johnson
My hon. Friend makes an excellent point that I know the whole House will want to echo. The families of our servicemen and women face hardship, anxiety and, of course, terrible personal risk.
Tom Tugendhat
Would my right hon. Friend care to mention whether he feels that the inaction of the west over the crimes being committed in Aleppo has empowered the Russians, should they get the opportunity in coming weeks, to seek further territorial expansion?
Boris Johnson
My hon. Friend, who is a student of military history, will probably agree that a critical moment for this House, and indeed for the west, came in 2013 when we could have taken another path. The military space was effectively filled 18 months ago by the Russians, and indeed by Daesh, and we are now living with the consequences of that failure.
Andrew Selous
What are the most hopeful examples of harmonious relations between Sunni and Shi’a that the Foreign Secretary could point to that could best be spread across the middle east?
Boris Johnson
My hon. Friend asks a very good question. It goes to the heart of the crisis across the middle east. Everywhere we look, we see people failing to move off their sectarian base and reach out to the opposite community. There is a tragic failure of leadership across the whole region. That is the core of the problem. It requires people to have the imagination, the generosity and the courage to see that they have to be bigger and that they have to reach out to the opposite faction. I very much hope that Prime Minister Abadi and the Iraqi Government are indeed made of such stuff, and I see signs of hope in the co-operation in that Government between Sunni and Shi’a. That is what we have to build on in that area.
Robert Jenrick
Presumably when Mosul falls the conflict could go into a new and equally dangerous phase in which Daesh fighters melt into the civilian population and become an insurgency. What support, in terms of retraining and re-equipping, are the Government offering the Iraqi security forces as they start becoming a counter-insurgency force?
Boris Johnson
Again, that is an extremely apposite question, because that is what some members of Daesh are already doing: they are acquiring razors, shaving off their beards and trying to melt back into the community. We must understand that this will be a long struggle for hearts and minds and for changing their mindset, but the UK is in there for the long haul; we are going to stay the course.
Mr Speaker
I am most grateful to the Foreign Secretary and to colleagues. In the presence of the Foreign Secretary, I should advise him that in his absence in the Robing Room on Tuesday afternoon, the Colombian President acknowledged in the most approving terms his book on Churchill. I trust that, as a result of that, the right hon. Gentleman will go about his business for the remainder of the day, as he should, with an additional glint in his eye and spring in his step.
A&E Departments: Winter Pressure
(8 years, 1 month ago)
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Mr Speaker
We now come to the Select Committee statement. Dr Sarah Wollaston, the Chair of the Health Committee, will speak on the subject for up to 10 minutes, during which—I remind colleagues of this relatively new procedure—no interventions may be taken. At the conclusion of the statement, the Chair will call Members to put questions on the subject of it and call Dr Wollaston to respond to them in turn. Members can expect to be called only once each. Interventions should be questions and should be brief. Those on the Front Bench may take part in questioning.
Dr Sarah Wollaston (Totnes) (Con)
The Health Committee held an inquiry into winter pressures in accident and emergency departments. What we found, however, was that those pressures are now year-round, and that they worsen in the winter.
I would like to start by thanking all those who work in our national health service and our ambulances services, and all those who submitted written evidence and presented oral evidence to our inquiry. I also want to thank all fellow members of the Committee and the Committee team, especially Huw Yardley and Stephen Aldhouse, for their contribution to the report.
The root of the problem is unprecedented demand. It is not just about the sheer number of people arriving in our accident and emergency departments—on average, around 40,000 people attended a major accident and emergency department per day in 2015-16, which was 6,000 more per day than five years previously—it is also about the complexity of the conditions with which they are presenting. The worsening performance that we are seeing, which is of great concern to the Committee, is also a reflection of system-wide pressures across the whole NHS.
We noted that only approximately 88% of patients arriving at major accident and emergency departments are being admitted, transferred or discharged within four hours. That is concerning, because it falls considerably short of the target performance standard of 95%. We should not think of this as just an arbitrary target or a tick in a box; it matters for patient safety and for patients’ experience of the care they receive.
Our report identifies a number of factors. We are also concerned about the level of variation in performance of accident and emergency departments. Often that performance cannot be attributed only to local pressures or demographics. We acknowledge that there are many things that hospital trusts can do to learn from the best performing departments to help improve the flow from the front door to the point of discharge, and to prevent people from getting caught in that revolving door by being readmitted. I pay tribute to the efforts of NHS England and of all those working locally and regionally to try to make sure that the NHS starts to learn from best practice, and I particularly commend Pauline Philip and her team for what they are doing.
One thing, however, comes across very clearly from our report: the impact that the deficiencies in social care are having on accident and emergency. If we cannot discharge patients at the end of their journey because no social care packages are available, it has a domino effect throughout the whole system. Not only that, but people arrive in accident and emergency departments who could have stayed at home if they had had the right social care package. The Committee therefore repeats its request to the Chancellor to look at social care in his autumn statement and to prioritise it.
We also recognised that many accident and emergency departments are under particular pressure because of their working infrastructure—the premises may be completely inadequate to cope with the increase in demand and complexity—so we repeat our call to the Chancellor to look in his autumn statement at the capital budgets in the NHS and to make sure that the funds are available to allow the transformative changes that can bring struggling A&Es up to the same performance level as those that are functioning the best.
There are also, of course, issues with the workforce. We are concerned about the impact of workforce shortfalls in the NHS, and we ask Health Education England to redouble its efforts to look at them.
When we visited East of England ambulance trust we found that it was concerned, as were others who submitted evidence, about the impact of delayed transfers at the front door of accident and emergency departments. Again, there is great variation, and it is not all about infrastructure. If ambulances are all gummed up in one accident and emergency department it has a serious knock-on effect within an ambulance trust area, so we call on those who are not putting in place the correct procedures to look carefully at the impact that that is having and to make changes this winter.
The Government also need to look at issues around alcohol policy. Anybody who has attended an accident and emergency department on a Friday or a Saturday night will know of the pressures that problem drinking creates. We ask the Government to consider making health an objective for licensing and to look at doing all they can to reduce the impact of alcohol. That impact is felt not just on waiting times, of course, but on the morale and wellbeing of staff working in our emergency services.
I thank all those who have contributed to this inquiry, and I look forward to hearing the Government’s response.
Justin Madders (Ellesmere Port and Neston) (Lab)
I echo the words of the Chair of the Select Committee in thanking all the staff who work so hard in the health service. I also thank those who produced and contributed to the Select Committee’s report, which is important and concerning in equal measure.
The report is clear that years of underfunding in social care are now having a dramatic effect on A&E presentation. Does the Chair of the Select Committee agree that, ahead of the autumn statement, if there is to be the necessary injection of cash into the social care sector the Chancellor will have to come up with a better solution than one that relies on hard-pressed local councils raising the necessary funds locally?
Dr Wollaston
I thank the shadow Minister. The Committee agrees that there needs to be more funding for social care. We were concerned that the evidence we heard in this inquiry and previous inquiries is that the money raised from the social care precept has been swallowed up by the cost of the living wage. We absolutely welcome an increase in pay for hard-pressed care workers, but we feel that the increase in funding is completely inadequate to deal with the scale of the increase in demand.
The Minister of State, Department of Health (Mr Philip Dunne)
I would like to add my welcome for the work of the Health Committee in this report and to say how pleased I was to have the opportunity to appear before my hon. Friend’s Committee for the first time since taking up this post.
We all recognise that the system is facing a challenging winter, but we are determined to ensure that the NHS and the social care sector are focused on trying to deliver for patients and that the national organisations, where possible, are in a position to support them effectively this winter.
This year, the NHS is better prepared for winter than ever before, with NHS staff working incredibly hard throughout the year and more ready for what will be the busiest time for the NHS. Despite increased demand, the NHS is performing well, with nine out of 10 people seen in A&E within four hours.
We have ensured that there are robust plans in place. That includes providing for the availability of key services, such as primary and social care, during the Christmas and new year bank holiday periods in advance, which has not happened before. For the first time, there is also a national A&E improvement plan to improve flow through hospitals from the front door to final discharge, with the implementation of five initiatives, and there is a specific intervention on discharge.
The Select Committee’s report highlights continuing pressures on emergency departments, so does my hon. Friend share my welcome for the 25% increase in doctors—almost 1,200 more doctors—working in emergency medicine since 2010?
Dr Wollaston
Of course I welcome the increase in staff in our accident and emergency departments. As the Minister will recognise, there is further to go in this regard.
Mr Ben Bradshaw (Exeter) (Lab)
Does the hon. Lady agree that the four-hour A&E target is absolutely vital, because it, more than any other target, shows the overall performance of a hospital, and that the figures are extremely worrying? Does she also share my concern that last winter was very mild, and we were relatively lucky, with the absence of a big winter flu outbreak? If this winter is as cold as this Chamber, the NHS could face a very serious crisis indeed.
Dr Wollaston
Certainly, the evidence we heard in our inquiry was that there is grave concern about the level of existing pressure. As the right hon. Gentleman says, if we see a very cold winter, and the flu vaccine does not work as well as it did last winter, we are in serious difficulties. But I stress again that the Committee was very clear that we want to see the four-hour waiting time standard continued, because it is a good measure of whole-system pressure, and if people are facing very long waits that leads to a deterioration in patient safety. So it is a quality issue, as well as an issue about patient experience.
Andrew Selous (South West Bedfordshire) (Con)
I note what the Chair of the Health Committee says about social care and delayed transfers of care. Would she commend an initiative taken in hospitals in Fife, where the most senior consultants were put into accident and emergency, which led to a 30% reduction in admissions to the hospital? Does she not agree that more junior staff are sometimes perhaps slightly more risk-averse because they do not have the experience? Does she not think that, where Fife has led, other hospitals around the UK could usefully follow?
Dr Wollaston
I thank my hon. Friend, and I welcome him to the Health Committee. Yes, he is absolutely right that one of the initiatives that has been put forward is to look at streaming at the front door, but what we heard is that this is quite nuanced. If very senior staff are tied up seeing every single person at the front door, that can be a waste of resources. However, if the patients who are most at risk of needing admission—the sickest individuals —are identified early on and seen by the most senior doctors available, then yes, absolutely, that makes a difference.
Karin Smyth (Bristol South) (Lab)
I had a little smile to myself at the Minister’s response. When I was a commissioner, we often said to each other, “It’s another A&E plan—it must be winter again.” On Monday, I asked the Secretary of State about the £2.4 billion protection for general practice, and I am afraid that there was not a satisfactory answer and the money will not plug the hospital deficits. There are very severe general practice problems in south Bristol and very worrying reports about sustainability. I am looking forward to the report, but will the hon. Lady say something about the role of general practice in the winter pressures issue?
Dr Wollaston
We have to think of A&E winter pressures as a marker for the whole system. The hon. Lady is absolutely right and I welcome her reference to primary care, because if people cannot get an appointment in primary care, they are more likely to end up in A&E. Luton and Dunstable is now co-locating primary care so that people arriving at the front door who are more appropriately seen there can be seen directly in that setting. There is, however, another viewpoint: co-locating can sometimes end up creating demand, meaning that more people go there directly, so our report calls for better evaluation of the different models. One of the things that Luton and Dunstable does particularly well is apply evaluation at every stage to the changes it makes. The answer is complex, in that co-location may be absolutely the right thing for some systems, but not necessarily the right thing across the board. I absolutely agree with the hon. Lady that people need to have decent, timely access to primary care.
Backbench Business
(8 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text
Leaving the EU: Financial Services
(8 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Deputy Speaker (Mr Lindsay Hoyle)
We have two debates to get through in three hours and 20 minutes, so brevity will help everybody.
Liz Kendall (Leicester West) (Lab)
I beg to move,
That this House has considered the effect of the UK leaving the EU on financial and other professional services.
I start by thanking the Backbench Business Committee for granting this debate and for giving us time on the Floor of the House to discuss this important issue.
The UK’s financial and related professional services are critical to our economy. Together they account for almost 12% of GDP, employ more than 2 million people and contribute £66 billion a year in tax revenues. That is 11% of the total annual tax take, which is the largest contribution of any sector and essential for funding our public services.
While London benefits hugely from those sectors, two thirds of the jobs in financial and professional services are based outside Greater London. Some 160,000 people are employed in Scotland, with Edinburgh’s economy more reliant on financial services than any other UK city, including London. More than 54,000 people are employed in those sectors in Wales. Elsewhere, major employers include Citigroup in Belfast, Deutsche Bank in Birmingham, Aviva in Norwich, American Express in Brighton, and J.P. Morgan in Bournemouth. Overall, there are 22 towns and cities in the UK that each employs more than 10,000 people in financial and professional services, including Manchester, Leeds and Liverpool, Sheffield, Reading and Bristol, and Norwich, Portsmouth and Poole.
James Berry (Kingston and Surbiton) (Con)
Does the hon. Lady agree that keeping the financial services passport is vital for many people who work in the sector, not least a lot of my constituents, and that people in business would be the first to say that in financial negotiations it is not wise to give a running commentary?
Liz Kendall
I agree with the hon. Gentleman’s first point and I will come on to the issue of passporting later. I believe that businesses really want certainty, which is why it is right that hon. Members raise issues in the House.
In my own fabulous city of Leicester, almost 7,000 people are employed in financial and professional services, including by HSBC, Santander and Hastings Direct. Those people are not the extremely wealthy bankers or hedge fund managers that we often read about in the papers. They are ordinary people on modest wages who work in customer services, call centres and office administration, and who pay their taxes and spend their money in the local community.
Sir Desmond Swayne (New Forest West) (Con)
I do not want to diminish the importance of the financial sector, particular that which operates and needs to continue to operate in Europe, but overwhelmingly domestic financial services have no involvement with the continent at all. Their export potential is virtually nil, in the words of the Commission itself. To what extent does the impressive list of employees that the hon. Lady has given divide between those that are involved entirely in the domestic market and those that are involved in transactions overseas?
Liz Kendall
The businesses in my constituency and those that I have talked about so far are deeply concerned about losing their membership of the single market and their passporting rights. I care about those jobs and the contribution that those companies make to our economy. It is right for us to raise questions, and it would be wrong to suggest that leaving the European Union does not give rise to serious concerns.
Mr Ben Bradshaw (Exeter) (Lab)
Does my hon. Friend agree that today’s excellent ruling in the High Court gives the Government a chance to reflect on the invocation of article 50 and the impact that it is already having on the financial services employers to which she refers, particularly with regard to the uncertainty about our future membership of the single market?
Liz Kendall
My right hon. Friend is right. Many companies have been planning for months, even before the referendum, to try to mitigate the risks of Brexit. There is a mandate to leave the European Union, but there is no mandate about the terms. The Court’s decision today should allow this House to have its say, to raise the important issues and to hold the Government to account, and I hope that the Government listen.
Joanna Cherry (Edinburgh South West) (SNP)
In answer to the right hon. Member for New Forest West (Sir Desmond Swayne), does the hon. Lady agree that this is not just about passporting rights, but about the vital regulatory framework that the EU provides for the financial and banking sector?
Liz Kendall
I agree with the hon. and learned Lady, and I will come on to that point later in my speech.
As well as playing a crucial role in our domestic economy, the UK’s financial and professional services have an unrivalled reach and influence across the globe. The UK is the world’s leading exporter of financial services. We have the world’s fourth largest banking sector, third largest insurance industry, second largest fund management sector, and second largest legal services industry.
Many people believe that the British economy is too dependent on financial services and that, despite the significant number of jobs outside the City, that predominantly benefits London and the south-east. I agree. I have long argued that we need to rebalance our economy, develop a modern industrial strategy, and devolve power to our cities, towns and counties to boost jobs and growth in every region, in every part of the UK.
However, strong and effectively regulated financial services are crucial. They directly create jobs and growth, and support employment in related sectors such as legal and accountancy services. They are the bloodstream of the wider economy, pumping money through the country by lending to local businesses. They attract huge levels of inward investment, including about £100 billion over the past decade—more than any other sector—and they are crucial for our pensions and mortgages, and for funding the public services on which we all rely. That is why I am so grateful to the Backbench Business Committee for granting today’s debate, because the decision to leave the European Union has serious implications for the future of this vital sector.
Membership of the single market has brought huge benefits. In particular, it has entitled financial services to use the passport—the mechanism that gives companies the legal right to provide services across the EU, without having to obtain separate authorisation from other member states. Those passports are the foundation of the single market for financial services, and they are essential for investment banks and international insurance companies. Many are now deeply concerned about losing their passporting rights, but I am afraid that some leading hard-line Brexiteers have poured scorn on the idea that we need passporting at all and say that third-country equivalence will do.
Equivalence is when the European Commission recognises that a country’s rules and oversight of a specific area of business are as tough as its own. It is true that some countries outside the EU have been granted equivalence in some areas of financial services, but the Commission is under no obligation to grant it. It can also take years to negotiate, be time-limited, and withdrawn at short notice, and it does not cover areas that are crucial for UK financial services, such as insurance, bank lending and bank deposits.
The new Under-Secretary of State for International Trade and envoy for financial services—I am disappointed that he is not here today—admitted the problems with equivalence in his recent interview with Bloomberg. He said that the UK will probably lose its current legal rights to provide services in the EU after Brexit, and that equivalence will not be “good enough”. He told Bloomberg that the Government want a better version of equivalence, but that in return we may have to accept future EU regulations handed down from Brussels. The problem with that is that we will not have a seat at the table when the EU decides how to regulate our financial services. We will therefore lose our ability to influence regulatory decisions for the better.
The risks of losing our membership of the single market and our passporting rights for financial services are clear. While passporting is permanent, equivalence is precarious. The UK will move from being a rule maker to being a rule taker, and that is not what our financial and professional services want. Although they may hope for the best, they must plan for the worst, and they cannot wait until the last minute to find out what deal they might eventually get. That would not be right for their business, their employees or their customers, who expect them to take action to mitigate any potential risks now. It takes three to five years to move operations to a different country. That is why most international banks, many asset fund managers and other financial services are now working out which operations they might need to move to ensure that they can continue to service their customers, how best to do it, and by when they should do it. The chief executive of Morgan Stanley has said:
“It really isn’t terribly complicated. If we are outside the EU and we don’t have what would be a stable and long-term commitment to access the single market then a lot of the things we do today in London, we’d have to do inside the EU 27”.
Other countries have not been slow to try to exploit the uncertainty. France and Spain have already launched campaigns to lure companies to Paris and Madrid after Brexit. The more likely risk is that some jobs will move to Dublin, Luxembourg or Frankfurt, and even more will move to New York or Asia, unless the Government get their strategy right.
The impact of losing passporting rights and the risks of relying on so-called equivalence are not the only major worries for our financial services. They are also deeply concerned about the Government’s plans for freedom of movement.
Mr Chuka Umunna (Streatham) (Lab)
I congratulate my hon. Friends the Members for Leicester West (Liz Kendall) and for Nottingham East (Chris Leslie) on instigating this excellent debate. Of course, people want financial services to make a bigger contribution to the Exchequer, but they already make a massive contribution, which is why it is right to have this debate.
In respect of the point that my hon. Friend the Member for Leicester West just made about the benefits and other issues beyond passporting, the desire of other EU member states to take part of the City’s market is illustrated by the fact that we have already had a tussle with the European Union over the City’s role as the clearing house for euro-denominated transactions. That has already been the subject of court action. If we leave the single market, it will not simply be a question of access; the likelihood of our losing the ability to be the clearing house for euro-denominated transactions is only likely to increase.
Liz Kendall
My hon. Friend puts that point extremely well. There are a huge number of risks on the issue he raised as well as on access to services, but the Government have so far had virtually nothing to say. Businesses cannot wait to get that certainty. Their regulators, their boards, their customers and their clients want to know what will happen. This will have a huge knock-on effect on the rest of the economy.
Stephen Timms (East Ham) (Lab)
My hon. Friend is making a very important case. If the Government get this wrong and we lose substantial financial services business, is not the likelihood that that business will go to New York? New York has the capacity to take it on and already has the equivalence agreement in place.
Liz Kendall
I cannot read the minds of those in charge of the many companies that are considering those options, but my right hon. Friend is probably right to say that there may be a greater likelihood that New York will benefit, although I think some jobs will move to the EU, too.
Financial services greatly rely on employing people from across Europe and the rest of the world. Many people in the sector were dismayed and, quite frankly, appalled by speeches made during the Conservative party conference. They do not care about where people come from; they care about what people can contribute. They understand that the success of their business depends on getting people with the right skills in the right place at the right time. They know that we cannot somehow separate freedom of movement from what is best for businesses and the wider economy, because the two are inextricably linked. Companies in the sector are clear: if they lose their ability to get the best person for the job, when and where they need that person, they will simply take their work elsewhere.
Even worse, young people just starting out in their careers, such as the 700 apprentices that HSBC takes on each year, may no longer have the chances that they currently do to travel and develop their skills. Brexit risks placing an unnecessary limit on our young people’s ambitions and opportunities.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
The hon. Lady makes an important point. Is she aware of the particular importance of freedom of movement to the so-called Fintech sector? In the region of 30% of chief financial officers and chief executive officers in one of the major expanding areas of our financial services sector come from countries in other parts of the EU. Does that not illustrate what is at stake?
Liz Kendall
It absolutely does. The right hon. Gentleman raises an extremely important point. This growing and developing sector is driven by skilled people from across the globe, and we do not want to miss out on those possibilities.
Norman Lamb (North Norfolk) (LD)
The hon. Lady referred to the rhetoric at the Conservative party conference. Does she agree that such rhetoric causes a reaction, and that the reaction across Europe was wholly negative? That makes the politics all the more difficult as we try to secure a good deal for this country.
Liz Kendall
The right hon. Gentleman is absolutely right. It was a huge strategic mistake for the Prime Minister and the Home Secretary to say what they did at the Conservative party conference. That has not helped us to work better with our EU allies, with whom we need to get a deal. It has made people across the world think that Britain no longer wants people to come here to live and work. It has put off many people who already work in this country and are now thinking about going home.
Businesses in all parts of our economy want certainty, above all. There are things that the Government could be doing to give businesses greater certainty during the inevitably complex, difficult and lengthy process of leaving the EU, and I shall conclude by outlining three of them for the Minister. First, Ministers should set out the broad framework and priorities for their negotiations. Is the objective to secure for financial services their existing rights to trade in the single market; or have Ministers already accepted the loss of passporting rights, as the Trade Minister said in his Bloomberg interview, and do they seek instead to secure a different or hybrid version of passporting or equivalence? What are their objectives on freedom of movement for people working in financial and related professional services? Is this a priority area for the Government in reducing the number of people coming into this country? Do the Government seek to set quotas in this sector, require people to have visas, or both?
Secondly, the Government must commit to a transitional agreement—this has been raised time and again by those who work in financial services—to ensure that there is no cliff edge at the end of the article 50 process. It took four years to reach an equivalence deal on one small aspect of commodity futures dealing with the United States, so it will be impossible to agree a deal covering all the many complex areas of the UK’s financial services industry with the remaining 27 EU countries within two years. Without transitional arrangements, companies may have their passporting rights suddenly removed with nothing put in their place, which would create legal doubt for huge parts of their business. A transitional agreement is therefore essential, and it must come soon. We need at least a joint statement of intent from the UK and the EU before article 50 is triggered to give financial services the certainty they need. That should happen before politicians in France and Germany inevitably start focusing on their own elections next year.
Finally, the Government must make it a priority that they ensure that the remaining EU countries understand the benefits of maintaining an integrated market in financial services. Some £1.1 trillion has been lent to businesses in the remaining 27 countries by banks based in the UK. Putting up barriers to trade would be a self-inflicted wound that would make us all worse off—not just in the UK, but in mainland Europe.
One of the most important complaints I have heard during the past seven years is that nurses and teachers did not cause the financial crisis. That is true, but it was also not the fault of the call centre worker in a big insurance company or the bank teller in the local building society. Plenty of British people do a decent job working in our financial services, and they could be on the front line when it comes to Brexit. The Government must provide more clarity about their plans so that businesses can plan for the future, and so that we protect jobs and growth, and get the best possible deal for Britain.
Several hon. Members rose—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I advise hon. Members that the speaking limit will be five minutes. I hope that we will not have to reduce it, but that might happen as we have very little time left.
Stephen Hammond (Wimbledon) (Con)
I should say at the outset that I am chairman of the all-party group on wholesale financial markets and services, and that I worked in the industry for a few years before I entered the House.
I congratulate the hon. Members for Leicester West (Liz Kendall) and for Nottingham East (Chris Leslie) on securing this incredibly important debate. We are concentrating on an industry in which we have the greatest comparative advantage. It is important for the economy not just because it means that we can help public services, but because, as the hon. Lady pointed out, it is the lifeblood of many other industries. She has set out the facts about how many people it employs. It is the largest taxpaying sector and the largest exporting sector.
The sector is also the one with the largest trade surplus with the European Union. It is absolutely clear that one reason for that is that we have had access to and membership of the single market. London was always a financial centre, but membership of the single market has allowed it to become the undoubted capital for financial services not just in Europe, but arguably in the world. We have had a common set of regulations, we have broken down barriers, we have attracted huge investments, and global operations have moved to Britain. Leaving the single market or losing access to it would be calamitous for the financial services sector.
Some colleagues have argued that immigration was a key reason why we voted to leave the EU on 23 June, and that freedom of movement must therefore be at the forefront of our thoughts. I have heard colleagues argue that we should say to the EU 27, “Trade on these terms or we will leave on WTO terms.” Such an outcome would make access to the single market impossible. That would be hopeless for financial services, because we are already seeing, in both analysis and actuality, the impact of what has happened. The hon. Member for Streatham (Mr Umunna), who is no longer in the Chamber, mentioned euro clearing. We have already seen euro clearing for currency dealing leaving London, and euro clearing for securities would leave as well. As the hon. Member for Leicester West pointed out, many institutions are drawing up contingency plans for that.
Last night, I attended a meeting of the National Institute of Economic and Social Research. Its most recent analysis shows that if we leave the EU on just WTO terms, which exclude most financial services, London would lose 60% of financial services business with the EU. I do not think that anyone, whatever their view, would regard that as anything other than a calamitous result.
The hon. Lady was right to concentrate on passporting. Passporting is necessary. It is not just a case of putting up a brass plaque on a door somewhere else in Europe; since the change in financial regulations, there is much more to it than that. It would be much more difficult to establish trade functions across Europe if we gave up passporting. The Chancellor told the Treasury Committee two weeks ago that he accepted the importance of passporting, and I hope the Economic Secretary will assure us that the Government recognise that.
Passporting is not only important for the banking industry. The Association of British Insurers put out a brief this week—I also met its representatives this week—about the ability of businesses throughout the UK to carry out insurance business across the world, and how they will be unable to do that if we lose passporting.
Sir William Cash (Stone) (Con)
I am sure my hon. Friend is aware that there is not a single market in insurance, and that 87% of all insurers operate through subsidiaries in the EU, rather than in branches dependent on passporting?
Stephen Hammond
My hon. Friend would be right to claim that about asset management, but I think he is confusing the two industries. The London Market Group said this week that although the number is not as high as that for banking, the amount of business done in the EU is substantially higher than the number my hon. Friend cites. I am happy to ask the LMG to come and discuss that with him.
If the Government are prepared to be rational, a solution can be negotiated, and that is what many people will want to get out of this debate. We might be able to have cross-industry work visas that would involve some limit on access—that would fulfil the requirement of those who want to control freedom of movement—but would also allow us some access to the single market.
As the hon. Member for Leicester West pointed out, an equivalence regime would need to be established, but such regimes are fraught with difficulty. The issue is whether we could establish a bilateral equivalence regime similar to what we have with America. A regime dominated by the European Court of Justice would not be satisfactory for the financial services industry and would wind back our prospects substantially. I would have liked to have said more about that, but I will heed the strictures of the Chair.
It is absolutely clear that the Government must give some guidance on transitional arrangements. The industry cannot wait for the end of the article 50 process. This is a bridge: the Government might not be able to set out exactly where we are going, but they must show that they understand the importance of financial services to this country and our position globally by giving the sector some certainty that after the article 50 period—it is unlikely we will be able to do a deal within two years—they will have transitional arrangements in place. That would mean that wherever we end up, the financial services sector can start its journey over the bridge.
I have no doubt that the Prime Minister and the Economic Secretary understand the importance of this industry to our country. I also have no doubt that we can negotiate a hybrid deal through which we can retain jobs and maintain London as Europe’s financial centre.
Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)
I congratulate my hon. Friend the Member for Leicester West (Liz Kendall) on securing this debate. It is most important that we set the right tone for it: we must not let the events of 2008, with scandals about bankers’ bonuses and so on and so forth, detract in any way from the economic significance of this sector for this country.
My hon. Friend outlined many of the economic statistics underlining that argument, but we must be quite clear that, with more than 2 million people employed in the sector—not least the 300,000 people in my neighbouring town of Birmingham in the west midlands, where about 10% of jobs are dependent on this and related industries—it is hugely important for employment. It is also hugely important to the many people who benefit from the financial and insurance services that this industry delivers, and to the recipients of domestic or business loans who depend on it for the quality of their standard of living or for the economic performance of their area.
My hon. Friend has outlined the significance of passporting. I would like to amplify that. It is very interesting that a country such as Switzerland, which is synonymous with finance and financial management, has no passporting rights in the EU and, as a result, bases many of its companies and activities in London in order to get that access to the EU. The fact that one of the historical major global financial centres of the world is working through London to access the system underlines the sheer strategic importance of our maintaining our access in the negotiations.
I have heard the argument that because more EU companies use passporting to gain access to the UK than the other way around there is an equivalence of interest—the “we’ll be all right on the night” argument. But that does not take into account the fact that the negotiations will be carried out by politicians looking at political issues rather than company representatives looking at the bottom line of their finances. It could well be that issues such as the single market will be debated and negotiated in such a way that other EU countries will use them as the justification for refusing access to passporting.
My hon. Friend the Member for Leicester West outlined the significance of the free movement of labour in the financial services industry. We could end up hitting ourselves twice—first by objecting to free movement of labour, which would be damaging to the financial services industry, and then by having that objection used by EU negotiators as a justification for ending the passport regime. The Government have to handle this incredibly delicately, with maximum support from the financial services industry, to arrive at a solution that will not be doubly damaging to the industry.
In the short time remaining I will mention something that is perhaps not so directly relevant to passporting within the EU but is relevant to financial provision in this country. The mutual sector contains companies that are often small and do not have or need passporting because they do not trade in Europe. Those companies have often been burdened by what they perceive as an EU-level of regulation. Now, I often think that it is our own regulators who needlessly apply the regulation, but that is a different debate. However, on coming out of the EU the argument about EU regulation can no longer be used. I look forward to seeing this country looking at its regulatory regime for those companies that trade only domestically and do not have or need passports, to ensure that we develop a regulatory system that is far more proportionate, and enables small financial services to thrive and provide better consumer options.
Sir William Cash (Stone) (Con)
There seems to me to be a great deal of overstatement and exaggeration in this arena. The media have tended to overstate difficulties in this area to a very significant extent.
This is about confidence. For nearly 400 years, up to our entry to the EU under the European Communities Act 1972, the United Kingdom was able to run one of the most effective—if not the most effective—financial services centres, the City of London. The idea that somehow or other, because of the intervention of the European Union, things will get better is completely outweighed by the disaster area and dysfunctionality that the EU now represents.
Only a few days ago, in Bratislava, I heard the chairman of the European Parliament’s Committee on Budgets saying that the EU needed an “electric shock”, that there was far too much regulation, that it was far too intrusive, and so on. The chairman of ECOFIN said that the EU was facing the biggest economic and political crisis in modern political history. All that is true. The idea that we would not have to leave the European Union—thank heavens the British people made their own judgment about that—and the construal of our leaving the European Union as a disaster in itself simply belie the facts.
The reality is that EU legislation is deeply embedded in the financial services sector. Just to state the obvious, not only are we obliged under sections 2 and 3 of the 1972 Act to absorb all the legislation—I warned in a letter to the Financial Times in 2008 that that would lead to the kind of difficulties we are now experiencing with regard to financial services—but because of the Court of Justice we have to obey all the regulations. The massive regulatory overkill of the whole of the financial services sector as a result of that arrangement is an undoubted disadvantage. There are huge benefits to be gained by being outside the European Union, which I will come to in a moment.
George Kerevan (East Lothian) (SNP)
Surely the hon. Gentleman is aware that most EU bank regulation—especially since 2008—has been at the behest of the G20, so we will be subject to it whether we are in the EU or not.
Sir William Cash
The problem that the hon. Gentleman has perhaps not quite taken on board is that because of the European Communities Act there is a legislative requirement for us to accept those rules. Outside, we will, I hope, be able to benefit not only the United Kingdom but the EU, as I will come on to in a moment.
We only have to look at places such as Singapore and Hong Kong to understand that one does not have to be in the European Union to have a successful financial services sector and compete in the global marketplace. The same applies to New York. The objective must be to keep the financial markets open throughout the European Union as a matter of mutual concern throughout the UK and the other 27 member states. Breaking up the London system would involve much greater costs for everyone. Europe would end up far worse off, in my judgment—and that of many others, too—if the financial sector migrated to New York, Singapore or Hong Kong.
The passport is not specific to any one aspect of the financial services field. It works best in relation to banking accounting for about a fifth of annual banking sector revenue. It works less well in relation to asset management, which my hon. Friend the Member for Wimbledon (Stephen Hammond) mentioned. It is vital to understand that there are subsidiaries set up all over Europe carrying on the business of other countries irrespective of a passport. A significant amount of EU assets are already in Dublin and Luxembourg and their management—this is the key issue—is run from the UK. Indeed, on a recent assessment I have read, only 7% of assets managed in the UK are thought to be threatened by the loss of the passport.
There is not a single market in insurance at all. I appreciate that my hon. Friend might wish to come back to me on that, and I am very happy to talk to the people he mentioned in reply to me, but I simply make the point that we are not always dependent on the passport. There is a special problem regarding Lloyd’s of London, but I am informed that the pool of underwriters across the EU amounts to only 11% of the market’s gross written premium, and only 3% is directly reliant on the passport.
We have three main alternatives: equivalence, bespoke agreements and local arrangements. Equivalence is granted by the European Commission. The Commission is guardian of the treaties and has the legal clout that we will get away from when we vote to leave, so equivalence would not apply to us if we left the EU. But we have the same regulations as the EU, and under the repeal Bill, which I put together just before the referendum and am glad the Government are so interested in, we would be able to run parallel operations where it was in our mutual interests to have regulatory arrangements in the UK equivalent to those elsewhere in the EU—and, indeed, internationally, as well.
As regards bespoke agreements, we have the potential to secure an agreement similar to that with Switzerland, for example. If no cross-border access arrangement is made, firms will still be able to set up subsidiaries. That would, I have to admit, cost money, but it would not be disproportionate. I do not want to go into the details of a private conversation so I will simply say that I got that straight from some very senior bankers the other day. It boils down to this: we can arrive at an arrangement similar to Switzerland’s or at a free trade agreement. Of the two, I must admit I prefer the latter.
Alison McGovern (Wirral South) (Lab)
I congratulate my hon. Friends the Members for Nottingham East (Chris Leslie) and for Leicester West (Liz Kendall) on achieving this Backbench Business debate. Unsurprisingly, I agree very much with the contribution made by the latter.
I shall speak specifically about financial services outside London and the south-east. [Interruption.] I seem to have infinite time, which is fine.
I want to say three things: first, to correct an impression about who we talk about when we think of financial service; secondly, to correct an impression about globalisation and trade; and finally to correct an impression about what is required of the Government in face of Brexit in financial services and the broader economy.
As my hon. Friend the Member for Leicester West said, too often there is an easy, knee-jerk reaction when we think about financial services. People bang on about bankers, but people who work in financial services are not who we might think they are. They are ordinary working people from around the country. I was blessed to be able to find that out in person when I served as shadow City Minister for my party last summer. Several financial services companies were good enough to welcome me through their doors to shadow members of their workforce. It was absolutely fascinating. In cities, none of which was London, I sat with people working in financial services, including insurance and pensions, and talked to them about their daily lives. They worked incredibly hard serving their customers—the British public and exporting businesses.
I was struck by the story told to me by one set of workers who were recalling the global financial crisis. They were told by their manager: “Just don’t mention what you do when you go down the pub after work.” Nobody in our country should have to do that. Nobody should be made to feel ashamed of what they do. I am a Labour MP for a reason, and that is it. We should never engage in language that seeks to condemn people simply because of their employment.
I was also struck by the passion with which those in the insurance industry fought fraud and tried to get people a better deal. Those people deserve Members’ support and backing. This is not a London issue. We might call it the “City of London”, but 11,000 people in Belfast; 54,000 people across the north in Leeds, Liverpool and Manchester; 58,000 people in Edinburgh and Glasgow; 10,000 people in Sheffield; and 4,000 people in Norwich do a good day’s work for a good day’s pay and need our backing.
Andy Slaughter (Hammersmith) (Lab)
My hon. Friend is absolutely right that this is a national issue, but I hope she acknowledges the work the Mayor of London has done in drawing attention to the importance of financial services. It would be curious if London were not represented on a Brexit Cabinet sub-committee but the other countries and regions were.
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. I appreciate that the hon. Member for Wirral South (Alison McGovern) is in some difficulty because the clock is broken, but she is handling it with great competence. I have been watching. She has taken an intervention and can speak until about 2.25 pm and 30 seconds. I thank her for dealing with the matter so well.
Alison McGovern
Thank you, Madam Deputy Speaker. I will do my best.
I thank my hon. Friend for his intervention. I am happier to support the words of the current Mayor of London than those of the previous one, who said that no one could deny that London is the engine of our economy. In financial services, as with everything else, our regions should be on equal footing. One should not be over another. It is a fact that London has extra lobbying capacity because Parliament is located in the city, so a corrective is necessary.
The second point on which I want to correct people’s impressions is that, although the hon. Member for Wimbledon (Stephen Hammond) is right to talk about competitive advantage, which matters, when we talk about globalisation and international markets, not least in the financial service sector, we are talking not necessarily about increased trade but about increased multinationalism. Companies stretch themselves much more over borders, which is why I still believe that our membership of the European Union was important. I accept the result of the referendum, but when we have multinational companies, we need to be involved in global governance so that we can protect the people who work for them in our country. The 1,000 people who work for Santander in Bootle and the 1,000 people who work for Merrill Lynch in Chester work for global companies. They therefore need global protection and global response. I hope that goes some way to answer the points made by the hon. Member for Stone (Sir William Cash), although no doubt he will not agree.
Finally and very briefly, we need to correct the impression of what is required. Passporting is absolutely crucial, as has been described by several Members, but it is not just that. The concentration of financial services in our country’s economy has meant that London has overheated for far too long. Financial services outside London have another crucial role. Building societies and the mutuals sector have been mentioned. We need to use our financial services outside London and the south-east to partner with Government to improve infrastructure investment and investment in small and medium-sized enterprises. Forty-two per cent. of start-ups happen in London and the south-east, which is simply not good enough. That is why I ask the Government not only for passporting but for rebalancing by supporting our financial services.
Tom Tugendhat (Tonbridge and Malling) (Con)
The clock is back. The excitement! The hare is running!
I should briefly declare an interest. I have at times worked in the financial services industry. I draw Members’ attention to my entry in the Register of Members’ Financial Interests.
Like so many other hon. Members, I am here to talk about financial services outside the capital. I pay tribute to the hon. Member for Leicester West (Liz Kendall), who spoke very powerfully about that. In my constituency, I drive past the Fidelity asset management centre, which is based in Hildenborough and employs nearly 1,000 people. Financial services also support economies such as the legal economy, accountancy and various other innovators. As we have discovered from the success of start-ups in the United States, access to financial services is often a trigger for improvements in the tech sector.
Robert Neill (Bromley and Chislehurst) (Con)
I apologise for not being in the Chamber earlier because of Select Committee duties. Does my hon. Friend concede that it is important that we link access to financial services with access to other professional services including legal services, which are critical to building the infrastructure backing up the financial services sector?
Tom Tugendhat
My hon. Friend makes an extremely good point and I will let it rest there.
Access to financial services is not just about the financial services industry but about all industries. Finance greases the wheels of the whole economy. It is important that we maintain the access we have in the UK. I therefore urge hon. Members to see Brexit not just as a threat, which sadly so many people do, but also as an opportunity. The United Kingdom used to be extremely good at taking the opportunity to innovate. Too often we have limited ourselves. Many people will look at the potential loss from the eurobond clearing and various other elements, but we should also look at the potential openings in financial technology, where we have already seen such innovations in the UK, to which I hope we agree we can add.
Services here in the UK are built on the foundation of skills that support the current industry and that will support future growth. Tomorrow’s growth will be based on those same skills, which come from a highly educated, highly literate and highly open population of people across our islands, whose languages, ethnicity and cultural links tie them around the world. They are able not only to do deals but to finance and enable entrepreneurs and businesses around the world. That is why I am less concerned than some about the potential closing off in markets in the European Union. We must remember that the EU itself depends on the City of London and that the depth of asset pools in the City gives the industries of Germany, Italy and France a reach they would not get from their own domestic markets. It gives them an opening to other financial sources around the world, including east Asia, that they would not get from Milan, the Paris Bourse or the Frankfurt exchange. I know that the Minister, who is in his place, will see this as a good deal for both parties, as all good deals should be, because the EU and Britain have a common interest.
Having that common interest requires us to remember who we are. It requires us to remember that we, here in the United Kingdom, are in so many ways more than the sum of our parts. We define ourselves not by the nations we come from, but by what we give together. I mean this very seriously. In so many countries in the world, people define themselves as a “something-something”. In the United States, for example, people often define themselves as a Polish-American or an Irish-American. I, who am the son of a French woman, the grandson of an Austrian man and an Irishwoman, do not define myself by that. I define myself as British, as so many people here do. It is that openness and inclusivity that has made Britain the home for so many and the centre for so much.
That is why, when we look at the financial industry, we must not look at it alone, or indeed just consider the legal and accountancy aspect. We should not even consider its enablement of other industries. We should consider the ethos it requires. That ethos is the ethos that we have promoted on these islands for a thousand years. It is one that defines people by the breadth of their experience, skill and knowledge, and not in a narrow sectarian definition of origins or passports. It is much greater than that.
I will leave it there and urge the Minister, as he takes the negotiations forward and sits around the Government table, to see that the financial services around our whole country, particularly in the great kingdom of Kent, are not just a simple route to enrichment, but an avenue to openness, growth and the support of what the UK has always been: a beacon to other nations, an island of safety and in many ways an example to all to enrich all.
Joanna Cherry (Edinburgh South West) (SNP)
I rise to speak about the impact of leaving the European Union on the financial sector and the legal profession, with particular reference to my constituency.
An estimated 7,000 of my constituents are employed in the financial services sector. Across the whole city of Edinburgh, there are 34,800 people employed in financial services. Edinburgh is the UK’s second-largest financial centre. It is a major European centre for asset management and asset servicing, and home to the global headquarters of the Royal Bank of Scotland and the UK headquarters of the Green Investment Bank. Edinburgh is the UK’s largest financial capital centre after London by both gross value added and employment. The financial sector in Edinburgh also supports many other jobs in the service sector. Some of the best coffee shops, sandwich shops and restaurants are in my constituency, supplying constituents who work in the financial and legal sectors.
Very worryingly, earlier this week an independent report for the Scottish Parliament’s Economy Committee revealed that Edinburgh’s reliance on financial services is greater than that in any other city in Europe. Therefore, Edinburgh is at most risk of being affected if we lose the protection hon. Members have been speaking about. I pause to pay tribute to those hon. Members who secured this debate.
There are serious concerns about the potential for lost jobs and business if there is a loss of full access to the single market. Leading economists gave evidence to members of the Scottish Parliament on Tuesday on the impact that Brexit and leaving the single market would have on Scotland’s economy. Across Scotland, the financial sector directly and indirectly employs almost 200,000 people, 20,000 of whom are European Union workers. It contributes £8 billion to the economy of Scotland. In fact, Edinburgh’s economy is more reliant on financial services than London’s economy, or indeed any other city’s economy in the UK. As I said earlier, if we look at Edinburgh’s share of financial services, we see that it is markedly ahead of most large European cities.
Kirsty Blackman (Aberdeen North) (SNP)
Is my hon. and learned Friend concerned that the Scottish asset management sector is bigger than that in Frankfurt and in Paris put together? We stand to lose out significantly.
Joanna Cherry
Yes, I am concerned about that. Edinburgh’s reliance on financial services is 23.8%, compared with 18.9% in London, 17.3% in Brussels and 17% in Amsterdam. By comparison, Glasgow’s financial services sector is worth about 12.4% to its economy.
This is not fearmongering. Paris and Frankfurt are already angling for some of the jobs that may leave London and Edinburgh if we leave the single market. I attended a briefing last week at which the Irish ambassador spoke. He pointed out that while Britain leaving the European Union poses some problems for the Republic of Ireland, it will also provide some fantastic opportunities for Dublin to attract jobs that we really need in our financial sectors across the UK. In Edinburgh, we really want to hang on to those jobs.
I am happy to say that a lot of people in my constituency are employed in legal and accounting services, which is what I used to do before I came to this place. More than 3,000 of my constituents are employed in the legal services sector. Across Edinburgh, that figure for the legal and accounting sector is closer to 10,000. The Law Society of Scotland has its headquarters in my constituency, and the Faculty of Advocates, of which I am non-practising member, has its headquarters in the neighbouring constituency of Edinburgh East. A lot of lawyers and other people who work in law firms live in my constituency and are worried about the impact of Brexit on legal services. There are many aspects of EU law that have particular relevance to the legal system and professions, including the directive on the mutual recognition of diplomas, the lawyers establishment directive and the lawyers cross-border provision of services directive.
Sir William Cash
Does the hon. and learned Lady recognise—I imagine she might—that there is a certain circularity in her argument? It is not surprising that the legal profession inside the European Union, which is concerned about European law, would want to protect that particular part of their activities. She could perhaps be a little more generous in understanding that those who want to leave might actually end up with laws that are made in this place.
Joanna Cherry
That is not what I am actually talking about. I am talking about the way in which European Union law has enabled Scots lawyers, English lawyers and lawyers across these islands to practise across Europe not for their benefit but for the benefit of their clients. That is the point. It is also to the benefit, as earlier speakers pointed out, of the financial services sector and to the British economy in general. This is not naked self-interest on the part of the lawyers. Lawyers depend on their clients to make a living. If lawyers are not able to practise across Europe easily, they will not be able to provide such a good service to their clients. That does not just apply in the financial sector. It covers all sorts of areas, including, very importantly, child and family law.
In Scotland, the Law Society of Scotland will be urging the UK Government and the Scottish Government to argue in negotiations that the current arrangements for lawyers to be able to practise in the European Union should be retained. It would be very disappointing if the only route for lawyers to be able to practise in Europe in future would be to requalify in other EU jurisdictions and go through the cumbersome processes that we have done away with as one of the many benefits of being in the EU.
Clearly, the best way to protect the legal and financial services in my constituency and in the city of Edinburgh is to remain part of the single market. That would be the easiest way to give comfort to those sectors. Of course, we are not able to give any comfort to those sectors, because the Government “do not want to give a running commentary”. However, it appears, as the result of a legal decision today, that the Government may in due course be forced to come to this democratically elected Chamber and tell us a little bit more about what their plans are. It is worthy of comment that that is not as a result of European judges sitting in Brussels, Luxembourg or Strasbourg. It is the result of English judges sitting in London. As a Scots lawyer, I wish to pay tribute to those English judges for the decision they have reached.
Tom Tugendhat
Of course, a few judges sitting in Belfast came out with a slightly different decision, as the hon. and learned Lady may be aware.
Joanna Cherry
Ultimately, it will be for the Supreme Court of the United Kingdom to decide, and it includes, of course, two very senior Scottish judges. I believe that the Supreme Court has already allocated a few days in December. I read that the full Bench will sit, so the Scottish judges will be there as well. The Scottish Government have said that it is very likely that Scotland will intervene in that case, and I have every confidence that the Supreme Court will reach the right decision.
Several hon. Members rose—
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. I am afraid that I shall have to reduce the time limit to four minutes: everyone has taken considerably more than five minutes because of interesting interventions.
Chris Evans (Islwyn) (Lab/Co-op)
I begin by congratulating my hon. Friends the Members for Nottingham East (Chris Leslie) and for Leicester West (Liz Kendall) on bringing forth this timely debate. They are both known as having been huge talents, and their absence from the Front Bench is unfortunate.
I come to this debate with a sense of frustration. Like the hon. Member for Tonbridge and Malling (Tom Tugendhat), I worked in financial services for a number of years before I came to this place. I get frustrated when I hear politicians characterising bankers as greedy, yacht-going men who live in high-rise apartments, looking for ways to rip off the British public to make themselves even richer. That is not my experience of the banking system, and it is not the experience of the people I meet in my constituency, such as those who work on the high street in Blackwood or people such as Jonathan Brenchley from Barclays, a community relations manager who works hard to improve community relations. I recently had a meeting with NatWest, which is trying to improve IT and promote small IT businesses so that they can grow in Wales.
It is true that financial services are the largest exporters in the world. Some 11.8% of our GDP is in the financial and related sectors. The financial industry employs over 2 million people, and not all of them are based in the City of London. It employs one in 14 people in the UK on average, and two thirds of them are based outside Greater London. In Wales, for example, 54,300 people are employed by the financial and professional services industry. These are people who really believe in their companies; they have a buy-in, and they want to provide the best possible customer service. That is why I am concerned.
Before the referendum of April 2016, PricewaterhouseCoopers conducted an analysis of what effect leaving the European Union would have on the financial services sector. The outcome was grim, forecasting that leaving would result in the loss of 70,000 to 100,000 jobs by 2020, with a slight recovery over time, but remaining with a loss of 10,000 to 30,000 jobs by 2030.
As we have heard, work in the financial services industry involves helping businesses to grow and individual people to reach their potential. Suffice it to say, it is the base industry for everything in this country. The prospect of the UK leaving the EU is a real threat to the financial services industry. Our financial services industry does not operate in a vacuum; rather, it relies on international trade and the flow of capital around the world and particularly the EU.
At the moment, the sector makes extensive use of passporting, as we heard from my hon. Friend the Member for Leicester West. The Treasury Committee’s publication of figures from the Financial Conduct Authority shows that 5,476 companies registered here in the UK depend on these passport rights to do business with the EU.
Sir William Cash
In the light of the hon. Gentleman’s condemnation of the vote to leave, will he remind us how his constituents voted in the referendum?
Chris Evans
The hon. Gentleman has spent 30 to 40 years in this House going on about the European Union. All his birthdays must have come at once on 23 June—that is all I can say! [Interruption.] He knows the answer very well. I think he is trying to create a bit of mischief for me.
Essentially, we need to ask whether this will mean the loss of passport rights. What structures will be put in place to allow people to continue doing business and paying their taxes? Banks and the financial service industry simply need to know that.
I am short of time, but let me say that my second key concern that generates uncertainty is the extent of EU-originated law that now governs financial services. The law itself, of course, is not the issue, but what replaces it and the process by which it will happen is still a mystery. It is hard to find reliable information to quantify the extent to which EU law governs the UK financial services sector. However, since the EU implements many international regulations and agreements relating to the financial services sector and the UK relies on that body of law, leaving the EU can raise questions.
Ultimately—I am running short of time—it is no good for the Prime Minister to come here and, when she is challenged, to say every week, “Brexit means Brexit.” It is no good her saying that she is not going to give a running commentary on the negotiations either. The financial services industry needs certainty. It needs to move on, and it is time that the Government came up with some answers to the questions I have raised today.
Kirsty Blackman (Aberdeen North) (SNP)
Members may be surprised to discover that I am not going to focus on what happens outside the City of London. It is important to talk about the City of London, and not just the areas outside it. What happens in the City of London benefits the whole of the UK’s economy. Whether or not Scotland is independent by the time that Brexit happens, it will still be really important for us that there is a strong financial services structure in the UK.
Kirsty Blackman
Not right now; I do not have much time.
I have a couple of points to make, starting with the issue of capital flight and passporting, which has been widely mentioned. As the hon. Member for Leicester West (Liz Kendall) said, passporting is important because banks have to make these decisions now. They have to make them today. They cannot wait for the Government to mess about while they come up with deals on Brexit. The structural decisions have to be made now, because it takes a number of months and years for these things to happen. Banks do not have the luxury of being able to wait until two years down the line when the Brexit negotiations are concluded to discover whether or not there is a cliff-edge at that stage. They need to make those decisions now. When we hear that the Government are not going to give a running commentary, it means that banks have to take those decisions now, and it is disadvantaging the whole of the UK as a result.
I understand that it is difficult for the Government to provide certainty. They do not yet have certainty even on what language the negotiations will be conducted in, let alone anything else about them. It is unlikely that we will reach a position where we have certainty by the end of the two-year period. That is why organisations such as the London Market Group are suggesting that what the Government need to do as a matter of urgency is to agree transitional arrangements. It represents insurers, who generate over 20% of the City of London’s total income. What it says they need is financial regulatory certainty and transitional arrangements for five years post-Brexit in order not to severely disadvantage the insurance industry. Five years post-Brexit is a very long time, and the Government have not given them any certainty at this point in time.
Clearing is the other really important issue that I want to talk about. The London Clearing House is a huge success story for the City of London, and it has become very important. Clearing is the process through which risk in the financial markets is managed. It catalyses growth by helping to manage that risk, and it is central to the UK’s delivery of the G20 post-crisis legislative framework. Our financial markets are less risky and better regulated as a result of having so much of the clearing house function based in the UK.
There are conversations about euro-denominated currencies moving from London, but we will lose not just euro-denominated currencies. The London Stock Exchange Group and the London Clearing House work in 17 currencies, and the only reason the London Clearing House has such a large market share and is so successful is its access to all those currencies. If euro-denominated clearing is moved from London to New York—and let us not kid ourselves that it will move anywhere else—we, the United Kingdom and the whole of Europe, will lose out. As a matter of urgency, the UK Government need to secure agreement from the European countries that euro-denominated clearing will not be removed from London. The clearing house function supports 100,000 jobs in the United Kingdom. It is not true that, as the Chancellor said recently,
“in terms of…jobs and value…it is a relatively small part of the total.”—[Official Report, 25 October 2016; Vol. 626, c. 149.]
A huge amount of the market, and City of London services, rely on the clearing house function, and the Government must prioritise it.
Chris Leslie (Nottingham East) (Lab/Co-op)
Let me begin by welcoming the ruling that Parliament should be sovereign in this area as in others. That does not mean that Brexit will not proceed; as was pointed out by my hon. Friend the Member for Leicester West (Liz Kendall), we have a duty to honour the will of the British people. However, as elected representatives, we also have a duty to ensure that article 50 is triggered in the right way and at the right time, safeguarding the best interests of this country. The referendum was clear about the act of triggering article 50, but it was silent on when that should happen and with what safeguards. I think that it is important for us in Parliament to stand up, as we are today, and, rather than leaving these issues to the Crown prerogative and to Ministers, to do our duty when it comes to this particular question.
I do not believe that there can be many other sectors as large as the financial services sector. It produces 12% of our economic output and millions of jobs: in Nottingham alone, 500 firms deal in financial services. Many Members have drawn attention to the significance of the sector, whose scale is very obvious. However, I think that there is some confusion among Conservative Members, particularly the hon. Member for Stone (Sir William Cash). The hon. Gentleman seemed to be saying, “Oh well, we can leave the European Union and it will all be fine. We will just muddle through. We will find our way to a sort of happy equilibrium where everything will be fine.” He is wrong, because the other 27 countries in Europe are massive markets for our industries and for those who are employed in the financial services sector in this country. The hon. Gentleman and others need to realise that it is not just a question of leaving the EU and then facing tariffs of 10% or 20%; it is a question of whether we will have a legal right to trade in those products at all with those other 27 countries.
Chris Leslie
I do not have time to give way to the hon. Gentleman. Well, I may do so if I am tempted. The clock stopped after he spoke, and it felt like the 19th century.
Let me read out to the hon. Gentleman a list of the products that will be banned after April 2019, the time at which we would be out of the European Union. It will no longer be possible to trade in these services with the other 27 countries unless we secure a transitional arrangement or some solution from the Government.
There will be no deposit taking, regulated commercial lending services, trade finance, finance leasing, regulated receivables financing such as factoring, derivatives, hedging services, credit card services, payment services, consumer credit, mortgage lending, equity and debt capital markets, fixed income secondary market trading, regulated foreign exchange spot and forward trading, securitisation, regulated commodities trading, or clearing and executing brokerage. It will be illegal for British-based firms to trade into those 27 countries after April 2019 unless the Government manage to secure a decent deal.
The challenge to the Minister, who has already heard it from many Members on both sides of the House, is yes, to focus on the right solutions—automatic access rights to the single market must be our goal—but before we reach that stage, in January or February, he must start to ensure that we have some evidence on the transitional arrangement talks. A transitional arrangement must begin before we trigger article 50, in the reporting season, so that banks and other financial institutions can plan ahead. If the Government do not give a clear commitment to seeking a transitional arrangement, we will find that those financial institutions have a “stick or twist” option. Do they stay and risk it, hoping that something will crop up after 2019, or do they twist, leave the UK and try to locate elsewhere? That is too much of a gamble. It should not be so binary. I hope that Ministers will think very seriously about doing the right thing for the sector and those who are employed in it.
George Kerevan (East Lothian) (SNP)
Let me begin, as others have, by commending the hon. Member for Leicester West (Liz Kendall) for securing the debate. Let me also commend her for summing up everything that I think Opposition Members, as well as many Conservative Back Benchers, believe about the nature of the problems that will face the financial sector post-Brexit. If there were any political justice, the moment that the hon. Lady had finished speaking the Minister would have stood up and agreed with everything that she had said. That would have been the end of it, and we could have gone on to actually solve some of these problems. Sadly, though, the Minister did not do that. We are faced with a situation in which the UK’s major industry, in terms of employment, taxes raised and the nature of our links with the rest of the world—it is a key strategic industry—is left blowing in the wind, waiting to find out what happens.
I always listen with great interest to what the hon. Member for Stone (Sir William Cash) says because he is forensic and thinks things through. He came up with a whole series of fixes—sticking plasters—that could be applied so that the financial sector could legally maintain its markets in Europe. However, I put it to him and those who agree with his line of argument that there is a problem: since 2008, the UK financial sector has been in a special place compared with many other industries. It has had to undergo massive regulatory change, which has produced massive uncertainty in the industry. That process has not yet fully played out. We still have to get to 2019 before we will have implemented all the Vickers proposals on ring-fencing, so the banks are in a major process of reorganisation. Many Members have been to bank headquarters in the City and know that the situation on the ground is very complex. To add to that process of uncertainty, we have another period of uncertainty when the institutions will not even know whether they have the right to trade any longer in the rest of Europe, and that is a step too far.
We all know what the Minister will say when he makes his speech as he has come along to a number of such debates. He will done a fine job of not telling us anything. He will say we cannot have constant reporting on negotiations, but we are not asking for that. Instead, we are saying that given the unique uncertainties in a major industry that is undergoing massive regulatory change, the Government must put forward a transitional period. It must tell the financial institutions, “Yes, we have a transitional period. We will put down a time period, and it will go beyond 2019, when the Vickers proposals bed in.” That would allow everyone to calm down. If the Minister will not do that and instead maintains the silence, the Government will be adding to the regulatory uncertainties that are piling up on the industry.
Joanna Cherry
My hon. Friend talks about the uncertainty that is caused by the Government saying that they will not give a running commentary. Does he agree with the First Minister of Scotland that the Government are refusing to give a running commentary and to allow a vote in this House not for reasons of high constitutional principle, but because they do not have a coherent position, and they know that if they come to this House, that fact will be exposed?
George Kerevan
It would be my guess that the Government’s silence may just cover up a lack of strategic vision.
I also want to address a point raised in an intervention by the right hon. Member for New Forest West (Sir Desmond Swayne). He said that only about a fifth of revenues from the UK financial sector come from Europe and that we have a huge domestic sector, particularly in retail banking, so we should not exaggerate the crisis in the financial sector that might emerge due to Brexit. I have an answer to that: the problem is that the strategic sectors of banking, particularly high-value investment banking, which is where the profits are, do relate to Europe, and the threat is not from Paris or Frankfurt, but from Wall Street.
I have no wish to force US banks out of the City of London, but the banking community that has gained most since 2008, and that has consolidated and expanded its market share, is the major US banks, particularly the five big investment banks. They have increased their market share in London and Europe while European investment banks are in major decline—Deutsche Bank is in financial trouble, as are the Swiss investment banks, and all we are left with is the European champions, Barclays. If we break up the European financial family in another period of uncertainty, all we will do is strengthen the arm of the US investment banks, and behind them is a whole series of other US financial institutions that are coming into Europe.
US private equity has driven a coach and horses through traditional German bank lending at a regional level. For example, Cerberus is coming in and using a network of Cerberus companies across Europe to buy its way into European property by buying distressed debt. It is using the fact that it can play off one of its divisions against another through transfer pricing to take a gain in taxation. The real threat to our banking system is that, unless we get a grip, Wall Street and the American banks will dominate it. The right hon. Member for New Forest West suggested that the British domestic market was strong enough to survive whatever happens in the next few years, but that is not true. As we weaken the entire European banking family, we open up the possibility that the British retail banking system, which has retreated into its own domestic market, will be very much weakened when it comes to further American competition.
We need a solution to the passporting issue. The Minister will probably not respond to my proposal today, but I will put it on record anyway. The Scottish Government are seeking to maintain Scotland’s position within the single market, and I want to make it very plain that we would do that while being part of the United Kingdom. The UK Government have already done a side deal with Nissan and said that they will keep an open border between Northern Ireland and Ireland, so side deals—by industry and by region—are already out there. If Scotland were allowed to stay in the single market as part of the United Kingdom, that would give us a solution to the passporting problem. British banks could use their offices in Edinburgh and Glasgow to continue to trade with Europe because they would have the passport, and the Treasury would still be able to tax their profits because they would still be in the UK. The alternative is that the major European and American banks will move their nameplates to Dublin and Frankfurt, and the bulk of the business will be run from New York. We need a solution, and one solution would be to accept the Scottish Government’s proposal—or at least give an assurance that it will be thought through, rather than instantly dismissed—that Scotland should remain within the single market.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
It is a pleasure to contribute to what has been an excellent, thoughtful and timely discussion. I congratulate my hon. Friends the Members for Leicester West (Liz Kendall) and for Nottingham East (Chris Leslie) on securing this debate to discuss one of our most important industries at a critical time for its future. The financial services sector and its related professional services form part of the backbone of the UK economy. According to a report published earlier this year by TheCityUK, these sectors together represent nearly 12% of UK economic output. They contribute £66 billion in taxes and generate an annual trade surplus of £72 billion.
We have heard from several hon. Members today, particularly from my hon. Friend the Member for Wirral South (Alison McGovern) in her eloquent speech, that it is wrong to misinterpret the term “the City” as simply meaning London—it does not. The financial sector’s presence and contribution are felt throughout the UK. TheCityUK’s report also highlighted the fact that, when related professional services are included, the industry employs 2.2 million individuals across Great Britain, two thirds of whom are located outside the capital. For each of those workers, the value added to the economy is £87,000, compared with the annual average of £52,000 for workers in other sectors. It is evident from those figures that financial services go far beyond a handful of well-paid jobs in the square mile. This is an association that we need to break down to ensure that the future of the industry is given the careful consideration it demands in the Brexit negotiations in order to safeguard stability for the rest of us.
Next year will mark the 10th anniversary of the early stages of the global financial crisis. In the intervening decade, the City has made measurable progress towards becoming a fairer and better functioning sector through the combined efforts of regulators and the industry itself. None the less, public trust in financial services remains at an all-time low, in some cases for understandable reasons. There is still some way to go for the sector to rebuild its reputation and regain that trust. For that reason, the fact that financial services might suffer disproportionately as a consequence of Brexit might not elicit sympathy in some quarters. However, if the financial crisis proved anything, it is that the success of our economy and nation is inextricably linked to the performance of our financial services sector. Arguably, that relationship had become too dependent in several ways before the crisis, but it is still true that it is challenging for the UK to achieve its full potential if our financial sector is not in good health. The positive flipside is that when the City does succeed, it brings a raft of accompanying benefits.
Our financial services sector is world leading. There is good reason why centres such as Frankfurt and Paris are vying to capture a slice of our thriving activity. The Financial Times revealed this week that the French Government are on the cusp of launching a cross-party initiative to lure businesses across the channel, while local financial regulators have simplified the process for new financial companies to register in Paris. The city’s business district has unveiled new adverts that are designed to entice companies to move with the inventive strapline: “Tired of the fog? Try the frogs!” The tone may be light-hearted, but we must take seriously the hard-headed commercial motivations. These existential threats do not mean giving the sector preferential treatment at the expense of others; it is about recognising the sector’s value and ensuring that we can build the environment it needs to continue to grow.
The £72 billion trade surplus, as mentioned in TheCityUK’s report, represents more than that for all other net exporting industries in the UK combined. We are discussing the future of our largest export industry. Getting Brexit right is fundamental to the overall success of our financial services sector and our continued economic prosperity. We need to focus on three main outcomes for financial services to ensure that, at least in the interim, the Government do not inflict damage on one of the most productive elements of our economy.
The first is clarity. Markets loathe uncertainty. While the Government fail to deliver a clear outline of their negotiating plans for financial services, investment and key decisions will continue to stall among domestic and international financial institutions of all sizes because they lack the information that they need to plan properly for the future. Equally, the outline needs to be fair and then effectively communicated. We do not want a bank-by-bank process of deal making similar to the approach that appears to have been offered to Nissan under which one institution receives mystery assurances while another is kept in the dark. Coherence and transparency—not a system of discreet concessions to those who shout loudest—will be critical. The eventual agreement must not cover just one industry, but the whole British economy, to make sure that Brexit works for everyone.
Secondly, the City is heavily invested in and dependent on the principle of free movement for its workers. At the very least, the sector needs basic guidance on what will become of the EU nationals upon whom it relies to function. London in particular boasts a cosmopolitan financial services workforce, attracting talent from the EU and beyond that helps to fuel its success. There is ambiguity about what the status of these individuals might be in the eventual negotiations. Once again, that stalls companies’ ability to plan for the future and make the right hiring choices. Equally, it will discourage people from coming to this country. It is unacceptable to use the personal circumstances of individuals working in financial services as a bargaining chip, so I call on the Government to guarantee their ongoing residency rights.
Thirdly, one of the central goals of the Brexit negotiations must be to guarantee freedom of trade for UK businesses in the EU, which is critical to financial services. The industry’s exports to the EU represented £18.5 billion in 2014. We will strongly argue for the rights of UK financial services companies to win business across the EU. In a world where global markets are becoming ever more connected, it makes no sense to put up barriers. The fact that we are already compliant with EU standards and regulations puts us in a position of strength, because we should at least qualify for equivalence on the day we depart. I second the view of my hon. Friend the Member for Leicester West that passporting—the right to do business across the EU—is a deal breaker in the negotiations.
The scale of this task must not be underestimated. In the lifecycle of a typical equity trade, there are around 100 different stages at which EU laws have an impact. When we discuss passporting, it is important to recognise that we are talking about not one simple directive, but a bundle of legal instruments that stretch across myriad items of regulation. They include the markets in financial instruments directive, the European market infrastructure regulation, the market abuse regulation, the prospectus directive—the list is long. Each financial market component and participant contributes to a complex ecosystem that is made up of many co-existing businesses. Inhibiting or obstructing a single part of the ecosystem could have a significant unforeseen impact. The Government must therefore consider carefully how to provide clarity and equal access for every single link of the chain.
I want to conclude by sharing two scenarios that underline the importance of today’s debate. We are operating in an environment of extreme uncertainty that seems to be benefiting no one except currency speculators. Despite that, a recent report by consulting firm Oliver Wyman managed to produce two reasonable forecasts of what might happen, depending on which type of Brexit we can achieve. Its analysis suggests that an exit from the EU that can deliver passporting and equivalence, alongside access to the single market in a similar scenario to that enjoyed currently, would prompt a decline of about £2 billion in revenues from EU-based activity and put 3,000 to 4,000 jobs at risk. That is the best-case outcome. In the worst-case scenario, with the UK moving to third-country status, without equivalence, and our relationship with the EU being principally through the World Trade Organisation, the implications could be severe. That framework puts up to 35,000 jobs at risks and could cost approximately £18 billion to £20 billion in revenue each year.
I am most grateful for this debate, which has taken place at a critical juncture for the UK economy, and I thank hon. Members for the valid points they have raised. I urge the Government carefully to consider this sector, which sits at the heart of our economic health, and to take on board the arguments that have been made about protecting future jobs, future revenue and the future prosperity of the United Kingdom.
The Economic Secretary to the Treasury (Simon Kirby)
I am grateful to the Backbench Business Committee for allocating time for this debate, and to the hon. Members for Leicester West (Liz Kendall) and for Nottingham East (Chris Leslie) for requesting it.
Earlier this year, the British public made it clear that they want a new relationship with the European Union. Although we are under no illusions that this will not mean hard work and adjustment, we are committed to getting on with the job to make Brexit a success for people across the UK and for businesses across our industries. That includes, of course, our world-leading financial services sector, because it is clear, both from the many points raised today and the regular discussions I have with Members on these issues, that we are all in agreement on the importance of this industry to the British economy and of making sure this sector remains robust, highly competitive and open for business after our withdrawal from the EU.
First, it is worth reflecting on why this sector is of such importance to our economy. We have heard many statistics today, and they tell a compelling story. Last year, this industry contributed more than 7% of the value of all goods and services produced in the UK. The industry also exports £63.7 billion of services worldwide every year, making it the world’s largest exporter of financial services. From a Treasury perspective, the sector also brings a huge amount of money to our Exchequer. Let me give hon. Members a sense of the scale: in 2015, the banking sector alone contributed £24.4 billion through just corporation tax and PAYE. Recent analysis suggests that if we look at the broader financial services sector, we find that the tax contribution increases to £67 billion.
Leaving aside the enormous value this industry adds to what we produce, the services we export and the taxes we receive, we also have to remember how many jobs this industry gives to British workers. Across the country, more than 1 million people have jobs in this sector, with two thirds of these outside London, and in addition more than 1 million people are employed in jobs related to the financial services sector. To give just one example, the north-east has more than 50,000 people working in financial services.
What are the Government doing to ensure the continued success of an industry of such huge importance to our economy? First, since the referendum result we have been engaging extensively with companies across the financial services industry, to understand how we can make sure that our withdrawal from the European Union is a success for the financial services industry.
Secondly, the Prime Minister has made it clear that we will invoke article 50 no later than the end of next March to begin our formal negotiations with the EU. The Government are determined to continue with that plan. Finally, we have said that the European laws and regulations will be transferred to British law on our exit from the EU to provide continuity for businesses that operate in the EU.
On the points that have been raised, the hon. Member for Leicester West (Liz Kendall) asked me for some clarity. I am very pleased to say that, hopefully, I can do just that. She asked about passporting. I can say that the Under-Secretary of State for International Trade, my hon. Friend the Member for Wyre Forest (Mark Garnier), was not correct on this matter. Passporting, or rather the access to EU markets that comes with it, is one of the key areas under negotiation. The UK is looking for a sensible discussion on how our two markets can continue to serve one another, and on what is needed to support that. She also mentioned freedom of movement. It might be helpful if I were to quote the Chancellor of the Exchequer, who said:
“I see no likelihood of our using powers to control migration into the UK to prevent companies from bringing highly skilled, highly paid workers here.”—[Official Report, 25 October 2016; Vol. 616, c. 134.]
The hon. Lady mentioned transitional arrangements. We are determined to secure the best possible deal for UK goods and services, and that is very much in the interests of both the UK and the EU. Given the strong level of interconnection between our economies, continuity of service and an orderly withdrawal from the EU are also very much in the interests of both sides,
The hon. Lady finally asked me to agree with her that the best possible Brexit for the UK was also the best possible Brexit for Europe. I do agree with her, and that is a message that we should all do our very best to persuade others of: it is in everyone’s interests that we get the best possible deal.
I thank my hon. Friend the Member for Wimbledon (Stephen Hammond) for his thoughtful and sensible contribution. The hon. Member for West Bromwich West (Mr Bailey) asked about the impact of withdrawal on smaller businesses. It is a very important point and we must always remember that companies involved in financial services are not necessarily all huge firms in the City of London. My hon. Friend the Member for Stone (Sir William Cash) obviously knows a great deal about Europe and I am always very pleased to hear from him. He made an interesting contribution, and I can reassure him that it is our intention to secure the very best possible deal.
The hon. Member for Wirral South (Alison McGovern) made the good point that not all financial workers are fat cats in the City. Indeed, they are hard-working people up and down the country, two thirds of whom operate outside the City of London. From Edinburgh to Brighton, and from Belfast to Bournemouth, the financial services industry is a very important employer, and I pay tribute to all those people who work so hard in it.
My hon. Friend the Member for Tonbridge and Malling (Tom Tugendhat) made an excellent point about the benefit that the UK offers to all of Europe, and it is in our common interest to get the best possible deal. The hon. and learned Member for Edinburgh South West (Joanna Cherry) might be pleased to know that I am planning to visit not only Scotland but Northern Ireland and Wales in the near future to look at financial services and to demonstrate the Government’s interest in all parts of the country. The hon. Member for Islwyn (Chris Evans) will also be pleased to hear that Wales is an important part of the solution. The hon. Member for Aberdeen North (Kirsty Blackman) sought certainty. What I can say is that I am certain that we will seek the best possible deal, and the clearing function is an important element of that deal.
As usual, the hon. Member for Nottingham East (Chris Leslie) made some thoughtful points. I can assure him that I listened to them carefully. The hon. Member for East Lothian (George Kerevan) thanked me and said that I was doing a fine job. Who am I to disagree? I can tell him that Brexit does mean Brexit, we will not be giving a running commentary, and we do intend to get the best possible deal. I thank the hon. Member for Stalybridge and Hyde (Jonathan Reynolds) for his sensible and constructive contribution. We all want Brexit to work for everyone and I look forward to working with him where we can to make sure that we get the best possible deal.
In conclusion, it is important that we retain our reputation for excellence in financial services and remain the most competitive place in the world to do business. It is not only about doing what is best for the British economy, but about doing what is best for everyone throughout the country, maintaining the quality of financial services available to British customers and taxpayers.
Once again, this has been a useful debate. I thank everyone for sharing their thoughts. We are very much in listening mode and I look forward to listening as things progress.
Liz Kendall
Once again, I thank the Backbench Business Committee for granting this debate. We heard many excellent contributions. I am only sorry that we did not have more time and that some Members could not speak for as long as they wanted to.
I do not think we learned any more from the Minister’s comments than we knew before the debate—[Interruption.] My hon. Friend the Member for Nottingham East (Chris Leslie) says that the Minister may regard that as a triumph. I am glad the Minister said that passporting is important, but he did not say that the Government would set out the broad framework and their objectives for the Brexit negotiations. He did not say that it was a priority to get the same access as we currently have to the single market for financial services, and he did not commit to a transitional agreement, let alone such an agreement any time soon. That is a huge mistake. If we want to protect this vital industry as well as jobs and growth, the Government need to act now, because businesses cannot wait. They have to plan for the future. Their customers, their regulators and their boards demand it. I ask the Minister to think again.
Question put and agreed to.
Resolved,
That this House has considered the effect of the UK leaving the EU on financial and other professional services.
Joanna Cherry
On a point of order, Madam Deputy Speaker. It is 49 years today since my colleague Mrs Winifred Ewing won the Hamilton by-election and came to this House as a solitary Scottish National party MP, and of course that means 49 years of SNP representation in this House, although we are rather more than one now. How would it be appropriate for me to mark this illustrious occasion in the history of my party and have it entered in the record?
Madam Deputy Speaker (Mrs Eleanor Laing)
The hon. and learned Lady has just proved herself to be a very adept and clever lawyer. Coming from me, that is a compliment. She will appreciate, as the House appreciates, that the point she made is not a point of order and does not, fortunately, require any comment from the Chair. However, she has made her point and it will be on the record that an historic event occurred 49 years ago today. I am sure the House will note that and, in its own way, celebrate it.
Living Wage
(8 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Siobhain McDonagh (Mitcham and Morden) (Lab)
I beg to move,
That this House recognises Living Wage Week which began on 31 October; believes that the use of the introduction of the national living wage to drive down conditions and take-home pay is against the spirit of the law; calls on the Government to close down those loopholes which make this possible; and further believes that any move to reduce the value of the national living wage to a level below the promised £9 per hour in 2020 is unacceptable.
I thank the Backbench Business Committee for granting time for this debate. Living Wage Week is about celebrating the real living wage—£9.75 in London and £8.45 outside London—which provides an income that meets a minimum cost of living.
I called the debate to highlight the inadequacies of the so-called national living wage, the new statutory minimum rate of pay. Initially, the main criticism of the wage was its name, because, at £7.20 an hour, it is far lower than the actual living wage. However, since April a growing number of high-profile companies have used its introduction to cut total pay for long-standing employees, despite the former Chancellor’s promise that
“Britain is getting a pay rise.”—[Official Report, 8 July 2015; Vol. 598, c. 337.]
Back in February, I was approached by a constituent who worked at B&Q and had been told that his contract would change. His contractual entitlement to double-time pay and seasonable bonuses meant that he would be losing £2,600 a year, after the increase in his basic pay. He is a man with two children, living in London and earning around £15,500 a year. B&Q is one of the main employers that have offset the basic pay increase with a total pay cut for employees on old contracts. It has cut the majority of its discretionary payments to staff on older contracts, stripping their pay and removing almost all their employee benefits. Although B&Q’s chief executive has promised me that all affected employees will continue to receive transitional payments to top up their pay, I know that thousands still believe that they will be significantly worse off.
It is a similarly sad story at Marks & Spencer. As one of Britain’s premier retailers, Marks & Spencer employs tens of thousands of workers across the country. It forced a consultation a few months ago to cut the terms and conditions for its employees on pre-2002 contracts. Like those at B&Q, these employees have been penalised for their long and loyal service. Their double time has been cut, as has their unsocial hours entitlement. In fact, M&S went even further than B&Q and scrapped its employees’ pension scheme at the same time.
Carolyn Harris (Swansea East) (Lab)
As my hon. Friend is aware, my mother was a long-time member of staff in Marks & Spencer—45 years. Such was the affection for the company that it was known by the staff, and indeed in our house, as “our shop.” Does my hon. Friend agree that this betrayal of loyalty of long-time members of staff is nothing short of, in the words of one staff member, a “kick in the teeth”?
Siobhain McDonagh
Absolutely, and I thank my hon. Friend for her involvement in the campaign. She will know that 11,000 employees were adversely impacted by the changes. Of those, 2,700 have lost at least £1,000 a year, 700 have lost at least £2,000 a year, and a significant proportion will lose up to £6,000 a year.
The human cost of those actions is huge. Literally hundreds of employees from across the country have contacted me in desperation. Let us consider just two examples. There is a gentleman—we will call him Connor to keep his identity secret—who has worked for M&S for more than 20 years, mainly on night shifts. He told me:
“I have enjoyed those years... getting satisfaction from delivering our goals and feeling like I was contributing greatly to achieving our targets. But as you are aware, M&S are cutting my night premium, Sunday premium and bank holiday, totalling several thousand pounds worth of shortfall in my wages per annum. On top of that, they suggest I also start to contribute into a pension. How am I going to be able to do that? I am sick but have a wonderful, large family to support, as well as a mortgage. I stand to lose everything... I have nothing to fall back on. I have given my best years to M&S... I feel cheated and betrayed.”
Let us consider Ms Smith from Yorkshire, a hard-working, low-paid mum. As a result of B&Q’s contractual changes, she is going to receive a staggering 30% pay cut and will lose £2,000 a year from 2018. She told me:
“How exactly am I going to make up this wage deficit? I have a young son to support, and next year is looking very bleak for us…I am worried about how I will support my family...I am heartbroken that the company I have worked so hard for, done 16-hour shifts for, come in on days off for, and valued greatly, has treated me like this.”
Two companies, one sad pattern of hard work and loyalty being punished. Thousands of employees at these two companies will never earn again what they earned in April. Indeed, the general public have been shocked by these actions, with a quarter of a million people signing Change.org petitions against these practices.
What is so shocking is the ease and speed with which these companies have legally cut staff pay. Both companies launched 90-day consultations, which is the statutory minimum. Neither recognises a trade union. Both targeted those workers on older contracts, and both conducted consultations that ended with these pay cuts being pushed through, regardless of the employees’ heartache and the reputational damage the companies have faced.
The consultations are a foregone conclusion. In fact, M&S’s head of retail told me that the company had been planning these changes for 18 months. M&S’s board will meet tomorrow to finalise these contractual changes, and it will be issuing notices a few weeks before Christmas to staff members who refuse to sign their new contracts. I ask the Minister to address that point in summing up.
Joan Ryan (Enfield North) (Lab)
I commend my hon. Friend for her tireless campaign on this issue. Given that a Resolution Foundation survey of employers found that there was no evidence for the claim that the national living wage leads to job losses, does she agree with John Hannett, the general secretary of the Union of Shop, Distributive and Allied Workers, that
“employers must not be allowed to blame higher wages for every job loss, every cut in hours and every change to terms and conditions”?
Siobhain McDonagh
I completely agree with my right hon. Friend, and I will go on to say how cuts in pay never seem to apply to those at the top of an organisation or to impact on its profits.
Steve Rowe, the chief executive of Marks & Spencer, still refuses to meet MPs to discuss these changes, and he has not accepted that he should have a pay cut in solidarity with his shop-floor staff. I hope Members will bear all this in mind when they are doing their Christmas shopping at M&S next month.
The fact that this happens at the same time as low-paid workers have been promised a pay rise by the Government is incredible. In many ways, B&Q and Marks & Spencer have just been unlucky in being singled out, because there are many more doing the same thing.
Liz Kendall (Leicester West) (Lab)
My hon. Friend has secured a really important debate. Is she aware of very similar problems at Samworth Brothers in my constituency? Long-serving workers are seeing their night shift and weekend work pay cut; there is no recognition of a trade union; and the bosses are refusing to provide information and are not taking a pay cut themselves. Does my hon. Friend agree that that is unacceptable and that they should commit to the spirit and the law of the legislation?
Siobhain McDonagh
My hon. Friend has anticipated my next paragraph, which was to congratulate her on the work she has been doing at local employer Bradgate Bakery, which is part of Samworth Brothers. Somebody doing the Saturday night shift at Bradgate this week will earn 30% less in three years’ time than they will this Saturday. How can that happen in the 21st century? Over the way in Grimsby, the Seachill fish factory, which works for The Saucy Fish Co, has cut overtime payments, despite the fact that overtime work is written into the employees’ contract.
Smaller benefits are also being ruthlessly got rid of. I hope Members will excuse the way I pronounce the name of the next company, but Le Pain Quotidien, where a cup of tea will set you back £3, cut paid breaks this year, while Zizzi has cut the range of free food options available to staff. Caffè Nero baristas are no longer eligible for free food on their lunch breaks, which saves the company about £3.60 per staff member. It seems that all retailers are racing to the bottom and cutting everything they possibly can to save a few pennies here and there.
It looks like the John Lewis Partnership—the top retailer on our high streets—will be the next big employer to cut staff pay, potentially going the same way as M&S and B&Q. Having already got rid of Sunday and bank holiday premiums for new starters, its chairman has outlined plans to “review historic pay structures”. In other words, it, too, will potentially cut the terms and conditions of the oldest and most loyal employees.
Each of those cases demonstrates that we desperately need to tackle in-work poverty and the unscrupulous pay practices and governmental inaction that lead to its entrenchment. Years ago, a typical family in poverty would be out of work, but now they are far more likely to be in work on low pay. According to the Resolution Foundation, almost a quarter of UK workers earn less than the real living wage—the equivalent of £16,500 a year for a full-time week outside of London, and £19,000 in London. A staggering 1.5 million workers earn only the statutory minimum wage of £7.20 an hour—that is just £15,000 a year for a 40-hour week.
Bob Stewart (Beckenham) (Con)
I thank the hon. Lady for allowing me to butt in. Her theme has been the cutting of wages in a number of companies. Is there a macro-reason for why that is happening right now, particularly in companies such as M&S and John Lewis?
Siobhain McDonagh
There seems to be an issue in retail and I completely understand that, but it appears—contradictorily and counterintuitively—that the living wage has precipitated companies looking at issues other than the hourly rate. The hourly rate has become king and everything else is being cut, but I am absolutely convinced that that was not the Government’s intention.
Not everybody’s pay is being cut or terms and conditions undermined. It is a completely different story for our country’s chief executives. The High Pay Centre has shown that the UK’s top bosses earned an average of £5.5 million each last year. That means that chief executive officers enjoyed a 10% pay rise last year, while wages for low-paid workers rose by just 2%, according to the Office for National Statistics. On average, FTSE 100 CEOs now earn 129 times more than their employees, when we take into account pensions and bonuses. The UK’s top bosses could take a page out of the book of Berkshire-Hathaway’s CEO, Warren Buffett, who paid himself a much more modest salary of $100,000 in 2015.
All of that demonstrates that the link between productivity and remuneration is breaking. It should be common sense that those who make a company’s profits possible should receive a decent day’s pay. They certainly should not be rewarded for their years of loyal service by a receiving a pay cut.
I share the Prime Minister’s sentiments when she said earlier this year that
“there is an irrational, unhealthy and growing gap between what these companies pay their workers and what they pay their bosses.”
I just hope that she will act on those words and encourage companies to think about a whole company pay policy and how much they pay their poorest employees.
Tristram Hunt (Stoke-on-Trent Central) (Lab)
I, too, pay tribute to the great leadership that my hon. Friend has shown. On the issue of raising wages, the average salary in my constituency is the fifth lowest of anywhere in the west midlands, with a median average salary of £22,000. Having a proper, real and decent living wage will make an extraordinary difference to some of the lowest paid in our communities.
Siobhain McDonagh
I completely agree with my hon. Friend. I ask the Government not to renege under any circumstances on their promise to ensure that the national statutory minimum wage will reach £9 by 2020. The British public were promised £9 an hour, so that should be the minimum they receive. The Government must also act to tackle the unscrupulous employment practices of employers who cut staff pay to offset the higher per-hour rate. In the words of the former Chancellor, the right hon. Member for Tatton (Mr Osborne), although such practices may be legal, they are not in the “spirit of the law.” Given the Prime Minister’s vocal desire to champion the situation of the poorest in the UK, I sincerely hope that she will review the ease with which employers can scrap long-standing and historical terms and conditions.
Companies have a responsibility to show a lot more respect to their loyal, long-standing staff. Company boards should count among their members not only lawyers and accountants but ordinary employees. Whether they are HR representatives or shop-floor workers, those who make a company’s profits possible deserve a place at the table.
I welcome the Prime Minister’s forthcoming employment review led by Matthew Taylor, a man who is known to many Labour MPs. I am pleased that the review will consider the issues I have raised over the past year. We need a public discussion that considers more than just pay per hour. We need to consider how the world of retail is changing, leaving many employees behind and offering less and less in the way of career progression. For instance, at B&Q and M&S, new members of staff with little or no professional experience will now receive the same per-hour pay as much more experienced members of staff. Where is the incentive to work hard if someone cannot work their way up? As the fourth industrial revolution beckons, what will happen to communities that have, until now, relied on retail work? What repercussions will that have for the way in which we educate and train citizens and the skills with which we equip them for the world of work?
We also need to consider the repercussions of the new gig economy. Over the last few months, we have seen how employers such as Hermes and Uber mistreat their self-employed workers to keep costs to a minimum. I was extremely pleased that the hard work of the GMB paid off with its win in a monumental employment case against Uber. But the Government need to be more proactive and champion the rights of the self-employed and the responsibilities of employers; the Government should not just pick up the pieces when things fall apart.
We have called out these actions, and our words in this place have been heard. They have been heard by top corporate executives who have flocked to me after debates to try and explain away their companies’ behaviour. Our words have been heard by thousands of staff nationwide whose pay has been cut unscrupulously and who have felt alone and ignored. Our words have been heard by countless employers who have been deterred from pursuing such changes for fear of the reputational damage that they would cause. Today, I hope these words will also be heard by the Prime Minister and the Government, and that we will all realise that a society in which the poorest flourish is one in which we all benefit.
Several hon. Members rose—
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. We have to move immediately to a time limit for Back-Bench speeches of five minutes.
Paul Scully (Sutton and Cheam) (Con)
I congratulate the hon. Member for Mitcham and Morden (Siobhain McDonagh) on securing this debate via the Backbench Business Committee. It is not the first time I have supported her application for a debate. This is another example of an issue that she has raised about which we can agree on a significant amount.
Living Wage Week provides a good opportunity to raise the issue of low pay with employers, and to encourage them to pay their employees a fair wage and thus reduce employers’ dependence on Government subsidy of their payroll costs through in-work benefits such as tax credits. The living wage is paid voluntarily by employers and set according to the cost of achieving an adequate standard of living. I question whether it is a real living wage, but it is a living wage as judged by the Greater London Authority for people in London, and by the Centre for Research in Social Policy at Loughborough University for those outside London.
I have employed people, on and off, for the last 20 years or so. As, I hope, a responsible employer, I try to pay more than the market rate if possible. People are more than commodities; they are the shop window, the engine room and the support team of any business. Investing in their people should be a top priority for any employer. I hope that my parliamentary staff, who may be tuning into this debate, will not be too inclined to raise a quizzical eyebrow at what I have just said.
Satisfaction at work is not all about pay. It is about conditions; it is about how bosses, managers and colleagues relate to and value an individual; and it is about career development. In this debate, we are focusing on the lowest-paid in our society—the people who are struggling to pay their bills and who are having to make difficult daily choices to be able to survive, let alone thrive. The Government have made a lot of progress since 2010 in improving the circumstances of low-paid employees. We will lift another 1.3 million people out of income tax altogether, while basic rate taxpayers will be more than £1,000 better off than they were five years ago. A full-time low-paid worker aged 25 or over now earns about £900 more than they did last year.
The national living wage means that earnings have risen for the lowest-paid workers at the fastest rate since records began. The Office for Budget Responsibility estimates that in total up to 6 million people could receive a pay rise as a result of the ripple effect that causes pay to rise further up the earnings distribution. By increasing the national living wage, taking millions of people out of tax and making welfare reforms, the Government are ensuring that it always pays to be in work.
Joan Ryan
Is the hon. Gentleman aware of the Joseph Rowntree Foundation evidence that a third of families earn less than they need for a decent standard of living? Given that, does he agree, as he supports a living wage, that the Government should provide firm guarantees that no employee will earn less as a result of the national living wage?
Paul Scully
I will deal in a second with what the Government are doing and the manifesto commitments we made last year, but I agree that we can always do more to lift the low paid out of poverty and low pay. It is very important that we continue to move to a higher wage, lower tax and lower welfare society, building a more productive country, because we must give families the security of well-paid work. It is important for the Government to help businesses to offset the costs of the national living wage, including the ripple effect that I have mentioned. Corporation tax will therefore be cut and businesses will benefit from a 50% increase in the employment allowance.
Siobhain McDonagh
Does the hon. Gentleman accept that the problem is that businesses sometimes do not pay corporation tax? When I made such a point to Kingfisher, the owner of B&Q, it said that the cut was of no help because it did not pay any corporation tax last year.
Paul Scully
It is important to encourage businesses to pay their fair share of taxes. Despite what the hon. Lady says, many companies pay a significant amount in corporation tax, and I know that businesses value lower taxes and the employment allowance. I benefited from employment allowance in the company I ran before I was elected in that it allowed me to create another job.
The Low Pay Commission is charged by the Government with recommending the level of the national living wage premium each year, to increase the national living wage to 60% of median earnings by 2020. According to independent OBR forecasts, the Government expect it to reach £9 by 2020. I have heard nothing that implicitly or explicitly suggests that the Government are wavering in that commitment. I will be interested to hear the Minister reaffirm that, as I am sure she will, when she sums up.
Beyond supporting pay initiatives, the Government have sought to boost jobs and apprenticeships by involving businesses in the design of new apprenticeship standards and offering grants of £1,500 for businesses with up to 1,000 employees to take on new 16 to 24-year-olds as apprentices if they have not taken one on in the past year. That has been extended for another year. From this April, employers have not had to pay employer’s national insurance contributions for apprentices under the age of 25.
I know that the Government understand the ripple effect on companies, which I have mentioned, and that Ministers—including the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Stourbridge (Margot James), who is in her place—have pushed companies to implement the national living wage in the spirit in which it was introduced. For that reason, the examples raised by the hon. Member for Mitcham and Morden are very important. I am sure that the company that is having its board meeting tomorrow and the others she talked about will listen to what is said in this debate.
We should also hold up good examples of where the national living wage has worked well, because such companies are the beacons to which others can aspire. Such examples show the positive effect of valuing employees by paying that little bit extra and offering other benefits. That happens in higher-paid, graduate employment. We hear about companies such as Mars, KPMG and Aldi that are very good employers for graduates. We should look for great examples of employers who take on a significant number of lower-paid employees, to show how doing so can very much work for the company, as well as for the individual and their family. Let us get other companies to emulate fair pay, great conditions, excellent career prospects and very productive work. We should look to the two types of example, good and bad. The hon. Lady has started a very significant campaign that I hope employers will listen to.
Holly Lynch (Halifax) (Lab)
I too start by thanking my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh) for the leadership and tenacity she has shown on this issue and for securing this debate with the support of the Backbench Business Committee.
Although I have been surprised at and saddened by at the variety of ways workers in receipt of the living wage have had other terms, conditions and benefits revoked or reduced, I will focus today on those who are potentially not even receiving the living wage at all—workers under the age of 25. In June, I secured a Westminster Hall debate on age discrimination and the national living wage. The Government have failed to respond to some of the points raised by myself and others in that debate, so I welcome the opportunity to discuss the issue again.
The decision to deny the Government’s so-called living wage to under-25s means that from 1 April this year, many workers under the age of 25 will have discovered that their pay packet is substantially less than that of their older colleagues. As things currently stand, those between the ages of 21 and 24 are paid 50p less per hour than the living wage. The margin is greater again for those between 18 and 21, who are paid £1.90 less an hour; those under the age of 18 are paid just £3.87 an hour, which is £3.33 less per hour than the new living wage.
I am sure that the Minister will accept that many young workers, who were already demoralised at being left behind, felt that salt had been rubbed in their wounds by the comments of the then Minister for the Cabinet Office and Paymaster General, the right hon. Member for West Suffolk (Matt Hancock)—now the Minister for Digital and Culture—at last year’s Conservative party conference. Outlining the rationale for the decision to pay under-25s less, he said:
“Anybody who has employed people knows that younger people, especially in their first jobs, are not as productive, on average.”
As someone who was doing three part-time jobs at the age of 17 while studying for my A-levels, I can sympathise with those workers under 25 who find that sweeping generalisation grossly unfair.
We hear that young people are not as productive, so how are the Government measuring productivity? I asked in a written question for their figures on the productivity of young workers. I was told that they had absolutely no evidence to support the claim. In his answer, the then Minister for Skills, the hon. Member for Grantham and Stamford (Nick Boles), told me that
“there are no official statistics estimating the productivity of workers by their age.”
So we know that the Government cannot give evidence to support the reasoning of the right hon. Member for West Suffolk. I accept that those embarking on a new role often require training and support from their employers and perhaps therefore initially represent a reduced return on investment for an employer, but that could be said of any employee, of any age, taking on a new role or returning to the workplace. Up and down the country there are countless examples of young people who give it their all and are a huge asset to their firms, yet now face the demoralising prospect of unequal pay.
Recently, it feels as though the Government have moved on from the productivity argument and are instead arguing that the ability to pay under-25s less will incentivise firms to hire young workers. Indeed, when I asked the former Leader of the House for a debate on this issue at business questions, he replied:
“I…think it is important to do everything that we can to incentivise employers to take on young people.”—[Official Report, 28 April 2016; Vol. 608, c. 1564.]
We all want to see youth unemployment addressed, yet organisations, including the Federation of Small Businesses, have pointed out that the Government’s approach could see employers wandering into legally precarious territory. An employer that actively seeks to recruit under-25s to cut wage costs will almost certainly fall foul of age discrimination legislation. The Equality Act 2010 prohibits discrimination on a number of grounds; section 5 of the Act recognises age as one of those characteristics. It is direct discrimination if, because of a protected characteristic, one person is treated less favourably than another. The House of Commons Library has confirmed that to recruit workers on the basis of their age would constitute direct age discrimination.
In evidence to the Low Pay Commission, the Federation of Small Businesses said that
“our survey data suggests that some businesses may focus their recruitment on the under 25s. However by doing this they run the risk of potentially breaching age discrimination legislation, which should lead many employers to re-evaluate this stance.”
Will the Minister clarify the Government’s intention on the threshold for 25-year-olds as a financial incentive, and respond to the advice of the FSB? If, as a result of the Equality Act, the threshold for under-25s is not permitted to serve any purpose in boosting youth employment rates, why have a lower rate at all?
Having campaigned on the issue, I joined my hon. Friend the Member for Birmingham, Erdington (Jack Dromey) earlier this week to meet a number of young workers who were brought together by the GMB trade union—I thank them for their work on the campaign. Those young workers told their stories, including a testimony from a 20-year-old retail worker called Rebecca, who said:
“Earning less than older workers stops me from socialising with friends, studying part time to get a better job and I can’t afford to have driving lessons or even think about owning a car. I’m frustrated at the fact that I am expected to live on so little, whereas if I was older I would automatically be paid more.”
I hope the Minister reflects on Rebecca’s story and many others, and rewards under-25s for their hard work by extending the living wage.
James Berry (Kingston and Surbiton) (Con)
I thank the hon. Member for Mitcham and Morden (Siobhain McDonagh) for bringing the debate to the House. I enjoy working with her on human rights in Sri Lanka, and I enjoyed hearing her comments in the debate. I welcome the speech of the hon. Member for Halifax (Holly Lynch), whom I am following for a second day running.
The national minimum wage was introduced by the Labour Government in 1999 at £3.60 an hour for those aged over 22. Successive increases based on recommendations from the independent Low Pay Commission meant that it reached £6.70 by last year. I commend the Labour Government for introducing the national minimum wage, but this progressive Conservative Government introduced the national living wage, increasing the lowest rate of pay for those aged 25 and over to £7.20 this April, and to £9.35 from April 2020.
That was significant for at least three reasons. First, some had often wrongly characterised the Conservative party as an opponent of statutory minimum wages, which was clearly not the case. Secondly, the 2016 rate represents a 7.5% increase, or a 10.8% year-on-year increase, which is the largest cash increase ever to a living wage. Thirdly, the independent Low Pay Commission concluded that the real value of the new national living wage would restore and surpass the value lost in the economic downturn. I was therefore delighted when the Government announced the national living wage, as were many of my constituents in Kingston and Surbiton who were among the 1.8 million workers in the UK benefiting from the introductory wage increase.
I was concerned about the effect of the national living wage, particularly in sectors such as nursing homes. Members on both sides of the House raise the issue of the high cost to councils of placements in nursing homes, and the high costs to private users of nursing homes, which I thought would only go up if the minimum wage was increased. I discussed that with a number of care home owners in my borough of Kingston, who pointed out that they were either already paying in excess of the then proposed national living wage or planning to do so—there was such a shortage of nurses and healthcare assistants willing to work in nursing homes that they had to pay the additional amount to get quality staff.
Jim McMahon (Oldham West and Royton) (Lab)
The hon. Gentleman has started a very curious train of thought. Let us say that the employers had said that the increase would have an impact. Would his view have been that the staff who look after some of the most vulnerable people in his community should not be allowed the increase?
James Berry
My concern was that the cost would be passed on to the customer, which would either be the council or private payers, who often have to shell out a huge amount to pay for the care of their parents or loved ones. As it happens, as far as I have seen, that has turned out not to be the case. In fact, I have seen no significant evidence of widespread transfers of the cost of the national living wage to customers.
How have the costs been absorbed? Some companies have absorbed them by taking a hit to their profits. Others are doing the very things that the hon. Member for Mitcham and Morden listed, many of which are absolutely disgraceful—I have no quarrel with her about that. There are other examples of companies forcing staff to buy their own uniforms or pay for their training, which I similarly condemn, as I am sure she would.
What action are the Government taking? First, with minimum wage enforcement, an employee can take their employer to an employment tribunal for breach of contract. Secondly, when there is non-payment of a minimum wage, including the national living wage, the employee can complain to Her Majesty’s Revenue and Customs, which investigates every single case and can require repayment of the underpayment. Following changes made by the Government in April, a fine amounting to 200% of arrears can be levied. There is also provision for naming and shaming, which is popular in this context at least, as 687 companies have been named and shamed so far. As far as I am aware, there have been no complaints of this action not being taken when it has been demanded of HMRC.
What happens when the rule is not breached, but the spirit of it is? I hope that the Government will continue to criticise employers that do not follow the spirit of the rules in exactly the way the hon. Members for Mitcham and Morden and for Halifax and my hon. Friend the Member for Sutton and Cheam (Paul Scully) have taken the opportunity to do today so that we, as customers, can also take direct action by not shopping at Marks & Spencer this Christmas if we are not happy about how it treats its staff.
What we did not hear from the hon. Member for Mitcham and Morden was any suggestion of how the Government could do more to deal with employers who do not behave according to the spirit of the rules without wrapping them up in regulation after regulation. If I had an answer to that, I would certainly give it to the House, but I have not heard of one yet. I am pleased there are regulations in place to tackle those who breach the letter of the rules. I hope that hon. Members and the Government will continue to call out those who breach the spirit of the rules; I will continue to do that, too.
Helen Goodman (Bishop Auckland) (Lab)
I congratulate my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh) on running an excellent campaign over many months and bringing to light a significant problem. I think the hon. Member for Kingston and Surbiton (James Berry) is well intentioned, but he is perhaps a little over-optimistic about how easy it is for people to get into conflict with their employers, especially now that tribunal fees have been increased. My hon. Friend motivated me to find out what is going on in my constituency. I have heard stories very similar to those that she told about Marks & Sparks and B&Q from the GMB trade union with respect to Asda, but the story that shocked me most was what is going on at Morrisons.
Morrisons made an increase to its basic hourly rate of £1.27, taking the figure from £6.93 to £8.20. A person working 20 hours mid-week would therefore appear to gain £25.40 a week, or more than £1,000 a year. To pay for that, however, paid breaks became unpaid, at a cost of £2.05 for each break lost. Morrisons also abolished the Sunday premium of time and a half. Instead of being paid £12.30 an hour, people received a pay cut from £10.39 to £8.20. This has had a particularly bad impact on those who regularly work weekend shifts. One of my constituents gained a miserly £1.64 a week from these changes. Their partner told me that this had caused a lot of “heartache”—that was the word she used. One very unpleasant aspect of this, of course, is that it sets workers against each other. One person’s pay rise is literally at the expense of another person’s pay cut. It is not necessary, because the people I have spoken to who work for the Co-op have not been treated in this way.
Morrisons no doubt told its employees that this was all that it could afford, so hon. Members will imagine my astonishment at a parallel development in my constituency. They might know that I have an extremely large constituency of 300 square miles, with very contrasting communities at either end. At the same time as Morrisons was cutting the pay of its Sunday workers, William Morrison was buying a castle at the other end of my constituency for more than £3 million.
When most of us buy a house, we haggle to get the price down—not Mr Morrison. He saw the advertisement for the castle, priced at £3 million, in Country Life. He was so keen to have it that he offered a quarter of a million pounds more. As is recorded by the Land Registry, he paid £3.24 million. The increase is more than enough to buy a family house in my constituency. Of course people are free to spend their money as they like, but I am afraid that this paints a picture of modern capitalism that is ugly and exploitative. I am not sure what his great grandfather would have made of all this, but there seems to be something very Victorian about the rich man in his castle and the poor man at his gate.
The Morrison family shareholding is now worth some £270 million. Over the past two years, the dividend payments have been 20p per share, so the family has been getting about £24 million on their shareholding. In real terms, the pay deal for Morrisons’ Sunday workers has been a cut. This inequality is not necessary. It is not efficient, it is not just and it is wrong. There is really only one word to characterise what has been going on—greed. That is why people need Labour’s real living wage, independently set and properly enforced.
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Margot James)
I congratulate the hon. Member for Mitcham and Morden (Siobhain McDonagh) on securing this important debate. I also welcome the hon. Member for Birmingham, Erdington (Jack Dromey) to his shadow ministerial position; this is the first time that we have faced each other across the Dispatch Box.
I congratulate everyone involved in the Living Wage Foundation on all that they have done to promote the concept of a living wage and to motivate more companies to pay it. As the Minister for small business, I was pleased to see that research carried out by the Universities of Middlesex and Liverpool about the adoption of the living wage by SMEs showed that 70% of respondents said that becoming a living wage employer had had a positive effect on their brand and corporate image.
I am proud to be part of a Government who have introduced the first national living wage, so let me take some time to acknowledge the magnitude of this change for workers. New earnings data released last week by the Office for National Statistics shows that 1.5 million workers will have seen a pay rise this April. The introduction of the national living wage meant that a full-time, low-paid worker working 35 hours a week would be earning about £900 more this year than last year, and even more workers will benefit as we make our way towards 2020.
As my hon. Friend the Member for Sutton and Cheam (Paul Scully) set out, new data have confirmed that wages have continued to grow by more than inflation. That is even more the case for the lowest paid, for whom the gains are by far the largest this year. I listened carefully to what hon. Members said about certain companies, but the overall impact of the new living wage has seen gross weekly pay for the lowest paid growing by 8.6% between 2015 and 2016. That is significantly higher than the growth at the median, which was just 3.2%. Despite what we heard this afternoon, wages rose well over twice as much for the low paid as they did for those on average or higher pay. The national living wage is now the highest minimum wage that the country has ever seen—not just in cash terms, but when inflation is taken into account.
Siobhain McDonagh
The Minister refers to the lowest-paid people gaining an increase of 8.2%, but that does not compare well with the top FTSE 100 chief executives, whose pay increase was 10%. My fear is not just for the lowest paid, but for the group of people just above them, who are finding that the introduction of the living wage is stripping out all the other benefits, leading to an overall reduction in their pay.
Margot James
I shall be dealing later with some of the points that the hon. Lady made in her speech about other benefits, and the overall impact on wages and take-home pay, but she should bear in mind that 8.2% is not very dissimilar to 10%. That does not mean that I am defending what many people have described as excessive pay rates at the top end. Indeed, the Prime Minister has asked my Department to produce a discussion paper on corporate governance. She has made it clear that she expects some of that top-end remuneration to come under the microscope, especially when it does not seem to reflect improved corporate performance.
I have listened carefully to representations about the level at which Governments should set the national living wage and the way in which overall pay should be managed. Higher pay needs to be affordable for employers, because if they cannot afford to pay it they will not hire workers and, worse still, may even lay workers off. The Low Pay Commission is led by an expert panel and is absolutely independent of the Government. We will continue to take its expert and independent advice, which will help us to set the national living wage. The commission will make its recommendations after careful consideration of the state of the economy to ensure that we can afford to make the living wage as high as possible without costing jobs. It will gather extensive evidence across the economy from workers, their representatives and employers, and will then reach an independent view.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
As the Minister will know, the merchant marine service has been one of the most difficult areas of employment when it comes to enforcement of the national minimum wage. When will we have the updated guidance on the application of the minimum wage to seafarers that we were promised?
Margot James
I will ask Her Majesty’s Revenue and Customs, which is the enforcement body for the minimum wage, what stage its investigation has reached. As one of my hon. Friends pointed out earlier, HMRC investigates every single complaint for underpayment, but it also mounts sector-based inquiries into such matters as the circumstances of seamen.
Let me now deal with some of the overall issues raised by the hon. Member for Mitcham and Morden. I share some of the concerns that have been expressed today. We know that employers are responding to the national living wage in a range of ways, depending on the markets in which they operate and the current state of their businesses. The extent to which they may be able to absorb the extra costs from profits, pass them on in the form of increased prices, increase the productivity of their staff or reduce other costs will vary between and within sectors. We think it essential for employers to ensure that their reward packages are competitive, and that they reward staff for their work in order to retain and develop workers who are fundamental to their success.
Ultimately, however, although we can set the minimum wage, it is for employers to decide how to manage those increases in their costs. Any changes in contracts must be agreed with workers, and must be in line with the law at the very least. Any instances of unfair dismissal that might result are, of course, a serious matter, and would be dealt with through employment tribunals, but employees could always contact the Advisory, Conciliation and Arbitration Service for guidance at the same time.
It is worth noting that changes in pay structures in the retail sector can reflect long-term changes to introduce greater consistency, perhaps the sort of changes that we have heard about this afternoon. Some may be coincident with, but not a consequence of, the introduction of the national living wage, and I do not accept that they are in any sense loopholes. The Government will continue to set a minimum hourly wage, and remuneration over and above that rate is a contractual matter between the employer and the employee.
Margot James
I will give way one last time. I am aware that many other Members wish to speak.
Joan Ryan
I thank the hon. Lady for giving way. She talks about going to ACAS or a tribunal in a way that makes that sound extremely easy. However, companies only have to have a 90-day consultation, and when that is finished they can take the measures they wish to take that lower wages by reducing overtime and bonus payments, despite the fact that they are implementing the Government’s national living wage. Surely this is a loophole and the Government should act; otherwise, what is the point of any of the Government’s measures?
Margot James
I do not see these matters as loopholes because there is no proof of a connection between the introduction of the national living wage and some of the cases we have heard about this afternoon.
I object to the automatic assumption that the changes that Marks & Spencer has made to its contracts and conditions are exploitative or a direct result of the national minimum wage. The hon. Member for Mitcham and Morden stated that Marks & Spencer had scrapped its pension scheme. It has not done so; like a host of other firms—the vast majority of private sector firms—it has moved from a defined benefit scheme to a defined contribution scheme. Indeed, the hon. Lady herself pointed out that the John Lewis Partnership had moved in such a direction several years ago, and it is not surprising when we consider what has happened to some of our large corporations’ defined benefit schemes in recent years. In August alone the deficit of those schemes increased by a massive £100 billion—and that was just in one month.
These pension schemes have to be sustainable; otherwise, we are going to see a calamity unfold over the next decade. Marks & Spencer has, along with the vast majority of other corporations, taken the entirely reasonable decision to move over, after consulting their employees at length and after putting in place a compensation programme to cover a three-year transitional period.
I took the precaution of talking to Marks & Spencer representatives to find out about the wider impact of some of these changes on employees of one of our most famous high street stores. I found that a rather different picture emerged from what we have heard from some Members in this debate. The company has put in place a Marks & Spencer living wage of £8.50 as a minimum for all store staff from April next year, and all those staff will receive a pay rise for every hour worked, and longer serving employees, who I agree have had to give up premium rates for Sunday and bank holiday working, will at least receive a lump sum in compensation. The conclusion is that approximately 90% of M&S employees will receive higher pay as a result of all the changes, which staff are free to accept or reject. M&S has also undertaken a very lengthy consultation covering all its store staff.
Margot James
I will; I did say I would not give way again, but it is the hon. Lady’s debate.
Siobhain McDonagh
As I have always done, I am specifically referring to those long-standing loyal members of staff who have worked at Marks & Spencer since before 2002—they have worked for at least 14 years for the store. Thousands of those members of staff are going to lose thousands of pounds each year. There is a two-year lump sum to be had. They have no choice; the 90-day consultation has taken place. If they reject their new contract, they will be sacked for another substantial reason. Does the Minister, on behalf of the Government, believe that that is a fair way to treat thousands of long-standing loyal staff who have gone into work at weekends and on bank holidays to keep the company they love going?
Margot James
I do not accept that that is a fair representation of what Marks & Spencer is doing at the moment, for many reasons. I note that the hon. Lady said that if staff did not accept the terms, they would be sacked for another reason. That would be illegal and I do not believe that Marks & Spencer would go down that road. I think it has been much—
Siobhain McDonagh
On a point of order, Mr Deputy Speaker. What the Minister has just said is legally and factually incorrect. The law states that if a company has a 90-day consultation with its staff about changes to terms and conditions, it can then issue a new contract. If a member of staff refuses to sign that contract, they can be sacked for another substantial reason.
Mr Deputy Speaker (Mr Lindsay Hoyle)
That is not a matter for the Chair, but the hon. Lady has put it on record for people to see.
Margot James
I think I will move on—[Interruption.] I do not accept what the hon. Lady has said. The 90-day consultation period ended with Marks & Spencer still having a few people not agreeing to the contract, and those people are still employed by Marks & Spencer. Also, 99% of employees have accepted the contracts. The other point that I would contest in what the hon. Lady accuses Marks & Spencer of doing—[Interruption.] I make no apology for trying to set the record straight. Hon. Members are free to speak in this House without fear or favour, and I make no apology for trying to set the record straight when I feel that a company, or perhaps an individual, in the outside world has been maligned unfairly. I make no apology whatever for that.
I shall conclude my remarks, because time is marching on. The national living wage has brought immense benefits to the workforce in this country and I am absolutely delighted that, for the first time in many years, wages have risen more than twice as much for the low paid as they have for those on average or higher pay around the country. That is to the credit of companies and workers alike, and for that reason among many others, I am delighted to support the whole notion of the national living wage.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
I am pleased to have this opportunity to contribute to this important debate, and I pay tribute to the hon. Member for Mitcham and Morden (Siobhain McDonagh) for securing this time from the Backbench Business Committee. I am grateful for the many examples that she and others have brought to the House today. I do not in any way seek to diminish those examples when I say that the people I am about to speak about would probably bite your hand off if they were offered the terms and conditions that the hon. Lady and others have described. I want to talk about the pay levels and employment practices on offer to our seafarers that are all too common in the maritime sector in the United Kingdom.
The recent detention of two vessels operating in the North sea—the Malaviya Seven and the Malaviya Twenty in Aberdeen and Great Yarmouth respectively—lifted the lid on payment and employment practices that are frankly scandalous, and from what I hear from many of those who work in our merchant marine in the North sea, this is just the tip of the iceberg. These practices are much more widespread and there is much more to be found. To put it bluntly, if these practices were happening on dry land, enforcement action would be taken immediately. They would not be tolerated. Because they are happening at sea, however, they are somehow out of sight and out of mind. I hope that when the Minister speaks to representatives of HMRC, she will impress it upon them that that attitude has to change.
I want to bring to the House’s attention the situation regarding two ferries that run lifeline freight services to my constituency from Aberdeen. The Helliar and the Hildasay are operated by Seatruck Ferries, but they are on contract to Serco, which operates the Scottish Government-funded lifeline ferry service. The RMT tells me that in 2014, when it last had sight of the contracts, some 20 ratings on the two ferries were being paid £3.66 an hour. The ferries’ journeys start in Aberdeen and finish in either Orkney or Shetland in the Northern Isles, but the company is able to pay that rate because it is deemed to be operating wholly outside UK waters. It beggars belief. It is wrong not only for the ratings, most of whom are probably Estonian nationals, but for UK seafarers whose jobs and livelihoods are being undercut by such employment practices. It is outrageous that a taxpayer-funded service is being operated in a way that undermines the opportunities of British seafarers to get working conditions and employment rates to which they would otherwise be entitled.
Seatruck Ferries recently said:
“Seatruck Ferries operates in a worldwide shipping market where NMW”—
national minimum wage—
“application in isolation would place the company at a serious disadvantage in relation to its competitors.”
It would appear that what it is doing is illegal, but, frankly, that is sheer sophistry. It is a scam that the Government could stop if they were minded to take the necessary action to stop it. That is why the point about the Government guidance on the application of the national minimum wage that I made in an intervention on the Minister is not just important, but extremely urgent. The practice may be bad, but from what I hear an awful lot worse is going on in the North sea on ships that have been chartered to the oil and gas industry.
I will not detain the House much longer because I do not have the time, but in evidence to the Energy and Climate Change Committee I challenged the chair and chief executive of the newly created Oil and Gas Authority to bring the operation of the maritime sector in the North sea within its remit, but they flatly refused. It seems to me as though they knew that there was something nasty underneath the stone and for that reason they were not prepared to lift it.
Jim McMahon (Oldham West and Royton) (Lab)
I thank my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh) for securing this important debate. The fact that the time limit that has now been applied is testament to how many Members wanted to speak.
I will talk about the national minimum wage, in particular its impact on young workers over 18-years-old. A fair society should recognise hard work and contribution. In doing so, it should ensure that work pays a decent wage in return. In this country, it should be about more than just getting by; people should be paid enough to get on and do well.
I took exception to the living wage brand being hijacked by the Government, who tried to claim it for what is basically a discounted living wage that is not enough for people to live on. Putting that cynical, cheap ploy to one side, now that the brand has been adopted—some commentators say “stolen”—by the Government, it is important that a genuine fist is made of trying to ensure that it is enough for people to earn a decent living. That will be good not only for workers and their employers, but for society and the Government, too.
To realise that ambition, we must move to a real living wage. Much has been said about the Government needing to honour their existing commitment, but even that does not go far enough. A real living wage by today’s standards is about £10 an hour. I commend the work of the Living Wage Foundation and our trade unions, and I am proud to be a member of the GMB, particularly at this moment in time, when it is leading the “£10 Now” campaign. That is about recognising the real cost of living and the real cost involved in people having a decent lifestyle as a result of their hard work and toil.
The situation is even more unfair for the under-25s. Younger workers can be working alongside someone slightly older who is doing the same job in the same location, for the same employer and with the same commitment, yet they can be paid between 3% and 23% less. That cannot be fair or just in a decent world. The current estimate is that 3.4 million people are in exactly that circumstance, where they are working for less than the national living wage.
I want to bring to the Chamber my own experience. I have always been a hard worker, and when I left school I worked as an apprentice during the daytime and as a delivery driver in the evening. On Saturdays, I worked in a newsagent’s, which I did just so that I could run a car. My shock came when we discovered that our first son was on his way. I was earning very little at the time, but it was enough to get a mortgage, which we did. I was 21 when Jack came along. I was 21 and paying a mortgage and council tax; paying for utilities; and trying to keep the food stocked up in the fridge and the cupboards. Under the current proposals, in today’s world, I would be earning far less than somebody doing the same job with the same expenditure, and I cannot see how that can be right or fair. If it was not for the University of Manchester taking me on as an apprentice technician, I would be in that same circumstance today, as many of my friends and family have found themselves. I would like to believe that in a just society and a fair society today they can achieve far more than just getting by.
I wish to read out an important quote, which comes from Rebecca Pitchford, a young 20-year-old retail worker. She says:
“Because of my age the Government says I can live on £5.55 an hour whilst my colleague earns £7.20 an hour for doing exactly the same job. Rent and living expenses are exactly the same, so why aren’t the wages?”
Let us give Rebecca the answer. More importantly, let us give Rebecca and the 3 million people like her a solution and pay them a decent wage.
Liz McInnes (Heywood and Middleton) (Lab)
First, I thank my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh) for securing this debate and for her exceptional work on this issue since the Government’s national living wage took effect. She has campaigned tirelessly for the rights and wages of workers, to make sure companies do not renege on their contractual commitment to the rate of statutory pay by reviewing and diminishing their staff benefit and reward structures. She has held firms such as B&Q and Marks & Spencer to account. They have tried to offset the cost of the national living wage by cutting Sunday pay, bank holiday pay, company pension contributions and unsocial hours. I echo the words of the right hon. Member for Tatton (Mr Osborne): that is not
“in the spirit of the law.”
I commend my hon. Friend’s unshakeable belief in following through on this undertaking, persistently raising this issue inside the Chamber and relentlessly campaigning outside the House. I am sure the thousands of affected workers would also like to thank her, too.
Many of those people are in my constituency. This week, I received a letter from a constituent, Lynn, who works for Marks & Spencer and has done so for 34 years. These are her words:
“I feel I have been blackmailed and threatened to sign the form to accept the small pay-out because I was told I would not receive this; also they would change my contract and that would mean I would have to start working Sundays and work all bank holidays. No matter what they say the loyal long service worker has been sold down the river and threatened.”
Lynn clearly feels that she has been forced into an “agreement”, despite the warm words from the Minister, and that she has been blackmailed—those are her words, not mine. It is disappointing to hear reports like this from employees of stalwarts of our high streets, which really should be striving to be seen as exemplar employers. While all this has been going on, Marks & Spencer has reported a 4.3% increase in profits; the total is £689 million in the UK and £1.1 billion internationally this year alone.
As we are all aware, this week is Living Wage Week—the real living wage, as determined by researchers at Loughborough University, not the Government’s misnamed “national living wage”, which is a new national minimum wage, no more, no less. The real living wage is good for the individual, good for the family, good for society and good for business itself. Two thirds of employers who pay the living wage—the real living wage—reported a significant impact on recruitment and retention. They also saw a sharp fall in absenteeism. More than 80% reported improvements in staff performance. It was my privilege yesterday to visit the living wage event held in Parliament and to talk with many small and medium-sized enterprises about the benefits of having living wage status and what it brings to their businesses. Large companies such as Marks & Spencer could learn a lot from them.
The former Prime Minster said that the genuine living wage was
“an idea whose time has come”,
and yet here we are, six years on of Conservative rule, and it has not been implemented.
James Berry
Instead of making tendentious points about the name of this living wage, perhaps the hon. Lady will explain why her party’s manifesto at the last election did not include bringing the living wage up to the level of the London or national living wage?
Liz McInnes
I believe that my party’s manifesto championed a decent standard of living for all workers. [Interruption.] I will have to go back to the 2015 manifesto and see what we actually said and get back to the hon. Gentleman.
Mr Deputy Speaker (Mr Lindsay Hoyle)
I do not think that we will be debating the manifesto.
Liz McInnes
I have no intention of debating the manifesto, but I appreciate the warning.
The time is now upon us to commit to making work truly pay. I hope that the current Prime Minister will not fall short on her promise to make
“Britain a country that works for everyone.”
I will give the last words to Lynn, my constituent. She wants the Government to step in and stop Marks & Spencer, as well as other companies, reducing their employees’ rates of pay via benefits just so they can pay the national living wage. I hope that this Government will rise to this challenge and do the right thing for Lynn, and for workers up and down the country. What “party of the workers” could refuse that?
Patricia Gibson (North Ayrshire and Arran) (SNP)
I thank and congratulate the hon. Member for Mitcham and Morden (Siobhain McDonagh) on bringing this debate forward.
We are celebrating Living Wage Week, which is about raising awareness of the vital need for all those who go out to work to earn enough to meet the cost of living and to applaud those employers who have signed up to this scheme, committing to pay their staff the living wage. Of course I am talking about the real living wage of £8.45 an hour, which has just come into effect. It is not the same as the UK Government’s “pretendy” national living wage, which is set at £7.20 for people over the age of 25.
The national living wage relates to average earnings, not living costs. Therefore, it should not be called the living wage and it is disingenuous to call it so. By contrast, the living wage is calculated according to the basic cost of living and so takes account of adequacy of household incomes for achieving what everybody should aspire to have—an acceptable minimum standard of living. It cannot be too much to ask employers to pay their staff literally enough on which to live.
Mr Deputy Speaker
Let me explain. The Minister had probably 18 minutes in which to speak. The Front-Bench speeches are down to six or seven minutes. It is not fair. It is up to Patricia Gibson whether she wishes to give way.
Patricia Gibson
On the basis of what you have just said, Mr Deputy Speaker, I will proceed so that others can get in.
In the light of all that I have said, how can we not conclude that the UK Government’s so-called national living wage is not a living wage at all? By contrast, the Scottish National party Government have long championed the payment of the living wage and they see the real benefits to our economy of treating working people much more fairly.
Paying the real living wage—not the pretendy one—makes economic sense for employers. It increases productivity, reduces staff absence and reduces staff turnover. All the research on this area bears that out. Some 80% of employers felt that their staff delivered better quality work after paying the living wage and 75% of employees agreed that their work improved after receiving it. We know that low pay is a driver of in-work poverty, so with around 20% of Scotland’s workforce still earning less than the living wage, there is still much more work to do. However, the UK Government’s so-called national living wage also creates problems because it discriminates against people under 25. People aged 24 do not have a cheaper lifestyle than those aged 25, so the distinction is false and spurious.
The real living wage pays all workers over 18 years old the same pay. I am proud that Scotland has the highest proportion of employees paid the living wage—some 79.9%. A job should help people out of poverty, not keep them there. It is important that we understand that a real living wage makes a real difference to the lives of working people. It ought not to be controversial that workers earn a wage that they can live on. I wish the UK Government would take a leaf out of the Scottish Government’s book. The Scottish Government have long championed the living wage, understanding that it is important and it is a matter of social justice that people earn a minimum standard of living, not a wee pretendy national living wage, as the Government try to tell us.
Several hon. Members rose—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. The two Front-Bench speakers have nine minutes each.
Chris Stephens (Glasgow South West) (SNP)
It is a pleasure to take part in this debate. I congratulate the hon. Member for Mitcham and Morden (Siobhain McDonagh) on securing the debate. I know that she has been a tenacious campaigner on the issue and has contacted many MPs about it. I am pleased to support the motion in her name.
It has been an excellent debate. I look forward to the hon. Member for Bishop Auckland (Helen Goodman) telling us on a future occasion what the pay rates of the butlers and housekeepers are in Mr Morrison’s castle. I want to pick up on some of the themes in the speeches of the hon. Members for Halifax (Holly Lynch) and for Oldham West and Royton (Jim McMahon) in particular.
As others have said, the UK Government’s national living wage is not a living wage, but an additional tier of the national minimum wage. The national living wage does not benefit those under 25, who still face the lower rates of the national minimum wage. I view that as direct discrimination against young people. Differential pay for young workers is not acceptable and our long-term aspiration should be that the living wage becomes the norm across the board. There is no justification for paying people in their early 20s 25p an hour less than those who are younger.
Let us take the example of two workers in a fast food outlet, one aged 17 and the other aged 37. If they are both flipping hamburgers in that fast food outlet, surely they should be paid the same, but they are not. One is paid £4 an hour and the other is paid £7.20 an hour. Because of the way the Government have done the calculation and added the living wage to the national minimum wage, for someone who enters employment at 16 or 17 and stays with that employer, it will take eight or nine years to qualify for the highest minimum wage rate. No employer in the UK would keep a worker on a grade for that length of time before they reached the top of their pay scale. This is clearly discrimination against young workers, and it is one of the reasons why today’s young generation is likely to be poorer than generations before them.
There has been no adequate explanation in this debate of why the living wage applies only to those aged 25 or more. More importantly, as the hon. Member for Mitcham and Morden pointed out, the real issue is the enforcement of minimum wage rates. The National Audit Office confirmed last year that 209,000 workers were not paid the national minimum wage. That is a scandalous figure, and the pernicious practices of rogue employers who are trying other means to get round paying the living wage should be investigated. These are multinational companies that should be paying their tax and are not doing so. That should be addressed.
I support the comments of the right hon. Member for Orkney and Shetland (Mr Carmichael), who made the very serious point that somehow seafarers are exempt from the living wage and the national minimum wage. I hope Members will consider signing early-day motions 231 and 516 on this subject. The information that I have from the RMT is that seafarers are paid less than £2 an hour, which starkly illustrates the issue.
The so-called national living wage relates to average earnings, not living costs, and therefore cannot be a living wage. It is calculated according to the adequacy of household incomes for achieving an acceptable minimum living standard.
In Scotland the SNP continues to set the bar on fair work. On Monday 31 October the First Minister welcomed the new rate of the real living wage of £8.45 an hour, which will benefit thousands of workers in Scotland, and urged more Scottish organisations to sign up as accredited living wage employers. Peter Kelly, director of the Poverty Alliance, said on Monday:
“Today’s announcement of the new, increased, Living Wage rates of £8.45 brings a welcome pay rise to thousands of workers across Scotland. 430,000 people in Scotland still earn less than the wage they need to get by. This is an increase on the number of people struggling since last year’s figures. That’s why it’s more important than ever for leading employers to join the growing movement of businesses and organisations that are going further than the government minimum and making sure their employees earn enough to cover the real cost of living.”
The knowledge exchange project, carried out by the University of Strathclyde and the Living Wage Foundation, has found that implementing the real living wage encourages businesses to re-evaluate their approaches to staffing and payment, leading to more effective and efficient working patterns. Implementing the real living wage encourages businesses to re-evaluate their business model and increases skills development, staff performance, job satisfaction and staff retention.
According to the New Economics Foundation, one study found that when employers transitioned to paying staff at least the real living wage, they experienced significantly lower rates of staff turnover, reputational benefits, a reduction in sick leave, better motivated staff and an increase in productivity. A massive 80% of employers felt that their staff delivered better quality work after paying them the real living wage, with 75% of employees agreeing that their work was improved. One major UK firm found that paying contractor staff the real living wage cut staff turnover by half, saving it £75,000 on the value of a single contract.
There are now more than 624 Scots-based living wage accredited employers paying the real living wage, and the SNP Government have set a target of 1,000 by autumn 2017. I want to thank those living wage employers in Glasgow South West, including housing associations, Money Matters, Ypeople, Lifelink and Agripa, which is a local printing company.
Jack Dromey (Birmingham, Erdington) (Lab)
I welcome the Minister to the Front Bench. I congratulate my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh) on her fierce advocacy of the living wage, and on exposing those who seek to avoid their responsibilities, rightly naming and shaming employers such as Marks & Spencer. She is right that I have met employees in my constituency who are affected in exactly the same way, so I think that the Minister—I say this with respect—will have to be careful not to sound like an apologist for Marks & Spencer. I hope that tomorrow Marks & Spencer will hear this debate and do the right thing.
Fifteen years ago I was a founding member of the drive for the living wage, together with what was then TELCO, which became London Citizens, which became Citizens UK. I ran the organising department of the Transport and General Workers Union. In what was a moral alliance with TELCO, faith groups and community organisations, we organised and won the living wage for 3,000 cleaners in Canary Wharf and the City of London, tackling the obscenity of cleaners on the minimum wage cleaning the toilets and boardrooms of those who earn millions.
Next, I am proud to say that I organised the first ever strike in the history of the House of Commons to win the living wage. I have in my office to this day a cartoon from The Times showing, in a wonderful parody of Black Rod at the state opening of Parliament, a cleaner with a mop in one hand and a bucket in the other, knocking down the doors of this place. We won the living wage.
I am proud to say that Birmingham, the city I represent, is now the most advanced in the country. We have 4,000 directly employed people on the living wage, with cleaners such as Elaine Hook saying it has transformed their lives. She said:
“I can now afford the little things in life that have made such a difference to my life.”
The same is true of care workers, with the council now rolling out the living wage and saying, “Why should we pay the least to those who care for those we love the most?” There is also a whole raft of private sector employers, such as National Express and Aviva, that have said that the living wage is right for them and right for their business.
I say with respect to the Minister, who talks about what we “can’t afford”, that the evidence we now have after 15 years of experience shows that the living wage is good for workers—of that there is no doubt—because it ends working poverty and contributes to the dignity of labour. It is good for the employer and for business in terms of productivity, flexibility and reduced staff turnover. It is good for the family, and I remember one of the Canary Wharf cleaners saying to me, “Mr Jack”—he kept calling me Mr Jack—“previously I had to sleep on buses between jobs. I did between three and four jobs to make ends meet, and I bitterly regretted it because I never saw my kids.” It is good for the local economy, because if the low paid get an increase, they do not salt their money away in Swiss bank accounts; they go out and spend it locally. And it is good for the national economy, because the workers concerned pay more tax and claim less in benefits. Quite simply, it is good for our society, and this is about what kind of country we want to be. The kind of country we need to be to succeed in the 21st century is one with an economy that is not based on low pay and low productivity, but that recognises, crucially, that how we treat workers is vital to the quality of the service they provide and the product they produce.
Three issues have been identified today. First, my hon. Friend was absolutely right to talk about the industry of avoidance, which ranges from bogus self-employment in the gig economy—now exposed by the successful GMB test case last week—to companies such as Fujitsu that should know better. Right now, there is a dispute there involving my union, Unite. Last year, Fujitsu made £85 million in profit; it paid one director £1.4 million. Yet it has been resisting the living wage. Now that it has started—finally—to concede, it has been doing exactly the same as Marks & Spencer, cutting bonuses for the employees concerned. It is a case of now you see it—the living wage—and now you don’t. People lose so much money that they end up worse off. When my hon. Friend the Member for Bishop Auckland (Helen Goodman) said that this was about greed, she was absolutely right.
Secondly, we need to tackle age discrimination. Together with my hon. Friend the Member for Halifax (Holly Lynch), I met those young GMB workers earlier this week. It is simply wrong that someone who can join the Army or get married is not entitled to the living wage until they are 25. That is unacceptable age discrimination, and it needs to end. My hon. Friend quoted Rebecca, and the point that came out of that discussion was that this was somebody who was coming out of university and who had built up all sorts of money they had to pay back, including tuition fees, but who was not able to earn the living wage. In addition, there was Thomas, another young worker. He said:
“In the end I had to take more jobs and borrow money from my family which has now put me into debt, all because my work is apparently worth less than if I was born before 1991.”
That is unacceptable age discrimination, and we are determined to stand up for the young people of this country and their entitlement to the living wage.
Thirdly, this is about the real living wage. With respect to the hon. Member for Kingston and Surbiton (James Berry), who may have had a damascene conversion on these issues, I remind him that the Conservative party resisted the national minimum wage every step of the way, year in, year out. The conversion is welcome, but I need to put history right.
The real living wage matters because, sadly, not least as a consequence of Government policies, we have had a low-wage, low-investment, high-debt economy, in which productivity has stagnated. We have an economy of grotesque contrasts. Andrew Haldane of the Bank of England has exposed that, whereas 30 years ago £10 in every £100 would go on company dividends, the figure is now £60 to £70 in every £100, with labour and investment being increasingly squeezed. Average weekly earnings are not expected to return to pre-crash levels until 2020, following the longest fall in wages since world war two. Between 2007 and 2015, wages in the UK fell by 10.4%—a drop equalled only in Greece. According to the ONS report, 3.9 million people in the UK are in persistent poverty. The Trussell Trust gave out more than 1 million three-day emergency food supplies through a network of 424 food banks in 2015-16.
Working poverty is quite simply shameful in 21st-century Britain. My hon. Friend the Member for Oldham West and Royton (Jim McMahon) was absolutely right to say that we are determined not only to enforce the existing national living wage properly and to prevent employers from taking other money away from employees who enjoy it, but to fight for a higher national living wage and ultimately to win. That is why we have set out a more ambitious approach than the Government of £10 an hour by 2020.
In conclusion, I pay tribute to all the hon. Members who have stood up today for the working poor and a proper living wage. I also pay tribute to the whole range of players from the public and private sectors who have been involved nationwide over the past 15 years, but in particular to Citizens UK. Had it not been for its work, we would not be where we are now. It has made and changed history with an idea that is in our blood in the Labour party, which is that no one should endure working poverty. The dignity of labour is paramount, and that means a wage with which someone can enjoy life with their family and kids, without having to scrimp and save, which has been the case for too long, and which still endures, in this country.
Siobhain McDonagh
I thank the Backbench Business Committee and all the Members who have contributed to this great debate. This, in essence, is about fairness. If someone is promised a pay rise, they should receive a pay rise. There are employers—large, well known, respectable companies—that are simply not doing that. They can dress it up whichever way they like, but that is what is happening, and we as politicians of all parties need to call it out. The vote for Brexit was in part a cry from people that life is not being fair—that they are not having the opportunity to get on; that there is no connection between productivity and pay; and that a fair day’s work does not get a fair day’s pay. If we are to keep our country together and get everybody to act as one, we need to ensure that that happens, and it will happen only if we do what we say and take on all those companies, well known or otherwise.
Question put and agreed to.
Resolved,
That this House recognises Living Wage Week which began on 31 October; believes that the use of the introduction of the national living wage to drive down conditions and take-home pay is against the spirit of the law; calls on the Government to close down those loopholes which make this possible; and further believes that any move to reduce the value of the national living wage to a level below the promised £9 per hour in 2020 is unacceptable.
Business without Debate
(8 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text
Care Homes for Older People
(8 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Peter Heaton-Jones (North Devon) (Con)
I am delighted to have secured this debate about the regulation, inspection and complaints process for care homes for elderly people. Let me be clear about something from the start. In half an hour on a Thursday afternoon, it is not my intention to tackle the huge, overarching issue of social care provision in this country.
Peter Heaton-Jones
Members on both sides of the House know that social care provision is one of the biggest challenges that we face, but that debate must be for another day. My debate is about something very specific: the way in which privately run care homes for elderly people are inspected and regulated, and the process that exists to raise complaints when relatives believe that something is going wrong. This is vital for two reasons. First, we are talking about nothing less than the welfare of vulnerable elderly people. Secondly, I believe it is possible to make significant improvements at relatively little cost, and I hope in the next 15 minutes or so to set out why.
Before I do so, I will provide a little background. Why have I taken up this cause? Three years ago, while I was still a mere parliamentary candidate, a local resident in North Devon told me a very moving story. John Barrass’s mother, Vera, a former resident at a private care home, died in 2009. Mr Barrass had serious concerns about the care she received in the final weeks of her life, and believed that a poor system of inspection, regulation and complaint handling was a significant factor. Specifically, he believed that a mechanism did not exist to allow him satisfactorily to raise his concerns about shortcomings in his mother’s care.
I do not seek to reopen that case, and neither does my constituent. In the years since his mother died, Mr Barrass pursued all avenues available to him to have her case fully investigated. He invariably hit a brick wall, so he began to look beyond his individual circumstances to examine instead the more general question of how care homes are inspected and regulated, and how complaints are dealt with. He came to the conclusion that the system was simply not fit for purpose, and he met me to explain why. That was the birth of a long campaign, which reaches another milestone with this debate.
Tomorrow marks the first anniversary of my raising this matter in Westminster Hall on 4 November 2015. Since then, I believe we have made some progress, but much of what I said at the time still stands today. What I have to say is based largely on a report produced by Mr Barrass, which I have here, called “Care means care, Justice in care”. The report was created in memory of his late mother Vera who, in Mr Barrass’s words,
“spent a nightmare in care,”
which led him to spend seven years producing this document.
I have helped Mr Barrass to take this to the very top. The previous Prime Minister, my right hon. Friend the former Member for Witney, received a copy and arranged a meeting with the former Minister, my right hon. Friend the Member for North East Bedfordshire (Alistair Burt). I am delighted to see him in the Chamber and pay tribute to him for the work that he did in this area, and for his sincere engagement with me and this campaign. Recently, the document was sent to the current Prime Minister. I quote Mr Barrass’s letter to her:
“I cannot bring my mother back or stop what I have agonisingly had to witness and go through, but I can try to stop this happening to others”.
I agree. An estimated 300,000 older people currently live in some 15,000 registered care homes in England. The average age of those people is 85, and a significant proportion suffer from dementia. They are largely without a voice, and that needs to change.
Jeremy Quin (Horsham) (Con)
I congratulate my hon. Friend on his campaign and his persistence with it. The matter affects many of us in this House; my constituents are still concerned about Orchid View care home and the issues that arose out of that. Does he agree that we have to learn from the mistakes of the past? We should have proper inquiries and proper investigations, and we should learn from those mistakes.
Peter Heaton-Jones
I thank my hon. Friend; I am sure that the Minister will have heard his comments. We need to move forward, and when things go wrong, we need to put them right.
The body responsible for the regulation and inspection of care homes is the Care Quality Commission, with which I have worked closely since launching this campaign. I believe that it is listening, but there is still considerable room for improvement. Today, the CQC’s website tells us that of the 448 care homes it has inspected most recently, a staggering 200—45%—have been rated as “requires improvement” or “inadequate”. There is no reason to believe that those figures are unrepresentative of the sector as a whole, which means that more than four in 10 of all establishments are not reaching the required standard. Surely the purpose of any system of inspection and regulation must be to drive up standards. The figures alone suggest that the current system simply is not working.
In June 2013, the CQC issued a consultation called, “A new start”, which proposed a whole new approach to inspection across all sectors, including care homes. That approach was confirmed in October 2013, and the new inspection regime was introduced. I broadly welcome it, but there are still huge question marks over its implementation. The original deadline for carrying out an initial inspection of all care homes was February 2016. However, in July 2015, the National Audit Office found that just 9% of care homes had been assessed because of a shortfall of about 160 inspectors. Not surprisingly, the original February 2016 deadline to complete the work was not going to be met, so it was pushed back to this October—last month. Yesterday, when my office asked the CQC for an update, it told us that it is
“committed to completing the first phase of the comprehensive inspection programme by March 2017”.
In other words, this new deadline—the third—is more than a year later than the original target.
I absolutely recognise that the CQC faces many challenges. The managers and inspectors are working hard, but my point is that we would not accept a delay of more than a year in the inspection of NHS services, so we should not accept it just because we are dealing with private sector care homes. We are still talking about vulnerable people who might well be suffering. We need to get a grip on this problem and to challenge the CQC to undertake its inspection programme in as timely a way as possible. I seek to be helpful when I say, “Let us, as a Government, work with the CQC to ensure that it delivers what seems to me to be such an important inspection programme without further delays.”
That brings me to another major area of concern: the CQC’s role in handling complaints, and indeed the role of myriad organisations and authorities involved in this area. What can someone do if they fear that an elderly relative is being neglected or mistreated, or is not being given the right healthcare? What can they do if they fear that their relative’s life might even be in danger, and the care home provider has dismissed the complaint or will not even listen to it?
When things go wrong, and a member of the public needs to make a complaint against a care home, they are faced with a bewildering labyrinth, and that needs to change. The website of the CQC, the body responsible for the regulation, says that the CQC
“is unable to investigate individual complaints”
against providers. To many people, that will seem odd.
Many people are in care homes commissioned by their local authority, so that offers another route for making a complaint. However, the complaints procedures in many local authorities—I speak as a former councillor in a unitary borough—consist of several layers, shall we say, and such a system does not lend itself to a speedy resolution. Not all people in care homes are in places paid for by local authorities, but even if they were, their complaint may fail to get through those many layers.
Should such an individual go to the Parliamentary and Health Service Ombudsman? Again, no, because that is another brick wall. The ombudsman says:
“By law the Ombudsman cannot look into complaints about privately funded healthcare.”
There is another possibility, which is an organisation called the Independent Healthcare Sector Complaints Adjudication Service. The ombudsman’s website states that people “may”—I stress that word—“have the option” of going to that organisation, which covers some independent healthcare providers, but if the healthcare provider of the person concerned is not one of them, they are stuck.
In a nutshell, the system is bewildering. It lacks accountability and transparency, and would leave most people confused and frustrated. People simply do not know who to turn to when they are worried that something is not right. Given that level of confusion, let us imagine what the situation is like for people whose elderly relative is in a care home. They are worried and in an emotional state, yet still have to deal with an incredibly complex complaints procedure.
I believe we could solve this quickly and cheaply, simply by requiring every care home to display a standard notice clearly setting out the complaints procedure with the relevant contact details. It seems incredible—I use the word in its literal sense—that that is not already mandatory. I ask the Minister to investigate with the CQC the possibility of producing such a notice. Something that simple really could make a huge difference.
As for the longer term, in the document I referred to earlier, my constituent John Barrass is convinced that we need one body only to investigate, regulate and handle complaints about care homes, with that being its one and only purpose. That suggestion deserves serious consideration.
A further problem thrown up by this entire process has been highlighted effectively by an organisation in Devon—not in my constituency, as it happens, but elsewhere in the county—called Your Voice Matters. I pay tribute to its founder and director, Jenny Moore, who has done very good work in this area. I have met her a number of times, most recently yesterday, in preparation for this debate. The issue in question is the growing number of cases where relatives are banned from care homes simply for complaining. This can take the form of a complete ban or of restricted visits; in some cases, it has even been known to lead to the eviction of the elderly person from the home.
Your Voice Matters has launched a good campaign called “Rights 2 Speak Up 4 Care”. It has identified the issue succinctly. In a nutshell, it is that private care homes are defined in law as ultimate landlords. Quite simply, they can decide who goes on the premises and who does not. Families who raise concerns are threatened or banned. As I have said, sometimes residents are evicted, and a private paying resident is not protected under any legislation—not the Health and Social Care Act 2012 nor the Human Rights Act 1998, for example. A private care home also has the power to prevent health professionals from visiting the home. Let us think about that for a moment: a care home has the power to stop doctors and nurses going into it to visit its clients.
Something has to change. Recommendations from Your Voice Matters include legislation to close those loopholes and to give protection to all residents and their families, a review of the relevant legislation and an independent panel to offer a fair hearing should a private care home want to place restrictions on a family member or a resident. Your Voice Matters has been working on this for some time, and literally yesterday—just yesterday—there was something of a breakthrough. In the run-up to this debate, there has been a flurry of media activity, with TV and radio programmes covering the issue. Yesterday, the CQC published new guidelines on its website. Care homes will now be required to keep a register of any occasions when relatives are banned or people are evicted. I am not convinced that that goes far enough, but it is a start, and I will keep working with Your Voice Matters to ensure that we go further.
That campaign group has made a number of other recommendations that I will mention briefly, as they have considerable merit. It suggests there should be better protection for whistleblowers who wish to highlight shortcomings in homes, as well as better training, with a mandatory training course for all those who work in or manage care homes.
I have referred several times to my constituent Mr John Barrass. He has carried out an investigation lasting seven years but, as he says, he is only one of the 65 million little people in the UK—those are his words—who are very rarely listened to but whose experiences, and what they have witnessed and suffered, should not be ignored any more. He says:
“I just wish we had been raising these issues before mum had this serious stroke, and helped to change the care system. Maybe, just maybe, my mother would not have had to go through what she did and my father and I would not have gone through 11 years of suffering.”
I want to leave enough time for us to hear from the Minister, but let me be clear about one further thing before I conclude. Many fantastic caring professionals work in care homes. They do their jobs on low wages and care brilliantly for many people. The owners and managers of many care homes are committed to providing the best possible service. They face all the pressures of running a small business and the costs that that entails. There are good managers, investigators and staff at the CQC. I do not wish to criticise those who are doing well, but I do seek to call out those who need to do better.
I should briefly mention the many organisations and individuals who contacted me in advance of the debate. I am unable to name them all, but I have received good representations from the British Medical Association, Independent Age, Hootvox, which is an organisation looking at ways to measure the success or otherwise of care homes, and many other individuals and constituents.
I end with this thought. The problem is that we have a growing number of cases in which care homes are simply not coming up to scratch. I have spent many days, weeks and months on this, discussing it with my constituent John Barrass and the Your Voice Matters campaign group in Devon. Whenever we discuss it, we keep coming back to one thing. I said exactly this a year ago in Westminster Hall and I say it again now: this is not about processes, systems or organisations, but about people—people who do not have a voice in a system in which, let us remember, four in 10 care homes fail to reach a satisfactory standard on the CQC’s measures. That means that some vulnerable, sick and elderly people are not being properly cared for. That cannot be right. I look forward to hearing from the Minister. We have to do something and we have to act now.
Alistair Burt (North East Bedfordshire) (Con)
With the permission of my hon. Friend the Member for North Devon (Peter Heaton-Jones) and the Minister, I am grateful to be able to take just a moment to speak.
I am here to encourage both my hon. Friend and the Minister. I was very moved by the debate last year, which chimed with my sense that something needs to be looked at in the care system. The stone in the shoe or the grit in the oyster often brings something necessary to the surface. I am grateful for what my hon. Friend said about the progress made by the Department and the CQC in continuing to work to ensure that care homes realise their responsibilities to others. I encourage him and the Minister because great work is done in care homes. However, there are still dark corners on which the light must be shone. To protect families, it is essential that the things brought out by my hon. Friend’s campaign and the media in the past couple of days must come to an end to give the public confidence. I have every confidence that the Minister and her colleagues will continue to work on this and that we will be reassured.
The Parliamentary Under-Secretary of State for Health (Nicola Blackwood)
I thank my hon. Friend the Member for North Devon (Peter Heaton-Jones) for securing this important debate. He is a doughty campaigner. As he said, it is almost a year to the day since he last raised the issue in the House and he has taken much action since. I pay tribute to my predecessor, my right hon. Friend the Member for North East Bedfordshire (Alistair Burt), for his work. He has laid great foundations for the work we are doing now. As he said, care homes play a vital role in our society, but the decision to move into a care setting or place a family member there can be exceedingly stressful. It is essential that the public have confidence in the quality of care that they seek. Poor care, abuse and neglect are completely unacceptable at all times, whatever the cause, and we are determined to stamp them out.
My hon. Friend the Member for Horsham (Jeremy Quin) is right that we must learn from the mistakes of the past. That is why in October 2014 we introduced a tougher CQC inspection regime based on the five important questions that matter most to people: are services safe, caring, effective, well led and responsive to people’s needs? It is why we brought in a new criminal offence of ill treatment and wilful neglect, and why a fit and proper person test has been introduced to ensure that providers do not recruit directors who are known to have been responsible for unacceptable standards of care.
The CQC can and does take robust action against providers that breach regulations and standards, from issuing warning notices and fines, through imposing conditions on a provider’s registration, to cancelling that registration altogether. During 2015-16, the CQC took 901 enforcement actions in adult social care, ranging from warning notices to prosecuting providers.
The CQC now has specialist inspection teams, which under the leadership of the chief inspector of adult social care include people who have personal experience of care. Inspections are required to take into account the views of service users and their families. Furthermore, the great majority of its adult social care inspections are now unannounced. The timing of inspections is based on assessment of provider risk, but their frequency in usual circumstances can be expected to be at least every 24 months.
The CQC’s fundamental standards that registered providers are required to meet include two very important registration requirements. The first is the duty of candour, which requires providers to be open with service users about all aspects of their care and to inform service users where their failures are in their care. The second is, as I have said, a fit and proper person requirement for directors that ensures that accountability for poor care can be traced all the way to the boardroom if necessary. These standards now give the CQC an effective power to prosecute providers in cases where a failure to meet standards results in avoidable harm or a significant risk of such harm.
Jeremy Quin
Will my hon. Friend or one of her ministerial colleagues kindly meet me and my hon. Friend the Member for Crawley (Henry Smith) specifically on that point in relation to Orchid View? We would be most grateful if that was possible.
Nicola Blackwood
I am absolutely sure that the Minister with responsibility for this area will do so.
The point I am making is that together we now have a more robust inspection standard and the fundamental standards to ensure greater accountability for providers of unacceptable standards of care. The CQC now has a much stronger baseline of information that tells us about the quality of adult social care across the country. From October 2014 to the end of July 2016, it inspected and published ratings for more than 16,000 adult social care services, out of a total of some 25,000.
As my hon. Friend the Member for North Devon highlighted, I recognise that delivering this more comprehensive inspection programme has taken longer than originally planned. The National Audit Office itself acknowledged that the CQC would have been hard pressed to have been aware of the amount of work needed to complete the initial round of inspections and re-inspections. The CQC acknowledged that it experienced early difficulties in recruiting sufficient inspectors with the right specialty and calibre. These problems are now resolved and the Department agreed with the CQC that it should consider the quality and rigour of inspections, and having the staff to carry them out, as the most important issue. The CQC is now on track to complete adult social care inspections by their published deadline of March 2017. We are closely monitoring its progress towards that delivery date.
We should be pleased that this work is starting to bear fruit. We have seen improvements since the observation that
“four in ten establishments are not reaching a required standard.”
At the end of July 2016, 72% of all adult social care services were rated good or outstanding, compared with 60% when the CQC published its findings in the 2014-15 “State of Care” report. The 2015-16 report shows that about 70% of care homes were rated good or outstanding, and 2% of all adult and social care services were inadequate at the end of July 2016, compared with 7% when the CQC published its last report. These quality ratings matter, because they are an important starting point for driving improvements. They are an encouraging early sign that this is happening.
The regulation of adult social care has three key roles to play: to identify poor practice and to take action to protect service users from the risk of harm; to encourage improvement by identifying areas of weakness; and to highlight and share good practice and success. All those roles are built on the foundations of effective use of data and rigorous inspection. The evidence shows that this is now happening. I would like to quote the National Audit Office, which confirms that the
“CQC has made substantial progress since 2011 and its new regulatory model strengthens the way it monitors and inspects hospitals, adult social care providers and GPs”.
We are by no means complacent, and we recognise the work that needs to be done to ensure that we are exactly where we want to be. Care homes look after some of the frailest people in society, and if there is a possibility of a home closing, or of other serious problems, it is completely understandable and reasonable for the families to have the reassurance that it will end up in the position they want it to be.
In recognition of the wider social care challenges, the Government are giving local authorities access to £3.5 billion of new support for social care by 2019-20. Since April, councils have been able to introduce a new social care precept, enabling them to increase council tax by 2% over the existing thresholds. This could raise up to £2 billion a year for social care by 2019-20. In addition, from April 2017, the spending review will make social care funds available for local government, rising to £1.5 billion by 2019-20 and to be included in the better care fund. Together, the new precepts and the additional better care fund contribution means that social care spending will increase in real terms by the end of the Parliament. Funding issues, however, are no excuse for poor care or—worse—abusive treatment. It does not cost any more to treat someone with kindness and compassion and to respect their dignity.
Finally, I want to address the important concerns around complaints that have been raised this evening. I know my hon. Friend is due to meet the Minister with responsibility for community health and care shortly on this matter and that he has previously met the Minister with responsibility for care services, the local government ombudsman and the CQC’s chief inspector. On the earlier point that he raised, I want to assure him that there is a statutory requirement for care home providers to operate a complaints system. Care homes are held to account for the effectiveness of the complaints process by the CQC.
We know from discussions we have had that the system is not working perfectly. Despite the progress we are making, we still hear too many stories that highlight people’s real concerns about quality and safety in social care—and we are determined to do better. We also hear that those receiving care or their families can be reluctant to make a complaint for fear of the consequences, especially if it is about a care home where someone is living. Indeed, only this week there was a story on the “Victoria Derbyshire” show about care homes banning relatives who made a complaint about the quality of care. We find that completely unacceptable. It is right that people and their families should feel able to raise concerns without fear of reprisals.
Ministers and the sector are looking to develop an adult social care quality strategy that will look at complaints and the culture of why people fear speaking up, as well as how we can improve the system to make it easier for them to complain. Care homes must have a complaints procedure, and if people are not happy with the response they receive the local government ombudsman can investigate complaints on their behalf. It is clear that everyone—not just the Government, and the CQC in its role as regulator, has a part to play in bringing about improvements in the quality of adult social care.
The Government are committed to improving the quality of social care, because care homes play a vital role in our society. There are many good and even outstanding homes, and we need to encourage them to share best practice so that it becomes the norm everywhere. We know that while a robust regulation and inspection regime is a key part of encouraging providers to improve, it is not the only influence. Sustained quality demands a commitment from everyone—from staff and providers to commissioners, funders and regulators—to make adult social care the best it can be. We are committed to working with all parts of the care system to make sure that we achieve just that, because our constituents deserve no less.
Question put and agreed to.
Ministerial Correction
(8 years, 1 month ago)
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Business, Energy and Industrial Strategy
(8 years, 1 month ago)
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Margot James
My hon. Friend said that there was a great deal of disquiet among small retailers in his constituency about the programme to make tax digital. I have heard such disquiet in my meetings with the Federation of Small Businesses and discussed it with the Financial Secretary to the Treasury. There are some signs of progress. There is no chance of the programme being rowed back or changed radically, but the Treasury is consulting on changing the threshold and removing unincorporated businesses entirely. It is also consulting on delaying its introduction for one year for businesses of a certain size, and there is even the possibility of some financial support for very small businesses. So, the Treasury is listening. I think the consultation deadline is fast approaching, so I urge my hon. Friend to make haste in contributing his views on behalf of his local retailers. — [Official Report, 2 November 2016, Vol. 616, c. 390WH.]
An error has been identified in the response I gave to my hon. Friend the Member for South Thanet (Craig Mackinlay).
The correct response should have been:
Margot James
My hon. Friend said that there was a great deal of disquiet among small retailers in his constituency about the programme to make tax digital. I have heard such disquiet in my meetings with the Federation of Small Businesses and discussed it with the Financial Secretary to the Treasury. There are some signs of progress. There is no chance of the programme being rowed back or changed radically, but the Treasury is consulting on changing the threshold and removing some unincorporated businesses entirely. It is also consulting on delaying its introduction for one year for businesses of a certain size, and there is even the possibility of some financial support for very small businesses. So, the Treasury is listening. I think the consultation deadline is fast approaching, so I urge my hon. Friend to make haste in contributing his views on behalf of his local retailers.
Implementation of the 1995 and 2011 Pension Acts
Westminster Hall
(8 years, 1 month ago)
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Steel Industry
(8 years, 1 month ago)
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Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
I beg to move,
That this House has considered the future of the steel industry.
I draw the House’s attention to my entry in the Register of Members’ Financial Interests as a member of the Community trade union. I thank my hon. Friend the Member for Redcar (Anna Turley) for co-sponsoring the debate, which is much needed to get the steel industry crisis back on the national agenda.
The steel industry is not a dead or dying industry. That is something I and colleagues here today have repeated throughout the crisis and prior to it. I know everyone here understands the importance of the industry, but some confusion persists, so I hope colleagues will understand if I reiterate why the steel industry is particularly significant to the UK.
Fundamentally, steel is a strategic and foundational industry. If the Government want to rebalance the economy away from London and to build our manufacturing sector, they simply must support the steel sector. The products of our steel industry supply the booming automotive manufacturing industry and the aerospace manufacturing industry, among others. A successful steel industry helps those industries and a weak one damages them. As well as being the foundation for other industries, steel is strategically important because it allows us to retain the capacity to build infrastructure projects, from Trident to transport to energy. It means our security, our ability to compete and our ability to keep the lights on are not dependent on other countries.
As an aside, look at the problems the French Government are having in building the Flamanville EPR nuclear reactor. In the summer, France’s nuclear safety authority found weaknesses in what I believe is Japanese-made steel in the reactor, which further delayed the project and raised safety concerns. British steel, such as that made at the main competitor to that manufacturer, Sheffield Forgemasters, is more reliable, and I hope it will be used in the similar Hinkley Point C EPR reactors. That is a simple example of the importance of using high-quality steel for infrastructure and why choosing to use British steel for such projects is not just the patriotic choice, but the best choice.
Nic Dakin (Scunthorpe) (Lab)
I congratulate my hon. Friend on securing this important debate. Does he agree that if we really are concerned about taking back control, we need control of our steel industry, so that our infrastructure is built with UK steel?
Tom Blenkinsop
I thank my hon. Friend for raising that point. There have been warm and welcome words from the Government about an industrial strategy. The Opposition have been talking about that for the past six years, but be that as it may, the Government are there and we want to work with them over the next few months to form that industrial strategy. There are immediate issues that need to be resolved, hopefully in the autumn statement, and there are further long-term issues in relation to an industrial strategy, how we form that strategy by sector and how the steel sector needs specific treatment in order to go forward.
The other aspect of the steel industry’s significance is the jobs it provides, the communities it forms and has formed, and the culture of which I am proudly a part. More than 30,000 people work in the steel industry, from watermen to control panel engineers and from craft workers to lab technicians. What is important is not only the numbers but where in the country those jobs are, because as well as adjusting the mix of our economy to include more manufacturing, a long-term aspiration of successive Governments has been to rebalance the economy away from London. The UK steel industry supplies more than 10,000 jobs in Yorkshire and the Humber, 8,500 in Wales, 4,000 in the west midlands, 2,000 in my own region, the north-east, and at least 1,000 in Scotland. Those regions are desperate for jobs and investment, and they have been the worst hit by the decline in manufacturing and domestic industry.
Simply put, if the Prime Minister is serious about spreading opportunity around our nation, she cannot abandon the steel industry. Steelworkers across the UK are not asking for charity, merely for access to a level playing field on which to compete with steelmakers from across the world, but in a number of ways, UK steel is fighting an uphill battle. The trade tariffs that protect American steel producers from Chinese steel are many times those in place to protect British producers. Despite limited Government assistance, energy for British steel producers remains more expensive than for our European competitors, and Government-led infrastructure projects, most recently Trident, continue to use foreign-made steel instead of British alternatives.
Where our industry can compete and has been leading the world is in our people and our skills. It is difficult to estimate the value of the institutional knowledge and experience in Port Talbot, Stocksbridge, Skinningrove or Sheerness, but it has helped those communities to stay afloat and their steelworks to function. The Materials Processing Institute in Teesside is producing world-leading research, and has received visits from German, Slovak and Swedish Government representatives who wish to draw on our expertise in this country.
It is testament to the combination of those institutional skills, the experience of steel communities around the country and the cutting-edge research of institutes such as the MPI that the productivity of the steel industry has consistently improved over the last decades. It is for those reasons that the UK steel industry should be seen as an opportunity—a reservoir of potential—rather than, as it is sometimes called, a burden on a modern economy.
We should be wary of how quickly that reservoir can evaporate. A steel or metals industry cannot be created from scratch overnight. The average age of a steelworker is growing, and the current crisis means fewer young people are coming into the industry. Without a secure future, the skills developed over decades could be lost. Those skills are not important only for the steel industry. I recently met representatives from Metalysis—a company that uses an innovative process developed at Cambridge University to produce metal powders and alloys that will be vital for 3D printing—who emphasised to me the importance of those skills grown in the steel industry for their business. To allow that experience and research reservoir to dry up with the decline of the steel industry would not merely affect the future of steel in the UK, but would cut off our competitive advantage for the metals sector.
Rather than let that advantage disappear, we should build on that potential by creating a steel sector catapult and a metal materials strategy, through which knowledge can be shared, built upon and turned into results for British industry. I hope the Government will work with MPI and members of the all-party parliamentary group on steel and metal related industries to fashion a new bid for that catapult. That is something the Government could commit to today that would show that they are serious about the future of the industry. I hope the Minister will remark on that later.
Steel in the UK is not an odd nostalgia but a viable industry with a future. It does not need charity but access to a level playing field on which to compete. If given that access, it is reasonable to believe the industry could be the world leader it already is. There are immediate challenges, though. The five asks on energy costs, business rates, Chinese dumping and procurement have still not been fully delivered on by the Government, and they demand the Government’s immediate attention. They can be acted on now and the solutions announced in the autumn statement.
The drop in sterling and the change in global steel price is not a solid foundation on which to build the steel industry’s future. The Government must not believe that their short-term work is done. They must take action, with long-term milestones and with a long-term view, so that not only people in the House know where they stand, but investors in the industry know exactly what the 20 or 30-year view is, and associated industries that rely on steel know exactly what to expect.
Angela Smith (Penistone and Stocksbridge) (Lab)
Members across the House could be forgiven for thinking that the Government have assumed that, because the sense of immediate crisis appears to have passed, their foot can be taken off the brake and that we can rely on the industrial strategy emerging next spring to address the problems. Does my hon. Friend agree that that is definitely not the case, and that the Government need to keep at this, on top of it, and give it the priority it deserves now?
Tom Blenkinsop
I thank my hon. Friend for raising that. There are a number of issues within that general question that still hang over the industry. I am at pains to talk about the broader industry and the new, smaller companies that are emerging. The debate tends to be dominated by issues around Tata, for obvious reasons, but we need to look at how we develop smaller companies, hence our desire for the steel sector catapult to be established. Although those smaller companies have come to the fore, they have told me directly that if a steel sector catapult existed, they would have been able to get where they are now a lot quicker and with a lot less capital, which would release more capital to do other things or to develop other research and development potential. One of the most profound issues, which I will go into later on, is the British Steel pension scheme.
Producing steel is a massively energy-intensive process. Despite the Government’s policy, which compensates energy-intensive industries for the disproportionate impact of carbon reduction measures on them, British energy prices are still far higher than those in Germany and elsewhere in Europe. The steel industry is aware of the need to transition to low-carbon energy sources, but only in a way that makes business sense.
Everyone I have spoken to in the steel industry welcomes the inclusion of the energy portfolio in the same Department as the business and industry strategy portfolio. That makes sense, and it is about time it happened. However, the Department has yet to respond to the EEF’s five recommendations aimed at addressing the competitiveness of UK energy costs. Since the initial meeting with the Department for Business, Innovation and Skills on this issue in June, EEF estimates that the disparity between UK and European energy costs means the UK steel industry has paid £20 million more in energy bills than their continental competitors. What is being done on energy costs? What benefit has the sector felt since the creation of the Department for Business, Energy and Industrial Strategy?
Mr Peter Bone (Wellingborough) (Con)
The hon. Gentleman is making an excellent speech. Can he explain why energy costs are so much lower in continental countries than here? Is it something that we as a Government are doing wrong, or is there some other reason?
Tom Blenkinsop
Other colleagues may want to comment on this, but my view is that in general the energy sector is predisposed to giving the individual consumer cheaper prices, with the costs going more towards manufacturing. The consequences of that have led to some manufacturers going off grid; and a consequence of that may be higher prices for the individual consumer, as capacity cannot be fulfilled by larger consumers. In European countries such as Germany and Holland, there are discounted energy costs for large manufacturers but with the understanding that the individual pays higher bills. There is consensus, to a certain degree, that people are willing to pay higher energy bills in order to maintain manufacturing in their country so that they have a job—but that is with open political consensus. We as politicians need to talk about what type of economy we want. Do we want to move it away from finance and services back to a more balanced economy? We need to talk about that in terms of energy policy, but I will go into that issue in more depth later.
The Government can act to support the steel industry’s attempts to improve its energy efficiency and thereby cut emissions and costs by providing an energy efficiency fund. Such a fund could supply capital for companies to make improvements and efficiencies in the way they use energy, meaning they can better compete on energy prices and millions of tonnes of carbon emissions can be cut.
The second immediate challenge is that of the British Steel pension scheme. The scheme’s deficit, estimated at £700 million earlier this year, has been a major obstacle to the sale of Tata Steel sites. In response to that, the pension scheme’s trustees have asked if it would be possible to alter the scheme’s benefits in order to make it viable without a sponsor employer. The Government have been consulted on that option and on the alteration to section 67 of the Pensions Act 1995 necessary to alter the scheme’s benefits. We are yet to hear a statement on the consultation, but recently the pensions deficit has been drastically re-estimated at £50 million, due to the trustees taking advantage of the post-Brexit economic situation—I must mention that that has more to do the British Steel pension scheme’s investments in other nations’ stock, which has boosted the pension fund.
If interest rates were to rise and the scheme’s asset value continued to increase, hypothetically the trustees may wish to withdraw their request to change the scheme’s benefits, and therefore a change in section 67 of the Pensions Act may not be necessary. The compounded complications are that any change to section 67 could affect any other workplace pension scheme, and any other representative of any other constituency without a steel interest would be highly hesitant about voting for such an action. I hope we can keep in constant contact with the Minister, so that if the scheme’s benefits continue to rise, we can look at measures short of the scheme falling into the Pension Protection Fund, because that is fundamental to the existing Tata sites. The Government must act to explore that possibility, provide certainty in an uncertain situation and secure the continued viability of Tata Steel sites. The BSPS is a fulcrum of the continuation of the current Tata sites.
As well as the five asks, strategic decisions will need to be made soon by Government that have the power to end or secure the industry’s future. Those are decisions that come in the wake of Brexit. There are many implications for the steel industry of the UK leaving the European Union, from workers’ rights to an ability to attract expertise and investment from the continent, but I wish to focus on one: trade, and in particular access to markets and trade defence measures.
Earlier this week, I warmly welcomed the Government’s actions to secure investment, jobs and growths at the Nissan plant in Sunderland, via the production of the two new Qashqai and X-Trail models. That move is warmly welcome, not least because Nissan is one of the largest buyers of British strip steel, largely from Tata Steel sites. It is a shame the Government did not take the same decisive action when it came to the closure of the SSI Redcar steel plant over a year ago, which I am certain my hon. Friend the Member for Redcar will talk about. None the less, it seems the Government have reassured Nissan that it will have access to European markets tariff-free. That is fantastic news, but it is not just Nissan or the automotive industry that rely on access to tariff-free trade with Europe.
Over half of all British steel exports are to the European Union, therefore any tariffs on British goods would damage the health of UK steel. I hope the Minister will commit today to providing steel producers with similar assurances. Doing so would again demonstrate this Government’s commitment to the sector, and of course do much for those whose jobs who are dependent on the steel trade. The Nissan deal also reflects how big and powerful the industry players and the automotive lobby is as a whole. Steel requires its players to come together and command such attention. It must also gain the understanding of the auto sector and all the other industrial lobbies that the UK steel supply on their doorstep requires their clear verbal support.
Leaving the European Union presents both an opportunity and a threat in terms of trade defence measures—a threat in that it means we would leave behind the trade defence measures provided by the EU, modest and limited though they are, and an opportunity in that it allows this country to implement our own trade defences. As many here will know, the over-production of primarily, though not exclusively, Chinese steel and its dumping, sometimes at below-cost prices, in foreign markets poses a real and significant threat to industry here in the UK. Currently the EU’s tariffs on steel differ by product: the highest import duty is about 73% on heavy plate steel, whereas in the US in March duties were set at over 265%.
While Chinese production of steel did slow as global demand dipped, the latest International Steel Statistics Bureau statistics show that Chinese exports remain at a year high, with August levels being some 7% above last year. The problem is not going to go away; it will certainly re-emerge. However, this Government seem to have set their face against trade tariffs on Chinese steel, as two quotes reveal. The first, from the Chancellor, was on granting China market economy status. He said:
“Our position on China’s market economy status is that we gave certain undertakings to China and believe that we are bound to go down this route.”
Recognising market economy status for China would limit our ability to apply duties on Chinese steel, potentially opening up our markets to a flood of cheap steel, undercutting domestic producers and risking thousands of British jobs.
Commitments made to endear ourselves to China should not take precedent over commitments to steelworkers or common sense. It is obvious that Chinese steel is not made under market competition conditions, and it is also obvious that by campaigning for MES for China, the Chancellor is campaigning against the interests of British steelworkers. This may be further complicated by Brexit. If we campaign for market economy status for China—as a country, I add; that is the Government’s position—while we are in the EU, will not this Government be obliged to recognise that once we can do so unilaterally after leaving the EU? Perhaps the Minister can shed some light on that.
The second telling quote came from the Secretary of State for International Trade. During his speech to the Conservative Way Forward group, the right hon. Gentleman, now infamous for calling British business people fat and lazy, said we
“must turn our backs on…voices that tell us: ‘It’s OK, you can protect bits of your industry, bits of your economy and no one will notice’”.
That seems to set the right hon. Gentleman against any industrial strategy and certainly against trade defence measures for the steel industry. I hope that that misapplication of free trade dogma to trade with a communist country and its state-owned and subsidised steel industry does not spill over into Government policy. I hope Ministers from BEIS have explained the absurdity of that position to the Secretary of State; if not, I fear someone will have to very soon. Those two aspects of the Brexit negotiations are fundamental to any industrial strategy and I hope the Minister will outline today the conversations he has had with and the cases he has been making to the Chancellor, the Prime Minister and the Secretary of State for Exiting the European Union about Brexit and our industrial strategy.
I would like now to address my own Front Benchers. As a party, we have been vocal in campaigning to save our steel industry, and we should be proud of that, but, if our party is to help to revive the steel industry in the UK, as I hope it will, and not merely be its pallbearer, we must stop cutting off potential demand for British steel by opposing or sitting on the fence over major infrastructure projects. Heathrow will require 370,000 tonnes of steel and could support hundreds of jobs in the industry. Labour does not seem to have a settled opinion—I know mine—and we must be clear. Trident will support British jobs in the steel industry, despite the Government allowing French steel to be used in the vessels’ hulls, but Labour’s own leadership casts doubt on our commitment to this project, despite party policy and a consensus at our conference and among trade unions to accept it.
Shale gas is an example. Our party has vowed to ban the practice of fracking. The GMB union called this decision ridiculous, nonsense and madness, and my union, Community, said the decision was rushed and did not fully consider the evidence. Both unions have since signed a memorandum of understanding with United Kingdom Onshore Oil and Gas, the industry trade body. Two proud unions, with large private sector bases and affiliated to our party, are asking the party to back a proposal that would provide jobs in regions across the UK—not just jobs, but secure, well paid jobs that would help to stop our reliance on autocratic nations for our energy. It would offer people, not least the thousands of offshore oil workers being made redundant, well trained, highly skilled, long-term roles, but we have denied them that option. Shale gas would cut energy prices for the steel industry more profoundly than any tax break or subsidy. On Teesside, it would provide a gas supply to a much-needed chemicals industry at 50% less than the cost of conventional North sea gas.
The infrastructure and sites would also require thousands of tonnes of steel. The viability of British-made welded steel pipes for fracking is currently being explored. It is vital to both Corby’s and Hartlepool’s pipe mills. The industry is moving ahead without the Labour party. We should be shaping the shale gas industry, not ignoring it for our own satisfaction. We should be making sure it is safe, that it uses British steel, that energy price cuts are passed on to steel producers and that they organise their workforce so that it can bargain collectively and secure benefits for local communities.
Blanket opposition to infrastructure projects may offer the false comfort of the moral high ground, but it is not responsible. Failing to make these choices is not the action of a Government in waiting who intend to deliver for steelworkers. As a party, we must be pro-jobs and pro-steel choices, and not just attend marches and wear badges. I hope my party will think about these issues and choose jobs over familiar, fashionable and flawed opinion.
Geraint Davies (in the Chair)
From one Tom to another, I call Tom Pursglove.
Tom Pursglove (Corby) (Con)
It is a pleasure to serve under your chairmanship this afternoon, Mr Davies. It is always a pleasure to follow the other Tom, the hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop), who is a passionate advocate for our steel industry and with whom I very much enjoy working. People out there in the country often take a dim view of the proceedings they see in Parliament, but I believe strongly that the work of the all-party parliamentary group on steel and metal related industries is incredibly important and crosses party lines, which have nothing whatever to do with our work. We all work together for what is best for our steel industry. All Members here this afternoon can be proud of that.
I welcome the Minister to his place. I have great regard for him. He is one of the hardest-working Ministers in the Government. I am also delighted that we have a Secretary of State from good, steelmaking stock, which brings a lot to this debate. He completely understands what is at stake, given his family background. I welcome both Ministers to their new positions and look forward very much to working with them.
It would be remiss of me not to thank the previous ministerial team for its efforts. The right hon. Member for Broxtowe (Anna Soubry) and I regularly disagree on certain matters, particularly in relation to the European Union, but I have enormous respect and admiration for her work and her engagement with Members who have steel-related industries in their constituencies. She went around the country visiting our steelworks and talking to employees, unions and site managers about the steps that needed to be taken. She should be given a lot of credit for that.
I pay tribute to the Community union and Roy Rickhuss, whom I enjoy working with. He is a real advocate for our steel industry. Roy’s representatives on the ground do much to ensure that the views of steelworkers throughout our steel sites are heard as part of these debates. Great credit should be paid to him.
I am proud of much of what the Government have sought to do to try to help our steel industry. We have moved the debate on energy compensation along and have a package in place. We have made great strides forward on procurement, and I will come to that. Although there is more work to be done on dumping, I, for one, have appreciated Ministers’ efforts to raise directly with the Chinese the consequences of what is happening.
The big concern in Corby—I visit the steelworks regularly to talk to the site management, unions and employees—is that there seems to be a bit of a vacuum. Not much information is coming from Tata on where we are, and this is at a time when we have had some positive announcements about other sites, such as Scunthorpe, where the workforce now have real certainty about the future. We need further certainty about Tata’s existing portfolio. I know that discussions are ongoing with ThyssenKrupp, but I urge that the message from this Chamber this afternoon is that Tata should say publicly as much as it can about the current state of play, which hangs like a cloud over our steel towns that are Tata sites. We must try to put an end to that uncertainty as quickly as possible and to do the right thing for our steelworkers.
There are three areas where Government leadership will be key in the coming weeks, months and years. The first is EU exit. I campaigned to leave the European Union and I am pleased that the British people’s verdict was that we should leave, but I accept that other people have sincerely held views to the contrary. Exit offers a real opportunity to our steel sector, but engagement will be crucial to getting it right, and we must thoroughly engage with the unions, the companies and the workforce to get the policy absolutely right. We need to understand the requirements, needs and aspirations of our steel sector for the years ahead.
I believe that when we leave the European Union we will have more tools at our disposal, but it is important to get that right. The Government will be able to act directly on dumping and state aid rules; they have had to go through Brussels in the past. We all agonised over the difficult few months when Ministers were going to Brussels and making the case for the energy compensation package, only to see the can kicked down the road. We eventually got to the right place, but it is welcome that in future the British Government will be able to put those things in play.
Stephen Kinnock (Aberavon) (Lab)
The hon. Gentleman is making a very insightful speech, but the fact is that the way in which state aid and the European Commission work is that national Governments must provide the Commission with a list of their priority cases. It is a matter of record, however, that this Government consistently failed to put the energy-intensive industries package at the top of that list. The Commission was dealing with cases as they came from our Government, so it was the failure of our Government to make that a priority. Only thanks to the pressure that we put on them did they suddenly put the energy-intensive industries compensation package to the top of the list, and the case was then resolved within three months.
Tom Pursglove
My understanding was that British Ministers were going over to Brussels regularly to make the argument for the energy compensation package. I remember having numerous conversations with Government colleagues about the importance of that, and they were certainly relaying the significance and severity of the delay and its impact on the industry. Again, I commend them for those efforts.
Another point is that outside the European Union the British Government would be in a position, if they wanted to, to emulate the sorts of tariffs that we have seen in the United States. We would be able to do that if we felt that it was in our national interest. Whereas before we would have had to try to enact it through Brussels, we would be able to do it directly. I think that we should look at all these things.
Hannah Bardell (Livingston) (SNP)
Forgive me, but I am a little confused. Was it not the UK that, in the EU, was holding back the EU from having strong anti-dumping measures? If the UK Government were not able to do that in the EU, how on earth does the hon. Gentleman think that outside the EU and with the Conservatives in charge, they will be able to do a better job? Perhaps he can enlighten me.
Tom Pursglove
I thank the hon. Lady for her intervention. The point that I am making is that outside the European Union, that will be entirely within the gift of the British Government. We will not have to get agreement from multiple member states to make progress on these things. I have consistently said that I think we should look at the tariff side and, where there is flexibility and opportunity to increase tariffs in response to particular problems, we should look to do that.
Mr Bone
My hon. Friend has been a champion of Corby steel since the day he became the Member of Parliament for Corby. The one thing that I want to pick up on in these exchanges is that people talk about “the Government”. We have a new Government, a new team, a new Prime Minister and new Ministers. Does my hon. Friend the Member for Corby (Tom Pursglove) agree that we have seen a different attitude to steel since we have had a new Prime Minister?
Tom Pursglove
I am grateful for the intervention. I certainly agree with that point and will touch on it later.
Of course, there is a particular challenge with the current tariff situation. Ministers have said consistently that one difficulty has been that some of the tariffs are bound up with other things; the impact on other things also comes into play. It would be much easier outside the European Union. We would be able to take those decisions ourselves. We would be able to take the decisions in isolation, separated out, and not have to get that wider agreement from other nation states.
Tom Blenkinsop
I thank the hon. Gentleman, a vice-chair of the APPG, for giving way. Whether we are in the European Union or not, that issue is resolved. On the issue of tariffs, he agrees with me; we have some consensus there, and we are willing to work together to try to build in those trade defence mechanisms. The real issue is Chinese market economy status. The Government are advocating a policy of no tariffs with China—a country that is the primary problem, in terms of dumping, in the world. That presents significant complications for the UK steel industry, and we need to work together to try to change the Government’s opinion about market economy status for China so that we can defend not just steel but manufacturing generally in Britain.
Tom Pursglove
Again, I am grateful for the intervention. I have consistently said that I think it is incumbent on British Ministers to make the point to the Chinese that if they want to play in the premier league, they have to play by the rules. That is fundamental; it has to be front and centre in our ongoing discussions with the Chinese Government as we try to make progress. That is absolutely right and proper. If they want to be regarded as a significant international player in trade, they have to play by the rules.
I welcomed what the hon. Member for Middlesbrough South and East Cleveland had to say about trade earlier, because I think that this issue will be crucial. What opportunities will there be to better export British steel around the world in a post-EU exit world? I ask that because the steel that this country produces is the best in the world. There is no doubt about that, and I think that we ought to be shouting from the rooftops, making the point that the steel that we produce is of that high quality, that it is good value for money because of that, and that we want to sell it the world over. I would be interested to hear the Minister’s thoughts on that.
I also want to know about some of the early cross-departmental discussions that are taking place. What is the current thinking? What is the interface between the different Departments to ensure that the steel sector is properly represented in those discussions? What work has been done to hear what the needs, aspirations and requirements are? I recognise that there will be many competing priorities at the moment, but for my constituents and me and for all hon. Members present, the steel issue is very pressing and we need to know what the direction of travel is likely to be.
On industrial strategy, I come back to the point about the emphasis of the Government. I very much welcome the shift in emphasis. The steel APPG, to a man and woman, campaigned for it. We always wanted to see an industrial strategy develop that would help to bolster the steel industry. I am proud to be part of a Conservative Government who are delivering on that, who have recognised the need for an industrial strategy that is designed to ensure that steel is properly represented in our industrial policy. That is a very big step forward; it is a step change. And I say that coming at the debate as a small-c conservative. I recognise that the Government do not have all the answers, but this is about getting the broad economic conditions right and ensuring that where there are opportunities for our industries to thrive and prosper, we try to fit all that together to ensure that it works and has the best possible outcomes.
An industrial strategy is key to ensuring that we have strong core industries in this country. We have all said for a long time that steel is fundamental to our national security. Having an industrial strategy means that policy discussion in this country focuses on that point and ensures that no community is left behind. In Corby, people feel acutely that the steel industry is what our town is all about. Our town was built on the steel industry; that is what we are about in Corby, and I think that this measure gives real regard to that. I would therefore be interested in a progress report from the Minister on where the thinking is on the industrial strategy, what engagement there has been and what opportunities he thinks that will bring for our steel towns.
On procurement, I commend the Government, because we have made enormous strides forward, working across Government, in recent months. Of course we must maximise the public sector opportunities that exist. Today we heard about the construction of a number of new prisons. I urge my right hon. Friend the Secretary of State for Justice to ensure that British steel is used. One of the sites is Wellingborough, which is 10 minutes down the road from my constituency. We can provide top-quality steel, probably within the hour, if that is what is needed to build that new prison.
We must ensure that these big, Government-backed infrastructure projects use British products, British content and British steel at every opportunity. I want to pick up the point made by the hon. Member for Middlesbrough South and East Cleveland about fracking, because Corby is one of the sites that would be strongly placed to provide top-quality steel for fracking. When the Government are looking at subsidies for renewable energy projects or any energy projects, it makes sense to hammer home the expectation that British content and British steel will be used. That should be the key condition.
However, this debate is not just about the public sector; it now has to be looked at also in the context of the private sector. I welcomed Heathrow’s commitment to use British steel in the forthcoming construction. I hope that that will lead the way in encouraging other companies and organisations around the country to use British content wherever possible. On most occasions, we can cater for their requirements, and if we do not cater for those requirements, we have the ingenuity and ability to innovate to make that happen. The industry should be given the opportunity to cater for these projects whenever possible, because it is morally right to use British steel. We have great quality and a great workforce, and we should feel the benefit in the supply chains in this country.
Earlier, there was an urgent question on air quality. In my view, it does not make sense to be bringing poor-quality steel across from other countries around the world when we can produce great steel in this country and reduce some of the transport costs and implications of shipping steel from all over the world. Overall, that must be better for air quality across the globe.
Those issues should be front and centre of what the Government, the public sector more broadly and the private sector ought to be championing. That is a key element of the debate. How does it link to the industrial strategy? That will be a very important consideration that we need to reflect on as we move forward. How does the whole thing link together to ensure that, from end to end, we do right by British steel producers?
I am a regular visitor to the Corby works and I pay tribute to all those who work there. They are incredibly talented and hard-working people. We have a remarkable workforce and we can all be exceptionally proud of that. Whenever I visit at the moment, I am asked about three key policy areas: where is Government thinking on the industrial strategy, on the EU exit and on procurement? We have to show leadership on all those points.
I am proud of Corby’s steelmaking—the quality of our product, our incredible workforce—and of our rich steel history, which is what the town of Corby is all about. I am proud of the Conservative Government for really trying to show some leadership and for listening, acting and getting out there in pursuit of solutions to help to secure the future of the industry. But I am under no illusions; I do not think this is going to be straightforward. It is not going to be plain sailing as we move to a world outside the European Union. It is going to be difficult and there are going to be bumps in the road. However, if we get out there and get the engagement right, we can have an enormously successful future chapter for our steel industry because we have got those broad policy foundations in place.
Geraint Davies (in the Chair)
From a small “c” conservative, to a big “L” Labour, I call Angela Smith.
Angela Smith (Penistone and Stocksbridge) (Lab)
It is a pleasure to serve under your chairmanship, Mr Davies. I congratulate my hon. Friends the Members for Redcar (Anna Turley) and for Middlesbrough South and East Cleveland (Tom Blenkinsop) on securing this debate. It is always timely to have a debate on steel, such is its importance to the economy, but at this particular moment, given the wide range of issues we face, including Brexit, it seems particularly timely.
I want briefly to go back to October 2015, when the SSI crisis hit TV screens. As we know, the company went into liquidation and 6,000 people lost their jobs. That is 6,000 men and women lost to the industry, potentially forever, and 6,000 families who face an uncertain future. Yet since the collapse of SSI and the problems that Tata faced earlier this year, although there have been some improvements in the conditions faced by steel producers—not least because of the 16% devaluation of the pound—there are still major problems facing the steel industry.
The Chinese dumping of steel continues, and the UK is still blocking attempts to put meaningful tariffs on that steel as it comes into Europe. It has never been about protectionism—this is a really important point. Rather, it is about effectively countering the hidden subsidies that the Chinese state has embedded in its own production of steel. I have listened to the Chinese and have heard them say they will roll out figures on their production and about how they are reducing the volumes of production, but they never, ever refer to the fact that they are effectively undercutting the global steel market by embedding subsidies in their pricing structures.
Let us not forget that we still have all the other issues that my hon. Friend the Member for Middlesbrough South and East Cleveland mentioned in his opening remarks: the five key asks that were developed some time ago by UK Steel, supported by the union Community and supported by parliamentarians across the House. My hon. Friend did an excellent job setting out the key strategic issues facing the industry at this point. I will not go through them all again, because he did that brilliantly and the case is made.
As would be expected of me, and because of the situation I face in my constituency, I want to focus briefly on the situation with the Tata holdings in the UK. Although the sale of Port Talbot has been suspended while Tata and ThyssenKrupp talk about a joint venture, Speciality Steels, which has plants in Sheffield—in Stocksbridge, in my constituency—and Rotherham, is still up for sale.
I do not apologise for rehearsing the point about the importance of the Stocksbridge plant. Members have heard me say before that the steel produced at Stocksbridge is in the top 7% of the value chain for global steelmaking. Two thirds of the aviation steel made globally is made in Stocksbridge: it makes steel for landing gear, for the Rolls-Royce engine and for the sliding doors on the aircraft body. It is an incredibly important and valued part of our steel industry. I have even heard it said—by people who frankly do not know a great deal about what goes on there—that there is effectively old-fashioned steelmaking going on in that facility, in something that looks like a shed. I know that the Minister has visited Stocksbridge and so entirely understands my point. What goes on inside that building—that very old facility—represents some of the best and most advanced steelmaking technology in the world.
I am incredibly proud of what Stocksbridge does, and I know that the community is too. We are confident that the plant will have a future and we know that the right investment plan can secure that future. It has got the vacuum induction melting facility, but it needs further capital investment if it wants not only to maintain its place in the value chain, but to move up it. That is the ambition: to move into the era of 3D printing mentioned by my hon. Friend. Stocksbridge wants to be able to produce—if hon. Members will forgive the layperson’s way of saying it—the powdered steel, which we know will enormously increase the value of what we make there. That is something like £30,000 to £40,000 a tonne initially. It is critically important that we get the right buyer for Tata Speciality Steels: a buyer who is in it for the long term and prepared to make the investment.
Recent reports about the apparent boardroom manoeuvrings at Tata are a little worrying, to say the least. Given the current instability at the global board-level at Tata, I ask the Minister what the Government are doing to ensure that the sale of Tata Speciality Steels in South Yorkshire is not compromised by the uncertainties apparent at boardroom level at Tata HQ. What communication is he having with Tata at the highest level? I do not expect the detail, or for commercial sensitivity to be compromised, but can he tell us what discussions are taking place to make sure that the sale of Speciality Steels is given the priority by Tata that it deserves?
Yesterday, during Prime Minister’s Question Time, I raised the Prime Minister’s visit to India next week. I did not really get the clear answer I was looking for, but can I now ask the Minister to commit to ensuring that the delegation led by the Prime Minister that is going out to India next week takes the opportunity to raise with Tata the business of ensuring a sustainable future for Speciality Steels and, indeed, the other Tata holdings at Port Talbot and elsewhere? In other words, what are the Government doing to support Speciality Steels, Port Talbot and the other Tata holdings in the forthcoming period?
If we are to have a successful steel industry, we need demand for steel produced both for home markets and abroad. Recently we have heard some pretty bad news about the demand for UK content even in British infrastructure projects. We all know about the recent decision to award the contract to supply the steel for the pressure hulls of the new successor Trident submarines to a French company, despite the fact that we have the capacity here in the UK and two UK firms submitted a joint bid for the work. There are other upcoming projects that could, with a bit of support and leverage from the Government, absolutely maximise the use of UK steel.
Tom Blenkinsop
On the Ministry of Defence contract, which occurred two years ago, when two British firms—or two UK sites—came forward with ideas for the plate steel for the hulls on the successor programme, they were actively told to go away by the MOD, as it had already procured the contract from a French site. The two British sites involved, which wanted to come together and provide a solution, just wanted a bit of time—given the time that has subsequently passed, those two sites could have provided the steel. That was another missed opportunity in a period when we were still members of the EU, and defence contracts are exempted from competition regulations.
Angela Smith
I completely agree with my hon. Friend. His point relates entirely to the situation with shale gas. My hon. Friend made an impassioned case for the shale gas industry earlier this afternoon, and I entirely support him in that. I support the signing of the memorandum of understanding by Community and by the GMB. We all know that the domestic supply of shale gas will help not only the steel industry, but a range of industries in the UK, because it will provide valuable feedstock for the chemicals industry, for example.
Are the Government continuing to support the development of the relevant steelmaking capacity to ensure, for instance, that UK steel will be used in developing the new industry? There have been difficulties in ensuring that the UK steel market can provide that capacity, but we know that work is ongoing, in partnership with the oil and gas industry, to get over those obstacles and make it possible for the UK steelmaking capacity to deliver the steel that the shale gas industry needs. That relates entirely to the point my hon. Friend made: will we ensure this time that we do not miss an opportunity to expand the UK steel industry and exploit new opportunities that become available, such as shale gas?
The same can be said of the Swansea bay tidal lagoon. Is the Minister providing input on the process to the so-called Hendry review? That is critically important. There are huge advantages for the UK steel industry from that project, if it goes ahead.
Stephen Kinnock (Aberavon) (Lab)
My hon. Friend is giving a passionate speech, as always. It is also important to note that the Swansea bay tidal lagoon is just the first in a number of projects. The economies of scale coming out of that could deliver lagoons in various places around the country—far larger, in fact, than at Swansea bay—so the potential for steel and steelmaking from lagoon projects is enormous.
Angela Smith
I completely agree. Potentially, this is an exciting new industry for the UK that would provide reliable baseload energy to meet the nation’s needs. The steel necessary for building those tidal energy projects will come not just from south Wales, but from Firth Rixson and Forgemasters in Sheffield. It will involve some of the best and most technologically sophisticated steelmaking available in the UK. Is the Minister absolutely committed to ensuring that the voice of the steel industry is heard at the heart of Government in looking at whether we give the project the go-ahead? Can we look forward to hearing something specific about that in the autumn statement?
Hannah Bardell (Livingston) (SNP)
The hon. Lady’s point about tidal and wind energy is absolutely key. Does she agree that the Government’s lack of support and their pulling of support, particularly in the wind energy sector, will have a knock-on impact? That is a serious opportunity for steel production missed by the Government.
Angela Smith
A number of opportunities have been missed over the years, and wind energy is one of them. The turbine-making capacity is not now available here in the UK. Wherever possible, it would be good to see the Government attempting to work with industry to put those mistakes right and see what we can do to develop that capacity in future.
Unlocking all that potential will mean an active industrial policy from the Government. Will the Minister therefore reassure the House that UK steel will be at the heart of the forthcoming industrial strategy? As was mentioned earlier, will he give an absolute commitment that steel—which, let us remember, is a foundation industry—is an ongoing priority as we await the publication of the strategy and that it will be at the heart of everything that the new Department does between now and next spring, when the strategy is introduced?
In an industry where investment is vital and timescales are long, certainty is important, so my concluding remarks are of course about Brexit. It is my firm view that, as an industry, steel needs full access to the single market. That is vital, especially when one considers that 50% of all the industry’s exports go to the European Union. Given that the automotive industry has secured a guarantee from the Government, as we leave the European Union, to allow the necessary investment and ensure that it continues in Sunderland—I absolutely welcome that, by the way; it is great news for Sunderland and really important for the UK economy—will the Minister tell us whether we can expect the same sort of guarantee for the steel industry? It is critical that the steel industry should be able to continue to enjoy access to its key markets. Let us remember that many thousands of jobs depend on a successful steel sector.
Steel is vital to a country that wants to continue to be a manufacturer. We need the Government to be fully engaged in helping the industry not just to survive but to develop and to provide security against the uncertainties of the global economy. The future is not going to be easy and although Brexit is frequently posited as bringing many opportunities—these nebulous opportunities that have yet to materialise—we can be absolutely certain that it will deliver more than its fair share of challenges. The steel sector will need the Government to be an active partner to help it to deal with the uncertainties it faces.
What happens to the steel industry if, when we Brexit in two years’ time—presumably in April 2019—the Government have not negotiated a long-term deal? What happens if they have not even be able to negotiate a transitional deal with the European Union? What happens to the steel industry if we end up falling back on World Trade Organisation rules? The Government need to be clear and to work closely with the steel industry and Parliament to ensure that those uncertainties are minimised and thought through, and that we are absolutely certain that, in the worst-case scenario, the Government will be there with a plan to support the steel industry as it moves forward—indeed, to support all manufacturing industry. That question is critical and is worrying the business sector to a degree that I have never seen before in my lifetime in politics.
A country without a steel industry cannot class itself as a major economy. The stakes are that high, and I implore the Minister and the Government to do everything necessary to make sure we secure a thriving steel industry for the future, preferably with the UK as a full member of the single market. Whatever happens, we need to ensure that the Government, who had no plans for Brexit, certainly have a plan if the worst materialises in two years’ time.
Geraint Davies (in the Chair)
Moving from a big “L” to a big “C”—or should I say a deep “C”?—I call Mr Peter Bone.
Mr Peter Bone (Wellingborough) (Con)
It is a great pleasure to follow the hon. Member for Penistone and Stocksbridge (Angela Smith), whose speech was very good—for at least the first two thirds. It was a very good speech and she made a strong case for the special steel produced in her constituency. I also liked the plug at PMQs for the Prime Minister to do her best when she goes to India. Years ago, I was on the Select Committee on Trade and Industry and I remember a huge business tycoon from India. I asked him, “What is the one thing we could do to boost trade between our two countries?” He said, “Pull out of the EU.” At that time, of course, nobody ever thought that would happen, but now he will get his wish. Absolutely, too, on shale gas, that makes obvious sense.
I also congratulate the hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop). I always think that Westminster Hall is where we have the best debates. We do not get the party-politics nonsense that we sometimes have in the main Chamber. The way in which he made his speech will allow the Minister to deal with it in a very grown-up fashion. It was also particularly courageous to make the points he did against his party’s current policy in some regard. I will return that, I hope, and say some of the things that I think have gone slightly wrong in the debate on steel.
My interest is also connected with that of my right hon. Friend—sorry, my hon. Friend the Member for Corby (Tom Pursglove); he should be right honourable. My constituency abuts his, and a lot of my constituents work in and supply goods and services to the Corby area. I suppose I should also declare that I spent 13 years in south Wales and regularly played cricket close to the steelworks—off my bowling, the ball quite often landed in the steelworks.
As all hon. Members here will probably say, British steel has a future. Not only that; it has to have a future. It is a strategic industry. There have been two Governments recently—the one under David Cameron, and the new Government, under the new Prime Minister—and there has clearly been a shift in emphasis. What I would criticise about the previous Government is the slowness with which they did things. Very early on, when there was clearly a lot of working together and establishing things that needed to be done, such as reforming business rates and dealing with energy costs, the previous Government said, “Let’s deal with Chinese dumping.” But we did not seem to be getting there as quickly as we should have. With the new Government, things have moved on a lot.
Let me deal with the thing about free trade, the Chinese and dumping. Yes, a lot of us believe in free trade because we think it benefits everyone, but free trade does not mean that one country can dump its products in another country. Countries cannot sell their products below cost or with huge subsidies. The reason it is done, of course, is that with things such as steel, there are large fixed assets. The marginal cost of producing the steel and selling it at a loss allows those fixed assets to be kept. That is exactly what the Chinese are doing, which is why we should impose severe tariffs—not for protectionism, but because they are dumping. As any free trader will say, dumping is absolutely not allowed. I listened to the arguments about how dumping would work or did not work in the EU. I think my views on the EU are pretty clear, but we are where we are now and we must look at the advantages.
Let us look at the single market argument. I have only been in Parliament for 11 years. Before that, I was in the manufacturing business. Of course, exporters want to have something that other people want, and they want to be able to sell it. If a tariff exists, and the exporter pays the tariff and sells the product, that is fine, but it is better not to have the tariff in the first place. The exporter wants free trade access to their customers, which is not the same as a single market. If we did not have that, and there were world trade rules, exporters would pay a tariff. But let us look at what has happened since we have come out—since the referendum.
Mr Bone
No, unfortunately we have not.
Since the referendum, sterling has fallen by, say, 17%. That makes exports to the EU 17% cheaper and exports into the UK from around the world 17% more expensive. Therefore, a small tariff is irrelevant because we have already had a huge dividend from Brexit. There has been a lot of confused talk around the subject. I absolutely agree with putting tariffs on China—and other countries, if they are dumping—but I do not agree with the idea that somehow there will be a huge problem if we have world trade rules because 50% of exports go to the EU. Clearly we have benefited enormously from the devaluation of sterling. I know that a lot of people want to speak today, but we must look at two issues: the benefit of sterling and the fact that we can absolutely believe in free trade while absolutely having tariffs on dumped goods. That is rather important.
Finally—I really do appreciate that there is a time pressure—I agree entirely with having British steel for British goods. Rushden Lakes is a large development in my constituency, and all the steel there is British. Today, the Government announced a new prison for Wellingborough—I apologise that I must leave the debate temporarily to deal with a matter to do with that prison —which is an opportunity to use British steel. There is a great opportunity for us in the future. The work of the all-party parliamentary group and other hon. Members here today has kept British steel on the agenda. I think the new Government have listened, and I am really very positive about the future of steel.
Geraint Davies (in the Chair)
Thank you very much, Mr Bone; I hope you are not going to prison for too long. [Laughter.] I will not pronounce Jonathan Edwards the big “P”, but I call him to speak. If hon. Members can limit their remarks to 10 minutes each, we will get everyone in.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
It is a pleasure to serve under your chairmanship, Mr Davies. I will endeavour to follow your instruction.
I congratulate the hon. Members for Middlesbrough South and East Cleveland (Tom Blenkinsop) and for Redcar (Anna Turley) on securing the debate. I commend the hon. Gentleman on his opening remarks, in which he showed a deep understanding of the industry. It was a genuine pleasure to listen to him. I thank the Backbench Business Committee for allocating time for this important debate.
I speak on behalf of the steel industry in Wales, which is arguably the most important component of the Welsh economy. Tata Steel Port Talbot employs about 4,000 people directly, and its supply chain is reported to sustain 20,000 jobs in Wales and to contribute £3.2 billion per annum to the economy of my country. We talk about things having national economic strategic importance, and steelmaking in Port Talbot is one of the most important components in a Welsh context.
It is almost impossible to talk about anything these days without mentioning Brexit, so I will get this point out of the way right at the start. Recent revelations about the back-room deal that the UK Government cut with Nissan highlights the Tories’ strategy to pick winners when it comes to Brexit. I will of course back any incentives that support important industries such as the automotive sector, both in their own right and as customers of the steel industry, but as other hon. Members have said, guarantees of that nature must also be extended to the steel industry, which is the backbone of the Welsh economy. My answer to the Government’s Brexit conundrum when it comes to steel is to stay in the single market and the customs union.
It is fair to say that that last time we had a debate of this nature, the mood was dark and there were genuine fears about the future of steelmaking in Wales and the UK. The reasons behind the pressures on the industry are well documented and have been restated today. Instead of repeating them, I will highlight some points made in an excellent report by Swansea University that was published in September. The report, “The sun has risen over steel town: Developing a sustainable steel industry in the UK”, was written by some of the most eminent steel experts in the UK: Professor Sridhar Seetharaman, Professor Dave Worsley, Dr Cameron Pleydell-Pearce and Mr Brian Edy. I commend them for their work.
The report puts forward a very positive prognosis for the steel industry, if supported with swift strategic Government action. The Tata Steel strip business in Port Talbot is today making a profit, performing above the ambitious levels targeted in the local transformation plan put forward at the height of the crisis last year—a plan that had been rejected as over-ambitious by the Tata board in Mumbai. That is quite an incredible achievement. However, in a session held a few weeks ago by the Economy, Infrastructure and Skills Committee of the National Assembly for Wales, evidence from steel producers and manufacturers indicated that order books, although buoyant at present, could take a turn for the worse in the second quarter of next year, demonstrating once again the huge volatility of the industry and that the next crisis could come sooner than anyone would hope. In other words, this is no time for Governments in London and Cardiff to take their eye off the ball. Therefore, the issues surrounding high electricity prices, whereby domestic steelmakers face a £17 per megawatt disadvantage compared with competitors in Germany, continue to be ones that should be urgently addressed.
The UK and Welsh Governments need to look at business rates and at what can be done to remove plant and machinery investments from rateable calculations. We need firmer protocols on procurement. As the Swansea University report highlights, only 40% of domestic demand is supplied by domestic producers. I point the finger at the Welsh Government as well in that regard. The report also highlights that a main consideration for the profitability of plants such as Port Talbot are prices of raw materials and sales prices. In 2014-15 the global weighted sales price fell by 26% due to much-documented Chinese dumping; at the same time the price of iron ore fell by 60%, which is hugely significant given that Port Talbot’s annual spend on raw materials is $1 billion.
A core aim in creating a sustainable industry, therefore, is to build resilience to fluctuations. The report clearly states that it would be logical to use a period in which conditions are favourable, like now, to make the necessary technological innovations needed to make the sector more resilient. The report makes the case that Port Talbot could evolve into a leading-edge, zero-carbon steelmaker with carbon-positive products that utilise locally generated by-products as a chemical and raw materials feedstock. It also argues that Port Talbot would have a viable future once in the hands of an owner with a long-term vision that will commit to and invest in transformational change.
Tata’s ability to deliver that much needed transformational change has arguably been hindered by its decision to vastly reduce research and development investment in its UK plants and to centralise activity at IJmuiden in Holland. That brings me to the current state of play in Port Talbot, where Tata is in advanced discussions with ThyssenKrupp about a merger of their European operations. If the Minister takes one thing from today, let him be in no doubt that the proposed merger is a real threat to the future of Port Talbot. As the Swansea University report states:
“TKS believe that capacity reduction is necessary in Europe, and Port Talbot could become a convenient sacrifice for them.”
Those are not new concerns and have previously been expressed by others and by me in this place. Unite the union made the point strongly in evidence to the National Assembly only a few weeks ago.
My constituency colleague in the National Assembly and predecessor in this place, Adam Price AM, has argued on behalf of my party that the UK Government should intervene if the proposed merger goes ahead unless there are specific guarantees about the long-term future of Port Talbot. His reasoning is perfectly valid when considering the record of ThyssenKrupp. In August 2016 Reuters reported that Andreas Goss, chief executive of ThyssenKrupp Steel Europe, had announced a new aggressive cost-cutting plan for its operations based on plant closures. It is worrying that the voice of the UK Government in Wales, the Secretary of State for Wales, is on record as saying that the proposed merger is “encouraging”.
My last point is that there is an alternative option on the table that seems to be far more encouraging in terms of achieving the long-term sustainable future we all desire. The recent news that two former rivals, Excalibur Steel and Liberty Steel, have joined forces is welcome. Significantly, the bid has Welsh Government support. This rival bid would lead to the creation of a new domestic company, probably the largest Welsh company in terms of turnover.
Liberty, of course, made its name in taking over steel operations in the UK and converting them by installing furnaces capable of recycling scrap steel. The process obviously helps to remove fluctuations from the business model, helping to create a more sustainable business. The Swansea University report indicates that 60% of steel in the United States is now produced from scrap steel by re-melting it in electric arc furnaces. The Excalibur-Liberty deal therefore offers the exciting prospect of green steel and primary steel being produced side by side, thereby helping to meet the transformative challenge set by the Swansea University report.
Tom Blenkinsop
Every option has to be considered in terms of Port Talbot’s future. I remember talking in a debate about whether Tata was going to retain Port Talbot, as we foresaw that changes in prices of strip and the potential profit from Port Talbot. I reiterate that Liberty is a good company that has come in, but without the production of primary virgin steel, there is no scrap steel to recycle. My concerns are about any mill rolling slab or rebar, where that steel is coming from. That goes back to the questions about Chinese imports. We need guarantees on the primary source of slab, rebar and billet.
Jonathan Edwards
I am grateful for the hon. Gentleman’s intervention. I was endeavouring to make the point that the Liberty-Excalibur deal potentially offers a future in which green steel, as it is called, and primary steel are produced side by side in the two blast furnaces at Port Talbot. Keeping those two blast furnaces open is vital for the viability of Port Talbot. He is completely correct.
I have a simple message for the Minister: this could be a huge success story for Wales and the UK as a whole. My last ask today is for him to agree at least to meet the leaders of the Excalibur-Liberty deal to see whether there is an option for the UK Government and the Welsh Government to put their weight behind a bid that seems to have unanimous support in Wales. Diolch yn fawr iawn.
Geraint Davies (in the Chair)
I call Anna Turley. We have all been waiting for her speech.
Anna Turley (Redcar) (Lab/Co-op)
It is a pleasure, as always, to serve under your chairmanship, Mr Davies. I welcome the new Minister to his place and thank him for the accessible way in which he has already met me to discuss the former Sahaviriya Steel Industries site and the future for Teesside. I also welcome the shadow Minister to her place. She represents a steel town, and we think of her husband with great fondness—he was in this place for far too short a time, but he fought hard for the steel industry in his time here.
It will be no surprise to Members here or those watching at home that I find it painful to speak in another debate on steel and to have to continue fighting for an industry that, although fundamental to the British economy, was ripped out of my constituency last year like a heart from a body. The people of Teesside remain angry and disillusioned, and rightly so. They are the ones battling to deal with the aftermath of the Government’s failure to protect Teesside’s steel industry last year. Many are still seeking work, many have had pay and conditions slashed in new jobs, many have had to move away from their home and some may never work again, but they are all resolute, determined, made of steel. They are trying to look forward, so I owe it to them to try to look forward in this debate and to keep working for the industrial and manufacturing future not only of Redcar and Teesside but of our country.
Before I do that, l also owe it to them to raise again questions to which we have never had answers and injustices that have never been acknowledged. Why were the Government not willing to take a stake in SSI or to lend it the requested £100 million to restructure and save the plant, yet willing to take a 25% stake in Tata to save Port Talbot earlier this year at the time of the Welsh elections? Why would the Government not step in to mothball the blast furnace to allow it to be relit when market conditions picked up, as they already have? Why were offers from local companies to produce foundry coke, which could have kept the ovens alive and paid for a mothballing, never accepted?
I ask all that now not just to look back. If the Minister wants to tell us to move on and get over it, I am afraid that we cannot. I look about me now at the economic picture for the global steel market and the conditions in the UK and I could weep. The SSI Redcar plant was the one with the greatest export activity in the country, so the current drop in the pound had the greatest potential to boost our exports. It may have been able to turn around the picture at the most efficient site in the country, which before Christmas 2014 was in the black.
Industry experts tell me the value of SSI’s exports to our balance of trade could now have been £1 billion, with those exports principally heading to the far east—in other words, outside the EU. I see that international expectation in the industry is that the price of steel will continue to increase. I see a new runway being commissioned for Heathrow that needs 370,000 tonnes of steel—the same as building 16 Wembley stadiums—and a company there that wants to buy British. I see cutting-edge new developments in steel in this country—two thirds of UK steel products were not even invented 15 years ago.
SSI lacked the reserves to keep the plant alive through the crisis. If only it had been supported, it would now be exporting extremely successfully. Surely if we believe in an active, interventionist Government who support this country’s industry and exports, we are an example of where they should have stepped in.
Tom Blenkinsop
My hon. Friend is a fantastic champion for the Redcar site, which I know well. She commands great loyalty in the town from many people and I respect her for how she has played the grim hand that she was dealt as soon as she was elected. Does she agree that the sad irony of the SSI site—the old Teesside Cast Products site—is that it was the second most efficient plant in the European Union after Dunkirk?
Anna Turley
My hon. Friend is right. The SSI site was not only efficient but had a fantastic workforce. An enormous amount of money was put in to bring it up to such standards. The site had everything that could have seen it playing a leading role in the steel industry. It is a tragedy that the site could not be supported to weather a few months of difficulty so that it could thrive in the future.
The site now stands looking over the town, cold and rusting, with its future tied up in faraway wrangles between an official receiver and faceless banks in south-east Asia that show no signs of progressing. I would be delighted if the Minister had anything—anything at all—to share with us about what steps the Government are taking to wrestle the site out of the hands of the Thai banks, so that the people and businesses of Teesside can start to rebuild, invest, regenerate and bring much-needed jobs to our area.
I believe that the future for steel on Teesside did not disappear entirely with SSI. Potential inward investors recognise Teesside as the preferred location for UK investment, with its unique availability of infrastructure, supply chains, innovation support and skilled workforce, and its transport benefits through its geographical location and existing assets. Our British steel beam mill is doing fantastic work and has a great workforce. If the Government are concerned about the future of the UK steel industry, they need still to be concerned about Teesside. I have met serious potential investors who are looking closely at it, but we need the former SSI site to be liberated. Although I have come here to bat for the wider steel industry in this country and to fight for the jobs and livelihoods of steelworkers around the country, I do so on behalf of Teesside, with an anger that cannot be repressed and a determination to achieve some form of future for steel in our area.
I turn now to some broader issues. The June referendum result has huge implications for every part of our economy, and businesses from all sectors will be seeking favourable terms in the Brexit negotiations. Last week’s Nissan announcement was fantastic news for the automotive industry, and I congratulate every single man and woman at the plant and in the supply chain who sent out the message to the world that the north-east is the best place to come invest and build the cutting-edge cars of the future. We have a fantastic workforce, terrific businesses in the supply chain and world-beating research and development.
It is important that Brexit does not become a game of who can shout the loudest. Our approach to an industrial strategy as we leave the EU must benefit everyone. My hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) is absolutely right that steel must have the same weight as the automotive industry in the decisions made about tariffs. The steel industry is still in crisis as it continues to battle with the challenges of global overcapacity, falling demand and uncompetitive trading conditions. Some progress has been made, but further reductions in steel jobs and production capacity are a possibility if action is not taken. The uncertainty of Brexit adds to the challenges.
We fought to secure this debate to ensure that tackling the risks to the future of steel remains a Government priority. Many of the industry’s asks remain unanswered. The primary importance of the Brexit negotiations cannot mean that other issues fall by the wayside. Many industry proposals to redress the huge imbalance in electricity costs for UK steel compared with our competitors have so far not been carried forward by the Government, and the delay has cost the sector an estimated £20 million since June. The Government have also not yet accepted the request for plant and machinery to be excluded from business rate calculations, meaning that French and German steelmakers continue to pay up to 10 times less in rates than their UK counterparts. I sincerely hope that the Government are considering that ahead of the autumn statement.
I have mentioned Heathrow’s important commitment to use British steel in the recently approved airport expansion. The same support for local materials must be present in other major construction and infrastructure projects, including High Speed 2 and 3, the new fleet of nuclear submarines and Hinkley Point. More than two thirds of UK steel exports went to the European Union in 2015. It is crucial that freedom to trade in the single market is maintained.
Steel is also a crucial foundation industry, underpinning the manufacturing sector as a whole, which itself relies on single market access for both the export of completed goods and the import of parts and raw materials. The assurances given to Nissan were positive for the steel industry, particularly as they are the biggest automotive customer of UK steel. However, the automotive sector has a large supply chain, and those companies need the same assurances that they will not be hit by tariffs when we have left the EU. It cannot be the case that the biggest companies who shout the loudest secure special protection.
On Teesside, every single one of our boroughs voted by more than 60% for Brexit. I spoke to lots of people during the referendum campaign who were motivated to vote leave by anger at the loss of our steelworks and the idea, wrongly pushed by the leave campaign, that inaction in Europe was to blame. They want the Government to be more active in their support for industry and to challenge unfair trading practices by China. When forming post-Brexit trade policies, the UK must implement robust anti-dumping measures to stop the flood of subsidised steel that has devastated the industry in the UK, not push the hands-off attitude suggested by one leading Brexit Minister, as my hon. Friend the Member for Middlesbrough South and East Cleveland exposed.
I also want to mention the importance of innovation to the future of the UK steel industry. Innovation is core to our domestic industry’s success. Such is the impact of British inventiveness that two thirds of steel produced here is in forms not invented 20 years ago. That is why I was appalled to learn earlier this year that officials at Innovate UK judged support for materials and metals not to be a priority for Britain. The implications of Tata’s announcement in March revealed the short-sightedness of that approach, so it is reassuring that the Government have overruled that decision. I would love it if the Minister agreed in this debate to the overwhelming evidence for a materials and metals catapult.
If we are to retain our lead, public support needs to reflect the research requirements of Britain’s increasingly fragmented industry and the principles of relentless continuous innovation by making long-term commitments advocated by UK steel experts, rather than Whitehall. I recommend to the Minister the work of the Materials Processing Institute in my constituency, which was established in 1944 to provide research to a then-fragmented industry similar to the one emerging again now.
The institute is Europe’s go-to steel and materials research expert, as my hon. Friend said, welcoming delegations from Germany, Sweden, China and elsewhere this summer to advise them on how to future-proof their domestic steel industries, which are wrestling with many of the same issues as ours. Just this week, the institute was approached by one of the world’s largest steel companies overseas to become its preferred research partner. Its proposals for long-term support to commercialise innovation have the support of Tata Steels Speciality Steels, British Steel, Celsa Steel, Liberty Steel, Albion Steel, Acenta Steel, the British Stainless Steel Association and UK Steel. I would be delighted to welcome the Minister to discuss the matter further and see the institute’s world-class facilities for himself.
Bridging all these issues is the need for a long-term industrial strategy that supports British industry and manufacturing to be competitive in the global market by creating an environment for investment, innovation and, ultimately, the creation of more highly skilled and well paid jobs. The assurances given to Nissan and the proposal for a 25% Government stake in Tata UK steel assets are two examples of a more interventionist Government prepared to support British industry, which is good to see. It is a marked improvement on their complacency and inaction during the SSI crisis in Redcar; this must be the start of a more proactive approach to industry. UK steel is still in crisis, but with the right help, its future both nationally and on Teesside can be secured.
Geraint Davies (in the Chair)
Diolch yn fawr. Nawr te, siaradwch, Stephen Kinnock.
Stephen Kinnock (Aberavon) (Lab)
Diolch yn fawr, Mr Davies. It is a pleasure to serve under your chairmanship. I thank my hon. Friends the Members for Redcar (Anna Turley) and for Middlesbrough South and East Cleveland (Tom Blenkinsop) for securing this debate, and for their contributions. I welcome the Minister and shadow Minister to their places.
A year on from the closure of Redcar, our steel industry is still in crisis. Make no mistake: we are still staring into the abyss. My constituency is built around the town of Port Talbot, which is living under a cloud. We are a steel town. The steelworks is the blazing heart of our economy, our community and our lives, and we do not know whether it has a long-term future. Our steel industry and the communities built around it face a perfect storm: a long-term declining British manufacturing base; an economy facing fundamental challenges, particularly in light of the referendum; and a Government who are quick with excuses but glacial when it comes to solutions or strategy.
That perfect storm comes together to create an uncertainty with a real, lived effect. It is not only hitting the order book—running down the short-term prospects of our industry, without which there can be no long term—but affecting people’s lives. I have constituents who cannot get mortgages or loans, because there is no guarantee that they will have a job in six months; constituents who do not know whether they will be able to help their kids through university or college; constituents who, simply put, do not know whether they and our town of Port Talbot have a future.
That existential uncertainty has been dragging on for a year. Just three months after Redcar closed, we learned of 1,000 steel job losses across Wales, 750 of them in Port Talbot. The men and women of Port Talbot, Llanwern and the rest of Tata in Wales were left in limbo for more than two months, unsure whether theirs would be the jobs that went. Then, about a month later, came the potentially devastating news that Tata wanted to sell. From a fire sale we got the slow burn, which somehow morphed into the joint venture in July. Today we are no clearer.
We are told that the joint venture is still the option, but what that means is not clear. What does it mean for primary steelmaking, investment and jobs? Is Tata’s British arm even part of the joint venture plans? Apparently not, unless there is a resolution on pensions. But any further delay has a real impact, because there are very practical decisions that have to be made now if the industry is to continue, such as relining the second blast furnace at Port Talbot, without which there is no sustainable future for primary steelmaking in this country.
The Government, along with both companies, must set out clearly what the joint venture really means and must give us the cast-iron guarantees that Roy Rickhuss of the union Community called for just this week on jobs, investment and the long-term future of Port Talbot and the rest of the business. Although we do not know the reality, our fear is that this joint venture is little more than a smokescreen for cutting Tata Steel UK loose to consolidate the business on the continent. ThyssenKrupp has never shown much real or active interest in Tata’s UK operations; we know that the joint venture is right at the bottom of its priority list, beneath its internal restructuring, domestic jobs guarantee and ongoing negotiations with the German union IG Metall. When that is added to Tata’s complex internal dynamics, which we saw in the changes in Mumbai, the result is a sword of Damocles, forged by an inept Government with dumped Chinese steel, hanging over the heads of people in Port Talbot.
[Mr Clive Betts in the Chair]
The situation is even more precarious given the vote to leave the European Union. Brexit poses real challenges for our industry. More than half of our exports go to the continent, so it is essential that the Government act to protect the steel industry throughout the Brexit process and negotiations. First, they must ensure continued access to the single market and continued membership of the customs union. Those matter because they will allow us to avoid tariffs that would devastate the industry and because they strengthen our hand in fighting Chinese dumping. The Minister should confirm today that his Government will strain every sinew to ensure unfettered tariff-free single market access for British steel and the tariff protections that come from standing with a market of half a billion consumers. Secondly, they must act to protect the steel supply chain. Around half the steel used by UK carmakers comes from Tata and Port Talbot; the automotive and steel industries are inextricably bound together, and each needs the other to stay in the UK in order to be successful. Last week’s news about Nissan was welcome, but the Government must commit to offering the same terms to other automotive producers such as GM, Toyota, Ford and JLR to ensure that they remain in Britain.
Those are just two of the actions that the Government must take to ensure the future of the steel industry. However, it is the Government themselves who are the greatest cause of uncertainty for our communities. For years, we have seen an approach characterised by indifference and incompetence, and now we can throw in complacency. The Government act as if the weakness of the pound is a knight in shining armour, riding to the rescue of the steel industry, but it is really a Trojan horse attacking our industry from within. In the short term, the 15% drop in the value of the pound has helped UK steel exports, but come the new year the penny will soon drop. The cost of the raw materials that we have to import—coke, coal, iron ore—and of energy will shoot up. Those costs will have a huge impact on the bottom line, as they already do for those who process scrap, who buy month to month or week to week. As Bimlendra Jha put it two weeks ago,
“you can’t make a business profitable on currency, we have to make it profitable on a structural basis.”
The reality is that the industry does not see the structural problems being fixed, because we have a Government who can talk a good game but who are sitting on their hands. It is straightforward to change that, but the Government must take concrete action in a number of areas. First, will they guarantee that the co-investment and soft loans offered last April still stand? Secondly, 12 months on from Redcar, will they finally make progress on the five asks? Thirdly, will they protect the steel industry from further Chinese dumping by voting against market economy status for China? This month, the European Commission will decide its position on this question, ahead of the December vote at the World Trade Organisation. Let us be clear: a China with market economy status is a China that can and will keep dumping with impunity. Will the Minister let us know how the UK Commissioner will be mandated on MES? Will the Commissioner vote in accordance with the European Parliament and the clear will of this House?
The autumn statement gives the Government other opportunities to give steel a fighting chance by removing plant and machinery from the calculation of business rates in a way that also compensates local authorities and, crucially, by acting on energy prices. I have no doubt that the Minister will point to the compensation package and talk about energy efficiency. That is fine, but it should be the icing on the cake. We need the actual cake first. Our prices are £17 per megawatt-hour higher than Germany’s. That is 40% to 45% more expensive, and it is killing the competitiveness of our industry. We cannot save 45% through energy efficiency alone.
The Government are motivated by tactics, not strategy. They are more interested in producing a political fig leaf to keep us quiet than in solving the problem—but we will not be silent, the industry and the workforce will not be silent and our communities will not be silent. We know that our futures depend on solving this problem and we know that the Government can and must do better.
To quote Bimlendra Jha again,
“while there has been a turnaround…we are still not out of the woods.”
Mr Jha also said that
“whether you drown one foot under the water or 10 foot, you still drown.”
That is why we need a proper industrial strategy for the steel industry. The Government’s future capabilities assessment is a welcome baby step towards that, but it is no industrial strategy. However, the Government will have some help from us with that, because next month the all-party group on steel and metal related industries will produce our industrial strategy document. Our document will show how an active and engaged Government, motivated by strategic and economic rather than tactical and political thinking, can build the environment for our industry to thrive, creating a level playing field on cost and trade, connecting up supply and demand, building enforceable procurement rules and forging a new model of partnership for growth and progress.
Just as iron needs oxygen in order to be transformed into steel, our industry needs a strategic and engaged state, working in partnership with the industry, unions and workforce. The future of steelmaking in the United Kingdom is hanging in the balance. The future of the thousands of steel workers and their families and communities in Aberavon and throughout the country is hanging by a thread. We can overcome the uncertainty and build a bright and secure future, but only if we act—and we must act now.
Mr Iain Wright (Hartlepool) (Lab)
May I say what a pleasure it is to serve under your chairmanship, Mr Betts? I pay tribute to and express my admiration for my hon. Friends the Members for Middlesbrough South and East Cleveland (Tom Blenkinsop) and for Redcar (Anna Turley), who have made moving, passionate and eloquent speeches that demonstrated their experience. They are huge champions of the steel industry and I am very proud to call them my friends.
We have discussed steel many times in the past few months, but many of the issues—the threat to domestic producers as a result of global overcapacity, subsequent steel price reductions and Chinese dumping—remain. We have also heard about how business rates, energy costs and procurement requirements undermine the competitiveness of the sector. The uncertainty about the ownership of much of the British steel industry and the increasing fragmentation of the sector remain important issues, not to mention the impact of Brexit and the lack of clarity about what our trading relationship with the rest of the European Union will be. However, my speech today will focus on how the steel industry can have a sustainable and prosperous future in the long term. I am not downgrading, by any stretch of the imagination, the importance of the short term or how the industry remains in crisis mode, but we need to think about how steel needs to make an important and growing contribution to our manufacturing sector in the decades to come.
Several hon. Members have mentioned changes in the Tata group. The sacking of Cyrus Mistry as chairman in the past ten days obviously raises greater uncertainty, which is never a positive for business, but it could lead to a change in strategy that could boost and safeguard Tata Steel’s operations in the UK. Last week, the Financial Times reported
“a person with direct knowledge of Tata’s plans”
as
“saying that…Port Talbot…was ‘virtually safe’ following Mr Mistry’s ousting, and that the company would invest ‘whatever it takes to make it efficient’.”
Those words are very welcome, but where do they leave the steel industry or Tata Steel’s footprint in our country? What about other parts of Tata Steel, such as the speciality products and the pipe mills in Hartlepool?
I am not expecting the Minister to provide a running commentary—a fashionable phrase at the moment—on the changes at the top, but does he accept that since putting the assets up for sale earlier this year, important parts of our steel industry remain in a state of limbo? That is bound to have an adverse effect on the recruitment and retention of skilled workers, whose skills are essential to the ongoing competitiveness of our steel industry. It will also have an impact on suppliers and customers of steel products, who may be concerned about getting paid and having the orders delivered.
With this additional uncertainty on top of global pressures, will the Minister—who I very much welcome to his place—take this opportunity to set out the discussions he has had with Tata, and can he say whether further reassurances and commitments about ongoing operations have been made?
Tom Blenkinsop
In addition to the removal of Cyrus Mistry and the return of Ratan Tata to the board, there is the issue of ThyssenKrupp’s sale of assets in Brazil. Its removal from the South American economy is happening at the same time as Tata’s change at the top. Will that have any effect and will the Government investigate that in conversations during the trade visit to India by the Prime Minister next week?
Mr Wright
My hon. Friend makes an important point. He has also mentioned the importance of a proper industrial strategy. Everybody who has contributed to this afternoon’s debate has mentioned that, so what are the Government doing to put in place a proper industrial strategy—this is very important to us on the Select Committee on Business, Energy and Industrial Strategy—and how does the steel industry fit in with such a strategy? How will the Minister’s departmental responsibilities help the steel industry? Joining business, energy and industrial strategy into one Department provides a better degree of co-ordination and should help sectors such as steel by providing consistency and the co-ordination of policy, but how will that work in practice?
Just over a year ago, on 15 October 2015, a steel summit was held. Three working groups, on competitiveness and productivity, international comparisons, and public procurement, were set up to address some of the challenges facing the industry. What is the current status of those groups? Did they survive the new Government and the change in the business Department? What are the findings arising from the work and how are they being incorporated into a proper industrial strategy? The universally well respected Community union, which has the long-term interests of the steel industry at its very heart and its core, and which is not prone to hysteria or exaggerated pronouncements, recently stated:
“After an initial flurry of activity and plenty of rhetoric we are becoming increasingly frustrated at the lack of urgency demonstrated by the UK government. To date very little meaningful support has actually been delivered—certainly we have not seen the game-changing intervention our industry desperately needs.”
That is a crucial quotation from an important stakeholder in our steel industry. Where is that meaningful support? Given the policy co-ordination under one departmental roof, how will Ministers take forward action on the energy costs that undermine the competitiveness of our industry? Crucially—this has been mentioned several times —will Ministers resolve to address the concerns raised about the business rates that disincentivise manufacturers, not just steel manufacturers, from investing in more efficient plant and machinery by raising what is essentially a tax bill?
Procurement is also a major way in which a co-ordinated industrial strategy can provide meaningful support for the steel industry. We have heard already about the hulls of the Trident submarines being built with French steel. That is immensely disappointing and really does not show a joined-up, co-ordinated Whitehall approach to industrial strategy. What lessons are being learnt from this to ensure that the British industry is able to address the needs of the customer, in this case the Ministry of Defence, and that local steel content can be increased?
On commercial operations, many hon. Members have quite rightly mentioned last week’s welcome decision that Nissan is to build the new Qashqai and bring the manufacture of the X-Trail to the factory in Sunderland. That should also provide more opportunities for local British-based steel producers.
We found in our Select Committee inquiry last year that Nissan, one of the most productive car plants anywhere in Europe, used British-made steel for three quarters of the steel content needed for the Qashqai. Vauxhall buys 50% of the steel it needs for production of the Astra at its factory in Ellesmere Port from Port Talbot. Given the strength of the UK automotive industry, what active steps are the Government taking to ensure that more of that successful sector’s requirements in metals are being provided in a competitive manner by British-based firms?
The UK automotive industry currently consumes about 17% of British manufactured steel. There is surely scope for a successful and winning automotive sector to take more of a growing pie. How are the Government identifying commercial opportunities for British steel? How are they encouraging and incentivising investment in technology and innovation and in the higher quality, higher value steel required in the automotive and aerospace industries? I hope the Minister will respond directly. The Materials Processing Institute can provide the means by which technology, innovation and support can be given to producers to make sure they can move up the value chain. That is vital.
This is not only about automotives; this week is offshore wind week. Offshore wind currently generates about 5% of the UK’s electricity needs. This will double to a tenth of electricity generation in five years. Firms in my constituency such as JDR Cables are winning great big orders in this field. The steel content for offshore wind is immense, but it is often imported from France and the Netherlands. How will we ensure that British-based and British-made steel provides steel content for the offshore wind industry? Are the Government working in the proactive and collaborative way needed in the modern industrial age to ensure that as much of the value in the offshore wind supply chain—more than £18 billion of new projects in the pipeline in the next five years—is captured by domestic content?
The steel industry remains a vital and essential part of our manufacturing base. It cannot and must not be viewed by anybody as a sunset industry. I hope we will see the implementation of a proper industrial strategy to ensure that the opportunities arising in the next few years are captured as much as possible by our British steel industry and that the barriers preventing a proper level playing field are addressed and resolved. That is possible only through active work by the Government, in close collaboration with the industry. With the greatest of respect, that work seems to have gone off the boil in recent months, at a time when we need it more than ever to sustain the long-term viability and prosperity of the British-based steel industry. I hope the Minister will use the opportunity today to state that the Government recognise the importance of the steel industry and will act accordingly, not only to save steel but to make sure it has a proper and fitting future in our manufacturing sector.
Nic Dakin (Scunthorpe) (Lab)
It is a pleasure to serve under your chairmanship, Mr Betts. I am delighted to follow the Chair of the Business, Energy and Industrial Strategy Committee, my hon. Friend the Member for Hartlepool (Mr Wright), who put forward such a comprehensive case, after so many excellent contributions already to this debate. I want to begin by paying tribute to everyone working in our steel industry and its supply chain. They make a massive contribution to the UK economy and to communities such as mine in Scunthorpe, where I live.
In September 2015, when I asked the then Prime Minister to call a steel summit, many on the Government Benches were sceptical of the need. By the time the summit took place in Rotherham, however, it was crystal clear even to them that the steel industry was in crisis. Now, just over a year on from the summit and the collapse of SSI on Teesside, a further 6,000 jobs have already been lost from the industry. There remains, therefore, a pressing need for Government action.
The long products business, centred on Scunthorpe, was taken over by Greybull Capital and relaunched as British Steel in June 2016. It is to the enormous credit of the workforce and management that the business is operating at a surplus. The leadership shown by Community, Unite and the other trade unions, alongside the management team, has been crucial to that success, but they would say with one voice that there is still much to do to deliver the sustainable future that everyone wants to see. I welcome the sense of greater certainty for Scunthorpe expressed by the hon. Member for Corby (Tom Pursglove). This is just another chapter and we need support from the Government. We do not need the Government to assume that everything is okay now.
The Government have a crucial role in helping to deliver. They can set the climate and the context for delivering the level playing field that our steel industry needs to prosper. There is a real, palpable concern that, as my hon. Friend the Member for Hartlepool said, the Government’s eye is once again off the steel ball as it grapples with Brexit and other issues. As a result of the immense popular pressure exerted by steel unions, steelmakers and MPs for steelmaking constituencies, the Government set up several working groups on the key issues of concern after the summit in Rotherham, but there is yet to be any real traction as an outcome of that work. There is now a Department with “industrial strategy” in its name, and we have yet to see whether that is anything more than a welcome strapline. The Government now manage to talk the talk, but we still do not know whether they will walk the walk, as we want them to.
Procurement is a case in point. One of the most tangible outcomes of the Government’s work in the past year was the new procurement guidelines that ensure that social and economic factors can be taken into account in steel procurement. However, the Government appear to have fallen at the first hurdle. The Defence Secretary, a former steel Minister, was happy to cut the first steel, marking the start of the work on Trident submarines, the only problem being that it was French steel. That is not exactly the vote of confidence in UK steelmakers that we all want. When I asked the Prime Minister in one of her first outings at the Dispatch Box whether UK steel would be used in Trident’s successor submarines, she said that
“where British steel is good value, we would want it to be used.”—[Official Report, 18 July 2016; Vol. 613, c. 566.]
I tell the Prime Minister, the House, and the public that British steel is good value. It is the best value.
It has taken a lot of parliamentary questions to try to establish why UK steel was not used for the hulls. Answers suggest that there was not a viable UK bid, without giving any inkling of what “viable” might look like. It also looks as though the new procurement guidelines were not applied, although the Government say that they would be in future. I welcome the written answer in which the Minister said that, and wish him the best of luck in his role.
In October 2015, Scunthorpe’s plate mill was mothballed and facilities in Scotland were closed. Confidence about procurement lines in relation to successor submarines might have led to a different outcome. That is a reminder, as my hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) said earlier, of the need to ensure that the capacity to make the right sort of steel is available in the UK when it is required for large infrastructure projects. That demands a decent timeline of planning and certainty, which we have clearly not had in recent years. The steel sector Catapult is a potential benefit to give us extra traction in that area. I hope the Government will push forward with it and answer the questions raised by my hon. Friend the Member for Redcar (Anna Turley) in her powerful contribution.
The long-awaited announcement about Heathrow was accompanied by a clear statement from Heathrow that it intends to use UK steel in the construction of additional airport capacity. That is the sort of clear, forward-thinking decision making that is in the interests of everyone. It is leadership in action and we want more of that. That is why I welcome the Scunthorpe Telegraph campaign for High Speed 2 to be built with UK, preferably British, steel. The Scunthorpe Telegraph is adding its campaigning voice to mine and those of the Community union and others who have been making these arguments for some time. It is a very welcome move by a strong, campaigning local newspaper. HS2 is a massive public infrastructure project, forecast to require 2 million tonnes of steel, and we know that we have the expertise and the capacity to manufacture the necessary rail, long products and steel plate in British Steel, centred on Scunthorpe.
To be fair about rail procurement, we have the best example of best practice in the way that Network Rail has developed and delivered its procurement practices over the years, but that should not be an exception. It should be a template for others to learn from and aspire to. We also have the capacity to produce the steel needed for North sea wind farms being built as part of the massive Hornsea project. My area is rightly proud of the opportunity that the Humber, as the energy estuary, offers for development and jobs locally. It would be a missed opportunity if Dong were to ship in steel from elsewhere to build that crucial infrastructure. However, I fear that it may, like BAE Systems, dodge the Government’s new procurement guidelines.
When I met Dong representatives recently, I took the opportunity to remind them that it is UK taxpayers who are underwriting the generous contract for difference deal that they have been awarded. It is UK energy bill payers who will pay for the electricity that their wind farms produce. Every effort should therefore be made to ensure that UK steelmakers have the maximum opportunity to provide the steel for that massive infrastructure project. The Government’s new procurement guidelines should be followed for such projects, which benefit from huge Government support, and not only for projects that come directly from the Government. The procurement guidelines should be followed, and companies such as BAE Systems and Dong should not be able to dodge under the bar. I hope that the Minister will respond to that point.
While we consider infrastructure projects, let us not forget that if we develop shale gas extensively in the UK, we should have the procurement policies and practices to ensure that high levels of UK steel content are used. The same arguments apply as for wind and all other forms of energy. Local procurement is also important, which is why it is so positive that a large number of councils—including, to its credit, North Lincolnshire Council—have made a commitment to sustainable steel. I am delighted with the public commitment made by Scunthorpe United—the mighty Iron, currently riding high at the top of League One—to using local steel in the construction of their new football stadium. Procurement is an area in which the Government have taken steps, but they need to do better. We need not just good words on paper, but actions on the ground. The Minister is picking up the baton from a good Minister, the right hon. Member for Broxtowe (Anna Soubry), but the baton is full of words and he needs to turn them into actions.
The forthcoming autumn statement could give us support on business rates, energy costs and grants for energy efficiency. Action on all those things would be beneficial. Let us hope that the new Chancellor takes the opportunity to show his mettle, show he is an iron Chancellor, and make commitments to the steel industry in the autumn statement.
Christina Rees (Neath) (Lab/Co-op)
I congratulate my hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) and my hon. Friend the Member for Redcar (Anna Turley) on obtaining the debate. I welcome the Minister to his place, and want to compliment my hon. Friend the Member for Aberavon (Stephen Kinnock) on his great speech. His constituency is adjacent to mine, and I assure the House that he and I are working together for the people who live in our constituencies and work at Tata Steel.
To say it has been a difficult year for the steelworkers of Neath and Port Talbot would be an understatement. The challenge of competing in a global market, the absence of anti-dumping tariffs, the lifting of the lesser duty rate and Brexit all conspire to create a world of uncertainty and fear. Of the 1,050 jobs lost in the UK steel industry since the year began, 750 of them have been lost from Port Talbot. That was on top of the 400 jobs lost in 2014.
Steel and the steel industry are essential to Wales and its economy, and that is particularly the case for my constituency and the people of Neath. The notion that it does not have a future is simply unthinkable. There are 575 businesses making up the steel industry, employing 31,000 people across the UK. More than 50% of those jobs are based in Yorkshire and Humberside or in Wales. However, between 1997 and 2014, iron production in Wales fell by 3,210 kilotonnes—or by more than 50%. Steel production has fallen by 25% during the past 40 years. Nevertheless, last year was a record-breaking one for Tata Port Talbot, with the plant producing 3.2 million tonnes of steel.
Decline and uncertainty are things that our steelworkers have had to deal with for many years and, being as robust as the steel that they make, they have bounced back every time, working through it all to keep our country supplied with the finest steel in the world. However, the uncertainty has taken on a new form in the shape of Brexit. The European Union accounts for more than 40% of direct British steel sales— and more, when the exports of British manufacturers are considered. Post-Brexit tariffs on British steel or an elongated trade agreement might signal the death knell of an industry already fighting to compete on a level global playing field.
I remind Members that the forerunner of the European Union, the European Coal and Steel Community, was set up not only to cement peace but to help economic growth by pooling resources and preventing unnecessary competition. Its architects would be astonished at the current state of affairs and the UK Government’s inability to work with our European partners to prevent unnecessary competition from across the world. The latest industrial revolution taking place in China may well be the biggest of all. In 2015, the Chinese produced 804 million tonnes of steel, or 50% of the total worldwide output. The UK produced 11 million tonnes during the same year. It is a matter of not whether there will be implications for the UK steel industry as a result of Brexit but what their extent will be. If the Government do not do all they can, exports will be hit hard, output will be slashed, jobs will be lost and communities will be forsaken.
The picture painted may be bleak compared with a golden past, but I firmly believe that steel in Wales and the UK has a strong future. A future for any industry is all about adapting to change and turning threats into opportunities. The future of the steel industry is clearly about innovation, and technological innovation is in its business model. Beyond the heavy end of steel production that we all know so well, we also have organisations that innovate and produce high-tech products that are changing the way we view steel.
Neath Port Talbot is home to a company called Specific, which uses coated steel to make world-leading, innovative technologies that produce, store and release energy. At the heart of its work is Swansea University’s bay campus, which straddles the constituencies of Neath and Aberavon. Specific is hugely concerned about our leaving Europe, not only because of the essential funding it has received from the EU—without which it probably would not exist—but because of the potential loss of a market in which it could promote and sell its products. It is that sort of high-level innovation that needs to be harnessed and nurtured if we want to see a future for our steel industry.
Stephen Kinnock
My hon. Friend is making an excellent and comprehensive speech. It is important to underline the fact that the quality of the steel is possible only through primary steelmaking. It must be produced on the basis of a process that starts right up the chain with a blast furnace, not with an electric arc furnace. If we are going to take steel into the 21st century and as high up the value chain as we can, we must retain primary steelmaking in this country.
Christina Rees
I thank my hon. Friend for making that important point.
An innovative product is only one part of the story; we must also use the current crisis as an opportunity to change the way we do business so that a structure can be established to protect the steel industry for many years to come. What about a management-workforce buy-out at Tata Port Talbot, and perhaps elsewhere? It could be set up in the shape of a co-operative and take advantage of the benefits of a tripartite model of delivery that would also involve investment from the public and private sectors. There are many such examples from across Wales and the UK, including Tower Colliery, John Lewis, Welsh Water and hundreds of credit unions. Welsh Water’s slogan is “For Wales, not for profit”; we could apply the same principle to our other key industries, which for Wales means steel.
Co-operation, consensus and community are the founding principles of not only co-operatives but the Labour party. It is on those shared values that figures from across the Labour movement have led the development of organisations that have anchored communities during difficult times and helped to create a buffer against global economic shifts. Let us consider the possibility of doing the same in communities such as Neath, Port Talbot and elsewhere. I urge the Government to play their part in this endeavour.
Jessica Morden (Newport East) (Lab)
I, too, thank my hon. Friends the Members for Middlesbrough South and East Cleveland (Tom Blenkinsop) and for Redcar (Anna Turley) for securing this debate, and for their sterling efforts on behalf of the all-party group on steel and metal related industries, which is out today in some force.
Last week, the Community union, which does an absolutely fantastic job for its members, quite rightly praised steelworkers in a statement, saying:
“We believe the workforce should be commended, in the strongest terms, for continuing to deliver for Tata throughout this exceptionally difficult period and indeed restoring previously loss making parts of the business to profitability”.
I start with that quote because it is right that we always acknowledge what a difficult time this is personally for those who work in our steel industry. We must never underestimate the effect the continued uncertainty is having on steelworkers and their families. I know that from talking to those who work for Tata at Llanwern and at Newport Orb. A steelworker emailed me last week to say:
“We feel forgotten about and we have no news on the Government’s and Tata’s plan for the pension, no news on where we stand on the future on any proposed merger, no answer on the deficit etc. Things seem to have come to a standstill and there are no answers coming from Parliament or Tata”.
That very much echoes what my hon. Friend the Member for Aberavon (Stephen Kinnock) said at the start of his speech. Aberavon and Port Talbot’s fortunes are very much linked. I absolutely concur with what my hon. Friend said about that feeling of uncertainty and how difficult it is for people. Many steelworkers feel that their lives are on hold. I hope the Minister understands that and takes it away from the debate.
We have in this place relentless debates, questions and statements about steel. Just yesterday there were two fantastic questions at Prime Minister’s questions from my hon. Friends the Members for Cardiff South and Penarth (Stephen Doughty) and for Penistone and Stocksbridge (Angela Smith). In response, the Prime Minister said:
“This Government have stood up for British-made steel, and we have taken a number of measures”.—[Official Report, 2 November 2016; Vol. 616, c. 880.]
She also said,
“we recognise both the importance of steel and the importance of Tata in the United Kingdom.”—[Official Report, 2 November 2016; Vol. 616, c. 886.]
On the lack of clarity about Brexit, she said:
“I am very clear that what we want to achieve is the best possible deal”.—[Official Report, 2 November 2016; Vol. 616, c. 880.]
We appreciate those words, but we need more detail and more commitment from the Government, with stronger words and stronger action.
Workers in my constituency want to know that the Minister is fully engaging with the short-term urgency of the problems facing the Welsh steel industry. There are bits of good news, but the underlying problems have not gone away, as many other Members have said. We are still waiting for assurances from the Government about Port Talbot, which will affect Llanwern, and for any news on the joint venture between Tata’s strip products division and ThyssenKrupp, which could affect Orb in my constituency. If there is such news, what assurance can the Government give that commitments will be made on jobs, investment and the continuation of primary steelmaking at Port Talbot and across south Wales?
The Government lobbied against the EU imposing tariffs on the dumping of Chinese steel. The Prime Minister did not even put Chinese steel dumping on the agenda when she first met the Chinese Prime Minister. Electricity prices are still a huge issue in the UK, with a disparity of £1 million a week between the UK and Germany, which has an effect on competitiveness. As many Members have said, despite the procurement guidelines, French steel is still being imported for Trident renewal. I know we will all be watching as large infrastructure projects get the go-ahead. The Government cannot let up on ensuring that all major procurement projects—from rail to airports and tidal barrages, which will be important for places such as Newport if Swansea bay tidal lagoon goes ahead—use British steel.
As every one of my hon. Friends has said, the Nissan announcement is brilliant news, but where is the Brexit plan for the steel industry? So far, the Secretary of State for International Trade has said that he has no plans to support the steel industry with trade defence instruments. When combined with the other uncertainties Brexit has caused, that is a major concern. Brexit has many other implications for the industry, so we want similar assurances to those given to Nissan.
In brighter news, the Welsh Government are thankfully doing all they can with the powers and levers available. I very much welcome the active work of Ken Skates, the Welsh Government’s Cabinet Secretary for Economy and Infrastructure, who through Business Wales is supporting the industry through Welsh public sector infrastructure and construction projects.
I appreciate that it is not all gloom and—I will make this point before someone intervenes on me to make it—I also appreciate the point about primary steelmaking. Liberty Steel now employs about 1,500 people, including in the steelworks in my constituency and the two Scottish steel plate mills, one of which I know opened recently in the constituency of the hon. Member for Motherwell and Wishaw (Marion Fellows). Liberty Steel also has the SIMEC Uskmouth power plant and it is involved in the tidal lagoon initiatives, which were mentioned earlier and which are very important, not only for Swansea but, further on down the line, for places such as Newport. Liberty Steel has a long-term, sustainable strategy of steelmaking in the UK and actively invests in steel, power and the downstream industries. As we heard earlier, that is all built around a green steel vision, whereby Liberty Steel is working towards producing steel made from recycled scrap metal and powered by renewable power. That is an important addition to the traditional steelmaking industry.
Finally, I take this opportunity to invite the Minister to visit Newport East to see the site in my constituency and see at first hand the plans for Liberty.
Mr Clive Betts (in the Chair)
It is now time for the Front-Bench spokespersons; no more than 15 minutes each, so that there are a few minutes at the end of the debate for the mover of the motion to wind up.
Hannah Bardell (Livingston) (SNP)
Thank you very much for calling me to speak, Mr Betts, and I assure you that I will not keep you nearly as long as 15 minutes.
I speak today on behalf of my hon. Friend the Member for Motherwell and Wishaw (Marion Fellows), who unfortunately is unwell and so cannot be here. I represent the constituency of Livingston. While Livingston does not directly have any steel jobs, it is a traditional manufacturing constituency. Over the years while I was growing up, I saw closures of sites by companies such as Motorola and Bausch & Lomb, and the devastating impact that such closures can have on a local area, so first and foremost, I will say that my hon. Friend and I stand in solidarity with the constituencies across the UK that have been devastated by the closures of their local factories.
The quality of the debate today has been fantastic and the debate itself has been very consensual. Clearly, there will be differences of opinion on certain policy matters, but on issues such as this one we have to transcend politics and come together, to call for our vital steel industries to be protected.
Last year in Scotland, as is well known, the Tata Steel plants of Dalzell and Clydebridge faced huge uncertainty, as do many others across the UK today. The Scottish National party-led Scottish Government worked with the company, with local members of all political parties, with trade unions, with local government and with local communities, and they kept their promise of leaving no stone unturned though the work of that steel taskforce and through the work of Fergus Ewing, who was the Business Minister at the time and who has recently won an award for his work on this issue.
The steelworks of Clydebridge and Dalzell have now been bought by Liberty House and are coming back into production. They had been mothballed and I absolutely take on board the point that the hon. Member for Corby (Tom Pursglove) made about his disappointment at the lack of foresight and strategy in not supporting the mothballing of a site so that it can be brought back into production later.
For the avoidance of doubt and in case anybody wants to raise this point, as it has been raised in other debates previously, in April this year, then Prime Minister David Cameron mistakenly claimed that there was zero Scottish steel in the new Forth road bridge. That was quickly corrected by my right hon. Friend the Member for Gordon (Alex Salmond), who, as Members will know, is an assiduous pursuer of the facts, because steel from the Dalzell plate mill was used in the girders at either end of the bridge. My right hon. Friend further pointed out that the reason why there was no Scottish bidder for the main steel subcontract for the bridge was the closure of the Ravenscraig steel mill.
Tom Blenkinsop
The original contract let by the Scottish Government was with a Chinese company and a Catalonian company. The Catalonian company had to withdraw and it was actually Cleveland Bridge, in conjunction with Tata’s Dalzell plant, that stepped in to fill that gap. The original contract—as signed off by the Scottish Government—fell through and Cleveland Bridge, which is in Darlington, and the Dalzell plant stepped in to fill that gap. So Scottish steel was used—in fact, it was British steel, as it was slab from Scunthorpe.
Hannah Bardell
I will take that point on board, but the hon. Member will know that much of that steel was rolled and developed in Scotland. Nevertheless, I thank him for his clarification.
I was going on to say that one of the reasons that situation came about was the closure of the Ravenscraig steel mill by a previous Tory Government in 1992. I know that Labour Members—the predecessors of the Labour Members here today—fought hard alongside our party’s Members to save Ravenscraig. I pay tribute to all those Members who tried to save Ravenscraig.
That comment by the former Prime Minister reveals the lack of understanding about Scottish steel and indeed about steel across the UK, and the cavalier attitude with which such statements have been made about the industry. We cannot let that continue; there must be, as so many Members have said today, proper commitment from the Government.
I say that because the issues that we are discussing today are not limited to the steel industry but extend to British industry in general. Post-Brexit, the uncertainty and anxiety are greater than ever, because we have no idea what kind of deal many industries will get. We know what the car industry will get, although we do not have the detail of that deal. We do not know whether other deals will be made sector by sector, or area by area. Before the Brexit vote, we knew that the international demand for steel was falling: the OECD had said that excess global capacity was expected to widen to 645 million tonnes. Now, post-referendum, the pound is falling, so UK steel will be cheaper for foreign buyers, but as other Members have said, the cost of the imported raw materials will be higher in the long-term, which will make things very difficult.
I congratulate the hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) on securing this debate and on the passion with which he spoke. He highlighted the contrast between the approach and guarantees given to Nissan and the automotive industry with the support for the steel industry. That is ironic, given that the World Steel Association has said that on average 900 kg of steel is used per vehicle. So we will be making cars in Britain but importing the steel to make them and many parts of those cars. I hope that irony is not lost on the Government and that they take this issue very seriously.
Strong anti-dumping measures are critical. They were nearly secured with our EU partners. In our view, it is indefensible that the UK Government blocked EU attempts to regulate Chinese steel. The hon. Member for Corby spoke about the importance of the all-party group on steel and metal related industries and its collaboration with others. He made a plea to Tata for more information and said that the Government’s leadership would be key. Although he is a self-professed Brexiteer, he wants better leadership. However, given that it was the UK that blocked the EU attempts to regulate Chinese steel, I am not sure how he thinks the UK will do a better job. He was not able to answer that question earlier; perhaps the Minister will be able to answer it. We are all interested to know how the UK industry will fare if the UK ends up operating under World Trade Organisation rules, as the Secretary of State for International Trade has said. To be fair, the hon. Member for Corby was encouraging his colleagues in the Government to be proactive in their industrial strategy and said they needed to champion steel.
The hon. Member for Sheffield Hillsborough spoke passionately about the speciality skills and products produced in her constituency and the importance of the Prime Minister’s visit to India next week in ensuring the future of speciality steel—
Angela Smith
I was the Member for Sheffield Hillsborough; I now represent Penistone and Stocksbridge. The shadow Minister, my hon. Friend the Member for Sheffield, Brightside and Hillsborough (Gill Furniss), is now the MP who represents Hillsborough.
Hannah Bardell
My sincere apologies. My lack of parliamentary constituency knowledge has failed me there, so I sincerely apologise to the hon. Lady and I thank her for her intervention. I will be honest—on this occasion, Google has let me down.
The hon. Lady spoke about how a country without a steel industry could not call itself a major economy. We in Scotland are proud and glad to have secured steel and to call ourselves a major economy, but we worry for our neighbours and friends in other parts of the UK. I agreed with so much of what she said, particularly on renewables and single market access.
The hon. Member for Wellingborough (Mr Bone) gave us an insight into which team he is on; it is clear that he is backing the new “May Way” and not the old Cameron regime. He urged us to be positive about the future and mooted the merits of free trade and market access. He agreed that we should be tackling the issue of Chinese dumping as well.
The hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards)—I hope I have got that right—talked about the future of steelmaking in Wales and about his party’s desire to remain in the single market, as well as the importance of the single market and the customs union. He also highlighted the short-term upturn in the steel industry and the report from Swansea University that said there are opportunities in the long term to strengthen factories such as Port Talbot, but swift strategic action was essential. I wish him well in getting either swiftness or strategy from the Government. He also spoke about the Liberty and Excalibur deal and the importance of giving it careful consideration.
The hon. Member for Redcar (Anna Turley) spoke extremely passionately about the SSI closure—it was a highly efficient and productive plant—and the devastating impact that has had on her constituency. I congratulate her on the work she has done. I agree that it is devastating that the plant could not be mothballed. I am at pains to know why that could not have been done. I cannot understand it. I hope the Minister has more than warm words for her and her constituents.
The hon. Lady’s colleague the hon. Member for Aberavon (Stephen Kinnock) spoke about the tragedy of Port Talbot and the cloud hanging over him and his constituency. Again, the message was clear: swift and decisive action is needed, particularly given that the cost of raw materials will rise once we leave the EU.
The hon. Member for Hartlepool (Mr Wright) spoke of his admiration for his colleagues and what they were doing every day. Other Members spoke about the personal impact the issue is having. It is so important that we send that message to people outside. Members are in their constituencies as much as they can be, but with so much business here, balancing things is a big challenge. I know from travelling up and down the country how difficult that can be. We may have many differences of opinion, but the hon. Members for Scunthorpe (Nic Dakin), for Neath (Christina Rees) and for Newport East (Jessica Morden) sent a clear message. They made passionate pleas to the Government.
The consensus and the message is that we need strategy, action, investment and access. Those things are not outside the grasp or ability of any Government. The Government need to act now to save jobs and an industry that is vital to constituencies and areas across the UK. Through that, the communities of Members here today can be protected.
Gill Furniss (Sheffield, Brightside and Hillsborough) (Lab)
It is a pleasure to serve under your chairmanship this afternoon, Mr Betts. I begin by congratulating my hon. Friends the Members for Middlesbrough South and East Cleveland (Tom Blenkinsop) and for Redcar (Anna Turley) on securing this vital debate. I also congratulate all my hon. Friends who have spoken. I welcome the new Minister to his place. The irony is not lost on me: I am a daughter of a steelworker addressing a Minister who has a family link with steelmaking. I think I heard that at the beginning of the debate.
The number of Members who have spoken today speaks volumes about the importance of the issue. It is a pleasure to be among this dedicated group who have been fighting for the future of the steel industry with such determination for many months and years. We must pay tribute to the all-party group. I am sure we are all awaiting the forthcoming report. I also thank the trade unions and their officials for their hard work representing their members and supporting them and the wider communities that rely on steel in incredibly uncertain times. Both they and the manufacturers have approached the situation constructively. I thank the Daily Mirror for its ongoing “Save Our Steel” campaign, which has done so much to keep the issue on the political agenda and to raise wider awareness of how crucial the steel industry is to the economy.
The last time Parliament debated the crisis in the steel industry was at the beginning of July, shortly after the EU referendum and David Cameron’s announcement that he would be standing down as Prime Minister. Members were grappling with the consequences of those things for the future of the steel industry. There were a lot of questions, but few solid answers.
Four months on, very little has changed. We have seen the chairman of Tata replaced by his predecessor, but the future of Tata steelworks across the country is no clearer than it was previously. Thanks to the drop in the pound’s value, a slight rise in steel prices globally and, not least, the dedication of our steelworks, there has been a slight improvement over the past few months. However, we must not let an uptick distract us from the fact that the industry is still in a deep existential crisis—it is hanging by a thread.
The industry has had plenty of warm words from both the old Prime Minister and the new, but so far there has been little in the way of practical policy. Although the new Prime Minister has spoken about strategically important industries needing Government support, steel manufacturers are crying out for the rhetoric to be matched by action. We have seen that Ministers are prepared to support industries in need—just look at their recent deal with Nissan. As much as we would all love to know what the deal entails, I appreciate that this may not be the debate in which to discuss it. Nevertheless, I am grateful to the Government for ensuring the continuing presence of Nissan in the UK, not least because the automotive sector is of critical importance to steel. It does, though, prompt the question: if Nissan and the automotive industry can be supported, why not steel?
With all the uncertainty hanging over the steel sector, workforce morale is understandably low. Workers are casting about for alternative careers, and once they have taken their expertise with them, they cannot be easily replaced. They need reassurance that their jobs and their industry have a viable future, and they need that reassurance now. Uncertainty also means a steady shrinking of customer confidence, and there is no surer way to undermine the steel industry than to allow its customers to think that it has no future.
Both the workforce and the manufacturers are united in calling for the Government to take a number of concrete steps. Members have highlighted those key asks this afternoon, and I want to reiterate them to the Minister and ask how his Department will respond to each of them.
The first issue is energy prices. The price of electricity in the UK for extra large users is the highest in the EU, to such an extent that it undermines our competitiveness. The difference means that UK steel manufacturers pay nearly £17 more per megawatt-hour than Germany—the next most expensive—costing the UK steel industry nearly £1 million every week. Industry has put forward a number of proposals to balance that disparity, such as a review of National Grid’s transmission charging regime and a review of the impact of the carbon price floor. However, the response from the new Department for Business, Energy and Industrial Strategy has so far been silence. Now that business, industry and energy are all under one departmental roof, I shall be interested to hear what discussions the Minister has had with his colleagues on the matter.
Gill Furniss
We have to look throughout Europe and find examples of best practice that we can adopt in this area of work, which is clearly important.
Secondly, there is the issue of business rates. By including plant and machinery in business rate calculations, we are not only at variance with but less competitive than France and Germany, where business rates are as much as 10 times less than ours. We are also creating a disincentive for manufacturers to increase productivity and are effectively taxing investment. Perhaps the best example is in Port Talbot, where Tata invested £185 million in a new blast furnace only to find £400,000 added to their business rates. Our current one-size-fits-all regime for business rates is a hangover from the days when manufacturing dominated our economy. That has not been the case for decades, and we need a tax regime that reflects that change.
Tom Pursglove
Does the hon. Lady agree that a balance has to be struck on taxes? Taking her back to the energy point, one of my concerns is that in the past, the right balance has perhaps not been struck between green taxes and levies and making sure that the needs of our energy-intensive industries are properly reflected in policy. What does she make of that? Is she concerned about the green taxes and levies?
Gill Furniss
The hon. Gentleman makes a very good point, but a lot of work needs to be done in the green energy industries to start with, because we really are missing a bit of a home goal by suddenly putting them on the sidelines. I am sure we will pursue that.
Tom Blenkinsop
On green taxes, I remind the House that the Opposition voted against the unilateral introduction of the carbon price floor by the previous Chancellor of the Exchequer. That was brought in without any conversation with the industry and without the EU’s prior knowledge. When the then Government attempted to reverse that, they were prevented from doing so by European legislation. My hon. Friend will also be aware that as well as opposing the CPF, we also put forward business cases for the industry.
Gill Furniss
I thank my hon. Friend for that point. Thirdly, I want to give credit where credit is due and thank the Government for the guidance published in October last year, which has put some emphasis on supporting British steel in major procurement projects. However, despite the good intentions behind that move, we are still seeing major contracts going to foreign steel manufacturers, most famously the new Trident submarines, which are being built with French steel. Had a British firm been engaged to supply the steel, more than 1,000 jobs would have been supported, but alas, that is not the case. Will the Minister commit to ending the exemption from the guidance of tenders funded through contracts for difference? Will he look at strengthening the guidance better to reflect the social and economic consequences of current procurement decisions? Will he follow the examples set by the Scottish and Welsh Governments and publish future pipelines of projects so that British steel manufacturers can prepare themselves to fulfil future demand?
Fourthly, there is the issue of trade defence mechanisms and Chinese dumping. Whatever else Brexit may mean, it is absolutely vital for the industry that we avoid any sort of punitive restrictions on access to the European market. Last year, more than two thirds of our steel exports went to EU countries and our own steel industry is closely bound up with the Dutch plant at IJmuiden. Our trade defence mechanisms depend so much on what the final Brexit deal looks like, but whether or not we find ourselves bound by the rules of the single market, it is critical that the UK stands up for fair trade globally. While we still have a voice in the European Commission, we should be throwing our weight behind the scrapping of the lesser duty rule, which is hamstringing all efforts to counteract Chinese dumping, and opposing China’s application for market economy status, which will kill those efforts stone dead. Free trade does not mean fair trade and until the Government wake up to that reality, the steel industry will never have the level playing field it is asking for.
On the industrial strategy, the difficulties that the steel industry has with energy prices, business rates, procurement problems and unfair global trading practices are all issues that the Government need to address immediately. There are swords dangling over the industry’s head, but if British steel is going to not just survive but thrive, it needs a proper long-term industrial strategy to put it on the right track for the future. I am glad that the Department for Business, Energy and Industrial Strategy has commissioned research into the future capacity and capability of the steel industry. I and no doubt all of us here are looking forward to its findings next year.
Every job in steel supports three in the supply chain and the industry really is the cutting edge of UK manufacturing. Most of the types of steel being produced were not even in existence 15 years ago. Steel will play a central role in our transition to a low carbon economy if we manage it correctly and it can continue to lead the world in terms of quality and innovation. Will the Minister reassure us that BEIS will put steel at the heart of its industrial strategy?
Steel is not a dying industry. It is not a relic of a bygone era. It may be a proud part of our industrial past, but it also has the potential to be a dynamic part of our economic future. Without it, we will not only have lost an industry—make no mistake—we will have lost our entire manufacturing base. No one is asking for special treatment; we are asking for a level playing field that will allow the industry to move forward with confidence. Four months on since we last debated this issue, the steel industry is still in crisis. I urge the Minister to show more energy than his predecessors and do what it takes to save our steel.
Mr Clive Betts (in the Chair)
If the Minister would just allow a few minutes at the end for the wind-up speech, that would be appreciated.
The Minister for Climate Change and Industry (Mr Nick Hurd)
I will certainly do that, Mr Betts. It is a pleasure to serve under your chairmanship and to welcome the new shadow Minister, the hon. Member for Sheffield, Brightside and Hillsborough (Gill Furniss), to her place.
It has been a really good debate. I know I am meant to say that, but I mean it. Anyone listening to or reading the debate whose livelihood depends directly or indirectly on this critically important sector will be in no doubt about the passion felt for the sector by their elected representatives, on both sides of the House, who have championed their interests, and none more so than the hon. Members for Middlesbrough South and East Cleveland (Tom Blenkinsop) and for Redcar (Anna Turley), who made this debate happen and who have spoken so effectively.
I do not think that I or anyone will ever give the hon. Member for Redcar full satisfaction on an explanation for the past, but she knows from the meeting that she had with me and the Secretary of State that we are determined to do everything we can, on top of the support for the taskforce, to support and engineer a beautiful rebirth of the site to the best of our ability. I repeat my offer to visit at whatever point is appropriate and valuable. The hon. Member for Middlesbrough South and East Cleveland gave a masterful speech. It was extremely well informed and constructive, and contained a good mix of challenge both for his party’s Front Bench and for the Government.
Out of respect for the debate, I am going to resist what was already a weak urge to simply unload a section of prose prepared by civil servants. I will do my best to try to respond to the debate. First, I must do something important, which is to register our complete understanding of the frustration about the uncertainty, which various Members have expressed. That is entirely understandable. I will go further and say that the Government share that frustration, because we are deeply worried, as I will come on to say, about the deep structural difficulties that the sector faces in both the long and short term.
As most Members who know more about this industry than I do will recognise, those underlying issues are extremely complicated, and therefore the solutions that the Government can implement that would have a long-term, sustained impact—that is what we should be about—are not that straightforward. I will be very frank: we are also frustrated about the pace and speed at which decisions are being taken in the private sector. I give full assurance to the Members who probed on that point that, although we might be in a slightly different age, when the steel industry is not necessarily on the front page of the newspapers, the Government are deeply aware that the difficulties have not gone away. We are fully engaged at all levels—ministerial, Secretary of State and official—to stay as close as we can to all the complex conversations that are going on. Our message to everyone is that we are here to support a long-term, sustainable future for the sector.
I refute and push back on the suggestion that underlay a number of speeches: that the Government’s eye is somehow off the ball. That is not true. We absolutely share the view expressed in the debate—I heard the Secretary of State say this directly to the chief executives of the industry—that this is not an industry with a past or a sunset industry, as the hon. Member for Hartlepool (Mr Wright) called it, that we should look at through a lens of nostalgia. We are interested in working together with the sector, stakeholders, the all-party parliamentary group, the Select Committee and everyone else who wants to shape the industry, to present a story around the sector of growth and seizing some of the very real opportunities that are out there. We are entirely sincere in that view and in that determination.
It is worth restating that that is not just because of the importance of the sector, which employs 31,000 people, or because of the huge weight and importance it has to the fundamental identity of many towns across the country represented here today, its value in terms of exports, or the fabulous opportunities that we see for it to be positioned as a dynamic component in an invaluable supply chain, supporting some of the industries where we see big opportunities for growth—the hon. Member for Hartlepool mentioned a couple of those, such as the automotive industry and offshore wind. It is not just for those reasons, but, as the hon. Member for Middlesbrough South and East Cleveland and other Members described, because we see it as a foundation sector underpinning the infrastructure of this country. It is, in that respect, strategic. We are determined—I echo the words of my long-standing hon. Friend the Member for Wellingborough (Mr Bone)—that this sector has got to have a future. We must collectively shape that.
In that context, we totally understand that, even though there may have been some short-term improvement in trading conditions, we cannot be deceived. The Secretary of State and I had a meeting with the chief executives of most of the major companies last week, and they were very clear that trading performance is improving in some ways, but they do not trust that to be sustainable. The overwhelming, crushing issue is that the picture of overcapacity in the industry has not changed, despite some shifts at the margins. Demand remains weak, the volatility of raw material prices is an issue, particularly for coke, prices remain a problem and the spread remains a concern. In conclusion, the situation remains very difficult. We have no illusions about that.
Some of the rhetoric has been: “The Government are all talk. It’s all words.” I am not complacent about this, but I need to state categorically, and to echo the words of my hon. Friend the Member for Corby (Tom Pursglove), that although the work is not done, action has been taken in some critical areas. We are aware that energy costs—specifically industrial electricity costs—remain a significant problem, but since 2013 more than £120 million- worth of public resource has been effectively reallocated to the steel sector to mitigate these problems. To anyone who describes that as limited, I say that my constituents would not consider £120 million to be small change. I know that is appreciated by the industry, and anyone who says that it is just words on this issue is wrong.
Mr Hurd
I hope I have never been associated with sloth—my mother might disagree. I do not know the background to it fully enough, but the more substantive point is that, despite that weight of money, more clearly needs to be done. We have not solved the issue. The pace may be important, but the fundamental challenge for us all is that we have not cracked the problem.
Angela Smith
I am pleased to hear that last comment, because the wholesale costs of energy are also of major concern, not just for steel but for the chemicals industry and all other energy-intensive industries, so the Government need to move on the reform of the wholesale energy market.
Mr Hurd
I will come on to that issue. The point I am trying to make is that the Government have not been all talk: we have taken action on energy.
I refute the allegation that the UK has been a fundamental obstacle on dumping. We have pressed for anti-dumping measures, specifically on wire rod, seamless tubes, rebar and cold rolled products. The EU now has 39 trade defence measures in place, and imports have fallen significantly as a result. We are an active member of the G20, which, as hon. Members know, set up a forum to look at the issue of dumping. The lesser duty rule is an issue; I do not know whether there is party division on that. Our position is that measures taken against dumping need to be proportionate because we have to balance the interests of consumers, the industry and businesses. We have been and will continue to be a very active voice on dumping.
My hon. Friend the Member for Corby rightly talked about procurement. Again, the UK has been the leader in the EU on responding to the new flexibilities, and new guidelines are in place. The feedback from the chief executives at the meeting last week was that they did not really want to talk about procurement because they recognised that action had been taken and other issues were more important to them, not least business rates, which I acknowledge continue to be an issue. The Government have reformed business rates in a way that is designed to present a net benefit to the UK economy. Steel companies will benefit from that reform. Does it go as far as the steel industry wants? No. Are there big complexities, not least around the affordability and doability of what the steel industry wants? Yes, but we will continue to try to work through them.
On the strategic direction, the Government have stepped up and offered to fund the capability study and work with the sector to identify the capabilities that are needed—that was the point made by the hon. Member for Penistone and Stocksbridge (Angela Smith)—and growth opportunities for the future. There has been action, but we are clear that our work is not done. There is no room for complacency, given the pressures on this critically important industry.
We are looking at all the options for energy. They are complicated, because what we have got to do is legal and, as the hon. Member for Middlesbrough South and East Cleveland said, a consensus has to be built on who pays. If the steel industry pays less, the chances are that someone else is going to have to pay more. Our instinct is to focus on a strategic, sustainable approach; we have to move on from the sticking-plaster approach. I am glad hon. Members are nodding.
I am going to accelerate to fulfil my pledge. Of course Brexit brings tremendous uncertainties. As hon. Members know, we have not even started the negotiation process, let alone finished it, but I say to them what I said to the chief executives last week: this Department is your liaison point. It is our responsibility to listen very carefully to the sector to make sure that the issues you face are totally understood by the Government. In that respect, the steel sector is the same as the automotive sector and other sectors. Our responsibility is to listen to the sector and understand the granularity of the issues it faces so my Secretary of State, who is at the table with the decision makers in this process, is fully informed and able to represent the industry.
Stephen Kinnock
The Minister is making a comprehensive speech. On the topic of Brexit and inter-departmental co-operation, I draw his attention to the remarks made by the Secretary of State for International Trade. He said:
“We must turn our backs on those that tell us: ‘It’s OK, you can protect bits of your industry, bits of your economy and no one will notice.’ It is untrue…We must be unreconstructed, unapologetic free traders.”
Does the Minister think that, under his right hon. Friend’s guidance and as we leave the European Union, our ability to deploy trade defence instruments against the dumping of Chinese steel will be strengthened or weakened?
Mr Hurd
I am going to accelerate now. We are clearly being proactive about championing both free and fair trade, and we are very active with the EU on measures about that. As my hon. Friend the Member for Corby made clear, Brexit may in theory present us with some opportunities and freedoms that we do not have at the moment, but all that is to be decided. It all needs to be agreed as a result of very full engagement with the sector.
My final point is about industrial strategy, which is where everything comes together. I will simply say what we said to the industry leaders: we want to work together to move the story of the sector away from any suggestion of sunset, failure or survival to talk of exciting growth. We need to work together on that to understand where the opportunities for growth are, where the capabilities are and where Government can provide support by ensuring that Brexit is right, by levelling the playing field and by helping with the innovation that is critical. We are absolutely serious in that determination. With that, I leave the Floor open to the sponsors of the debate.
Tom Blenkinsop
It is interesting that the Minister said that the Government’s eye was still on the ball and talked about short-term gains, but said that we should not underestimate the long-term issues of overcapacity in the industry and that the Government were under no illusions. He has reassured us that the Government are not all talk, but that action in critical areas has happened—it has, to a certain extent, but we will see more in the developing months.
The Minister refuted any assertion that the Government were an obstacle on dumping, and he said that he believed in free and fair trade, which Labour Members and certainly the all-party group warmly accept.
I agree with the Minister on energy, that there has to be a consensus on how we make progress to stabilise not only the steel industry but manufacturing per se. I am very interested in working with him, as is the rest of the APPG, on formulating an industrial strategy for Britain.
The Minister is obviously very charming. He has been warmly welcomed by my Opposition colleagues, but that will only go so far. We will be keeping a careful watch on him, his colleagues and his superiors about delivery on the promises, warm words and charm of today’s debate. We want to work with the Minister and the Government Front Benchers as much as possible, because our communities, our people and the very culture that we all come from depend on our creating success for the British steel industry and associated manufacturing industries. I thank the Minister for his response today.
Question put and agreed to.
Resolved,
That this House has considered the future of the steel industry.
Written Statements
(8 years, 1 month ago)
Written StatementsRead Full debate Read Hansard Text
Trade Union Industrial Action: Electronic Balloting
(8 years, 1 month ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Margot James)
Section 4 of the Trade Union Act 2016 specifies that the Government should make provision for an independent review to consider the delivery of secure methods of electronic balloting of trade union members.
The Government are committed to the independent review and I am pleased to announce today that Sir Ken Knight CBE, the former Chief Fire and Rescue Adviser for England, will chair the review.
I am publishing the terms of reference in parallel. The review will start shortly and the final report presented to Parliament no later than December 2017.
[HCWS234]
Gosport Independent Panel: Terms of Reference
(8 years, 1 month ago)
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The Minister of State, Department of Health (Mr Philip Dunne)
I wish to update the House about the investigation into Gosport War Memorial Hospital.
On 10 July 2014, the former Minister for Care Services (Norman Lamb), announced the establishment of the Gosport independent panel, chaired by Bishop James Jones, to review documentary evidence held across a range of organisations concerning the initial care of families’ relatives and subsequent investigations into Gosport War Memorial Hospital.
When the former Minister announced the terms of reference for the Gosport independent panel on 9 December 2014 the Government expected the panel to complete its work by December 2017 [HCWS78].
As a consequence of the greater number of families now in contact with the panel and the increase in the volume of material the panel is reviewing, the panel now expects to complete its work in spring 2018.
It is also available online at: http://www.parliament.uk/writtenstatements.
[HCWS233]
Immigration Rules
(8 years, 1 month ago)
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The Minister for Immigration (Mr Robert Goodwill)
My right hon. Friend the Home Secretary is today laying before the House a statement of changes in immigration rules as set out below. These changes continue our reforms to the UK immigration system.
The changes we are making to the rules will ensure that those who do not qualify for international protection on account of their conduct, for example serious criminality, are not granted settlement or limited leave to remain in the UK under the immigration rules.
We are also abolishing the “28-day grace period”, during which we currently accept out of time applications for a range of routes including work and study, to encourage greater compliance with the immigration rules. This will make clear that people must comply with the rules and make any application for further leave before their current leave expires.
The changes also include the reduction in the threshold of NHS debt from £1,000 to £500 for family cases and armed forces cases to align with changes made elsewhere in the rules in April 2016.
The changes also provide for a new English language requirement for non-European economic area national partners and parents applying to extend their stay in the UK. The new requirement, which can be met by passing, as a minimum, an A2 level common European framework of reference for languages speaking and listening test, will apply to partners and parents whose current leave on a five-year route to settlement under the family rules is due to expire on or after 1 May 2017.
The new A2 requirement will deliver on the Government’s manifesto commitment to ensure that those coming to the UK on a family visa with only basic English become more fluent over time. We believe this will improve integration in communities. An associated statement of intent and policy equality statement will be published today on gov.uk.
Following a review by the independent Migration Advisory Committee, on 24 March 2016 the Government announced two phases of reforms to tier 2, to be implemented in autumn 2016 and April 2017. The changes being laid today implement the first phase of these reforms. This includes changes to the salary thresholds for tier 2 (general) and short-term intra-company transfers (ICTs), and closure of the ICT skills transfer category. There are exemptions from the new salary for certain occupations in health and education.
We are also making technical changes to the immigration rules to clarify the concepts of a first country of asylum and a safe third country.
[HCWS235]
House of Lords
Business of the House: Sub Judice
The Lord Speaker (Lord Fowler)
My Lords, with the leave of the House, I wish to make a Statement on the sub judice rule in respect of the forthcoming appeal to the Supreme Court in relation to the triggering of Article 50. As the case relates to a ministerial decision, it is not covered by the House’s resolution on the sub judice rule, and noble Lords may make reference to the issues in debates or Questions.
Brexit
(8 years, 1 month ago)
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Lord Soley
To ask Her Majesty’s Government what assessment they have made of the impact on their negotiations with the European Union on Brexit and the United Kingdom’s future relationship with the European Union of the pursuit by other European Union member states of ever-closer union.
The Parliamentary Under-Secretary of State, Department for Exiting the European Union (Lord Bridges of Headley) (Con)
My Lords, the future direction of the EU is a matter for its remaining members, but we intend to co-operate and collaborate on matters of mutual interest once we leave the EU. We do not see Brexit as ending our relationship with the EU; it is about starting a new one that is dynamic and constructive.
Lord Soley (Lab)
Perhaps this morning’s developments indicate how fast moving and difficult it is to predict the direction that these negotiations and discussions will take. I am increasingly concerned about this talk of hard and soft Brexit when crucially, regardless of what happens with the court decision at the end of the day, what matters is that Parliament is involved in trying to work out a good arrangement—good for the United Kingdom and good for the European Union. Many of those members will continue to move towards ever-closer union. We must be sensitive to that, and I hope that the Minister will confirm that.
Lord Bridges of Headley
My Lords, absolutely, and I thank the noble Lord for giving me the opportunity to say this. As my ministerial colleagues have said, while we are leaving the EU, we are certainly not going to turn our backs on Europe. I share the noble Lord’s concern about the use of language. The Prime Minister has made it very clear that we are not adopting an off-the-shelf approach; we are looking for a bespoke approach. We want a relationship that will reflect mature, co-operative arrangements in the future, with close friends and allies with whom we have been partners for a number of years and with whom we continue to face common challenges. Once we have left the EU, those common challenges will remain, and it will be utterly in our national interest to look to see how we can continue to co-operate with our European partners once we have left.
Baroness Smith of Newnham (LD)
My Lords, clearly it is in the interests of the United Kingdom that the European Union is a stable partner, so ever-closer union for the 27 might be desirable. But in light of today’s developments, will the Minister bring forward a Statement letting us know how Parliament might be involved in triggering Article 50?
Lord Bridges of Headley
I had expected that question. The Government are clearly disappointed by the court’s judgment. The country voted to leave the European Union in a referendum approved by an Act of Parliament, and the Government remain determined to respect the vote of the referendum. We will appeal this judgment. I have nothing further to say at this precise juncture. I am sure that more will be said in due course.
Baroness Hayter of Kentish Town (Lab)
My Lords, it is interesting that Brexit was all about parliamentary sovereignty. We regret that the Government will now appeal against the judgment to give this decision back to Parliament. In fact, if the Government do not like the Supreme Court’s decision, perhaps they will try the European Court of Justice. We accept that we will trigger Article 50, but what is important now are the terms of that. Parliament can help to shape the basis on which we leave. It would be better to welcome this decision—and I ask the Minister to do that—to work with the judgment of the court and to take this important decision to Parliament.
Lord Bridges of Headley
I have nothing further to add to what I said a moment ago. The Government’s decision is to appeal this judgment. The referendum result was clear. Some 17.4 million people voted to leave, and the Government have made it clear that they wish to deliver on that.
The Lord Privy Seal (Baroness Evans of Bowes Park) (Con)
My Lords, it is the turn of the Cross Benches.
Lord Hylton
My Lords, does the Minister agree that the Question underlines the importance of this country’s role in all the other European institutions other than the EU?
Lord Bridges of Headley
Yes, I think the noble Lord is referring to the institutions that operate external to the EU and which have helped to underpin our security. At the same time, I would point out that, as regards defence, the Government believe that NATO is the bedrock of our defence policy. On the wider point that is implicit in the noble Lord’s question, there are a number of areas of co-operation as regards defence, security, and research and development which we will wish to look at in the future to see whether our continued co-operation and collaboration fulfil our national interest.
Lord Reid of Cardowan
My Lords, I am afraid that it is woe after woe for the Government. On top of this morning’s decision by the High Court, has the Minister had a chance to read the clear statement of the chair of the European Parliament’s Constitutional Affairs Committee, Danuta Maria Hübner, who has made it absolutely clear that any EU follow-on free trade agreements will not occur simultaneously with Brexit—in other words, it will be possible to negotiate only at the end of the Brexit arrangements? Those discussions will be subject to a unanimous vote, including of the sub-state parliaments in Europe. This has the potential to add years to the process and is a complete contradiction of the statements expressed publicly by the Secretary of State for International Trade. Will the Minister respond?
Lord Bridges of Headley
I have little to add to what my colleague the Secretary of State for International Trade has said, other than that we will obviously abide by the obligations set out by the WTO when we look to forge future negotiations, and likewise with the EU when we look to forge future arrangements with other non-EU countries. I have nothing further to add at this juncture.
Lord Forsyth of Drumlean (Con)
My Lords, will my noble friend confirm that the Government are determined to carry out the wishes of the British people and enable us to leave the European Union? While understanding that the Government were required to indicate that they would have to appeal in order to take the matter forward, they do not have to go ahead with that. Given that the Opposition have made their position absolutely clear—indeed, noble Lords will recall that the leader of the Opposition called for us to implement Article 50 immediately—what exactly is the difficulty with having a vote in the House of Commons on that matter of principle?
Lord Bridges of Headley
My Lords, the Government have made their position clear as regards this judgment, but I can assure my noble friend that we intend to deliver on the verdict of the British people in the referendum, and furthermore to deliver on our manifesto promise to respect the outcome of the result of that referendum.
Lord Campbell of Pittenweem (LD)
My Lords, I appreciate that the noble Lord has restricted himself in the comments he may make, but perhaps I may ask him whether he agrees with two principles. The first is that, no matter how high you are, the law is above you. Secondly, will he affirm unequivocally the sovereignty of Parliament?
Lord Bridges of Headley
My Lords, we absolutely will abide by the sovereignty of Parliament, but I should also say that the reason we are abiding by the process before us is to ensure that we follow the options open to us as regards appealing. That is what we are doing.
Lord Pearson of Rannoch
My Lords, if all the other member states really are determined to go on sailing straight at the three icebergs of the euro, immigration and the EU’s ruinously uncompetitive overregulation—and there are signs that some of them are not—surely we should be even more determined to get off their “Titanic” as soon as possible.
Lord Bridges of Headley
My Lords, a number of options are open to us as we leave the European Union. We intend to make the most of the opportunities that present themselves, while maintaining the freest possible access to the market of the European Union.
Aviation: Sharm el-Sheikh
(8 years, 1 month ago)
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Lord Risby
To ask Her Majesty’s Government what is their current guidance on flights from the United Kingdom landing in Egypt, and in particular Sharm El-Sheikh.
The Parliamentary Under-Secretary of State, Department for Transport (Lord Ahmad of Wimbledon) (Con)
My Lords, following the Metrojet crash, the Foreign Office travel advice was changed so that direct air services between the UK and Sharm el-Sheikh Airport were halted. Flights to all other Egyptian airports were unaffected. UK aviation security experts continue to work closely with their Egyptian counterparts on the ground, sharing their expertise in establishing effective security arrangements. We look forward to achieving the return of flights once we can be assured of there being the necessary secure and sustainable security situation on the ground.
Lord Risby (Con)
My Lords, all your Lordships will want to be assured about the safety and security of British tourists abroad. Given the considerable improvements that have been instituted at Sharm el-Sheikh Airport, we now have a situation where Belgian and German flights are being resumed. Indeed, as my noble friend said, all other Egyptian airports are open for business. In these circumstances, given that Sharm el-Sheikh is the epicentre of Egyptian tourism, will my noble friend look afresh and very directly at these new changed circumstances, given the catastrophic impact on the Egyptian economy and its stability, and on our winter tour operators?
Lord Ahmad of Wimbledon
I can assure my noble friend that we are mindful of the impacts that have been felt locally. As my noble friend will be aware from his recent visit, our officials from the DfT have been working very closely with the Egyptians on the ground. He mentioned other nations choosing to return flights. That is very much a matter for them, but I am minded of the fact that we are yet to see the final results of the inquiry that the Egyptians have conducted into the Metrojet crash. He will also be aware that the Russians, who were obviously involved directly in that inquiry, are also yet to report back, although they did provisionally say that the crash resulted from a terrorist attack on the plane.
Lord Stone of Blackheath (Lab)
My Lords, when I was at Marks & Spencer, we did not employ technologists who delighted in banning things because of risk; we employed people who had the creativity to find solutions. Are those responsible for banning these flights aware of the risk to British citizens of radicalising the 4 million people we are putting out of work in Egypt?
Lord Ahmad of Wimbledon
As a former Minister responsible for countering extremism, I can assure the noble Lord that we are very much cognisant of the challenges we face, not just on aviation security. We work very closely, here in the UK and abroad, to ensure that those challenges of counter-radicalisation can be met head on and are working with communities on the ground.
Lord Marlesford (Con)
My Lords, do the Government recognise that Egypt is one of the few beacons of hope in the Middle East? To allow its economy to be damaged as it is being damaged risks undermining President Sisi’s attempt to establish a tolerant, secular state where all religions are acceptable, and risks encouraging the Islamists who are still trying to regain power through the Muslim Brotherhood.
Lord Ahmad of Wimbledon
Let me assure my noble friend, as I have already intimated, that we, more than any other country, have been working very closely with the Egyptians on the ground and we continue to do so. Indeed, we have a permanent presence in Egypt, not just in Sharm but in other airports, to ensure first and foremost the safety and security of our own citizens, but equally working closely with the Egyptian authorities to ensure we can have the resumption of flights as soon as possible.
Lord Rosser (Lab)
The problem over Sharm el-Sheikh has been going on for some time. Can the issue over security now be resolved quickly to our satisfaction, or are the differences of view between ourselves and the relevant Egyptian authorities fundamental and seemingly irreconcilable in the near future?
Lord Ahmad of Wimbledon
It was on 31 October last year—so just a tad over a year ago—when 224 lives were lost. The Government were right to take the view to suspend flights in light of the incident that occurred, but it is also right that we should await the formal reports of the investigations. However, we are not just taking a step back. More than any other nation, we are working on the ground together with the Egyptian authorities to ensure that we improve security and can resume flights, as soon as we are assured of the sustainable nature of their security arrangements.
Lord Wallace of Saltaire (LD)
My Lords, British tourists also go to the upper Nile valley and to the Sinai when visiting Egypt. There have been a number of incidents involving terrorists in both those areas over the years. Are the British Government working closely with the Egyptians to ensure that tourism can safely be encouraged in those regions as well?
Lord Ahmad of Wimbledon
The safety and security of our citizens is paramount in our mind. The noble Lord is quite right to point out other areas. The short answer to the noble Lord is yes. We work together with Egypt and other countries around the world to ensure that the international global connectivity that aviation provides is safe and secure for everyone.
Baroness Symons of Vernham Dean (Lab)
My Lords, I declare an interest as the chairman of the British Egyptian Society, which is a charity. In that capacity, I have been to Egypt several times this year. I fully endorse everything that has been said about the importance of the safety of British citizens, but the impact of the situation on some of the poorest and most destitute people, who would normally be engaged in the tourism industry, cannot be overestimated. It is an opening for those within Egypt who do not wish Egypt well and are fostering terrorism. Like the noble Lord, Lord Risby, I ask the Minister whether he will look afresh at this and do everything he can.
Lord Ahmad of Wimbledon
I assure the noble Baroness and the whole House that it is not just about looking at this afresh but about looking at it consistently to ensure the resumption of flights. Egypt is a friend. We want to ensure that we avert the challenges that it faces—issues of radicalisation were mentioned—and work with it across the piece, whether it is on aviation security or on countering radicalisation. It is our earnest belief that the impacts that the noble Baroness talked about can be alleviated at the earliest opportunity.
Trustees
Lord Shinkwin
To ask Her Majesty’s Government what they are doing to celebrate Trustees’ Week, to highlight the work that trustees in the United Kingdom are doing.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord Ashton of Hyde) (Con)
My Lords, charity trustees play a vital role in society, freely giving their time to ensure that charities are well run and make a difference. Each year, the Charity Commission works with a coalition of charities and other charity regulators on Trustees’ Week to celebrate this and highlight opportunities for people from all walks of life to get involved. This year, Trustees’ Week will take place from 7 to 13 November and the theme will be: stronger charities through good leadership.
Lord Shinkwin (Con)
My Lords, I was privileged to spend much of my career in the charity sector, including at that wonderful charity, the Royal British Legion, so I saw at first hand the real difference that trustees can make. Does the Minister agree with me that the time and energy given to charities by those who volunteer as trustees prove that we live in a compassionate society? Does he further agree that we must do everything we can to promote the values of compassion and public service?
Lord Ashton of Hyde
My Lords, I agree with my noble friend, who speaks with significant expertise in the charity sector, especially the Royal British Legion, which noble Lords are supporting today. The latest figures from the Charities Aid Foundation show that we continue to be a generous nation in giving money and time to help others. We are eighth in the World Giving Index and, interestingly, the most generous in Europe. We hope that Trustees’ Week will raise the profile of the excellent work that trustees do in the charity sector.
Baroness Pitkeathley (Lab)
My Lords, I join the noble Lord, Lord Shinkwin, and the Minister in praising the work of trustees—and, indeed, the trustee work undertaken by so many Members of your Lordships’ House. Does the Minister agree that we need to widen the range of people who become trustees? What are the Government doing to promote interest in trusteeship among younger people and people from diverse backgrounds?
Lord Ashton of Hyde
I agree with the noble Baroness. There are already about 85,000 young charity trustees aged between 16 and 34 out of the 1 million trustees in the UK, but more can be done. The past focus of Trustees’ Week has been to encourage more young people to take up charity trustee positions. The Charity Commission also produces best practice guidance for charities on recruitment and detailed guidance on how to involve young people in running a charity. I agree with the noble Baroness on diversity. At the moment it is roughly 50:50 between men and women, but more can be done as far as ethnic communities are concerned.
Baroness Barker (LD)
My Lords, the Charities (Protection and Social Investment) Act 2016 gives the Charity Commission extensive powers to disqualify people from acting as trustees. Will the Government monitor the commission’s exercise of those powers and, in particular, the effect on charities which exist to rehabilitate offenders?
Lord Ashton of Hyde
The noble Baroness is quite right that that Act gave the Charity Commission more extensive powers, and the things she mentioned are monitored. The commission opened 100 statutory inquiries and used its legal powers more than 1,000 times in 2014-15, compared with 15 statutory inquiries and 200 uses of legal powers in the previous year, so it was already doing more, but I take note of what the noble Baroness says about the things that should be monitored.
Lord Cormack (Con)
My Lords, I declare an interest as chairman of the Historic Lincoln Trust. Does my noble friend recognise that trusts depend very much on volunteers? It really is important in this next week that we recognise the importance not only of trustees, but of the volunteers upon which so many enterprises depend.
Lord Ashton of Hyde
Of course, I agree: volunteering is very important to organisations, but it is also very rewarding to those who volunteer. Going back to a previous question, volunteering among young people is rising. Among 16 to 25 year-olds, monthly volunteering is at 32%, up from 23% in 2010. The National Citizen Service Bill, which is coming before a Committee of this House soon, shows that graduates of the NCS programme increasingly volunteer. That is a good point to bear in mind.
Baroness McIntosh of Hudnall (Lab)
My Lords, is the Minister aware of the good work of an organisation of which I am proud to be a trustee, the Roundhouse in north London? We have a long-standing and enlightened programme of bringing very young trustees on to the board every year. Is he also aware that the duties of trustees are increasingly onerous? It is pretty difficult even for people with a lot of experience to feel completely confident that they are on top of everything they are responsible for. It is very important, therefore, in bringing younger people, particularly people between the ages of 18 and 25, on to trustee boards, that they are properly trained and monitored and mentored while they are serving.
Lord Ashton of Hyde
Of course, I agree that that is important. It is particularly useful that young trustees can sit alongside older and more experienced ones and learn. The Charity Commission gives as much guidance as it can and is always refining that guidance, both for existing and young trustees. I make the point that the Charity Commission is not there to second-guess trustees, but to use its powers to correct areas of significant abuse. For most trustees, the Charity Commission does not invoke its powers at all.
Lord Hamilton of Epsom (Con)
My Lords, following the comments of the noble Baroness, Lady McIntosh, can the Minister confirm that most trustees are not paid but their liabilities for whatever charity they are involved in are unlimited, as the trustees of Kids Company are now finding out? I declare an interest as the trustee of many charities.
Lord Ashton of Hyde
My noble friend is right that most trustees are not paid. Generally, the voluntary sector regards that as a good thing and does not want them to be paid. However, it is possible, with Charity Commission permission, to pay trustees; for example, for youth and diversity reasons it might be sensible to pay a trustee. I take on board my noble friend’s point about liability.
Prisons: Self-inflicted Deaths
(8 years, 1 month ago)
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Lord Harris of Haringey
To ask Her Majesty’s Government, in the light of the increase in the number of self-inflicted deaths in prisons in the 12 months to 30 September, what steps they will take to ensure the protection of potentially vulnerable prisoners.
The Advocate-General for Scotland (Lord Keen of Elie) (Con)
My Lords, safety in prisons is a vital part of our reform plans. The Justice Secretary will shortly provide details of the prison reform programme in the other place. This will build on her previous commitment to invest £14 million to provide more than 400 extra staff in 10 prisons and the £10 million of new funding that is giving governors the ability to improve safety in their establishments.
Lord Harris of Haringey (Lab)
My Lords, I am sure we are all delighted to hear of the extra staff who will go into prisons but does the Minister not accept that you would have to have four times the number quoted in today’s newspapers and on the radio simply to achieve the same prisoner to staff ratio that existed in 2010? No doubt he will be aware of the inquest, which concluded yesterday, into the death of Levi Cronin at Her Majesty’s Prison Highpoint. He was a 26 year-old who was sentenced for bike theft and then killed himself. The inquest jury found a,
“series of interconnected system inadequacies and failures”,
including insufficient recording of information, insufficient communication, inadequate staffing levels, and inadequate support and supervision. Exactly how does the Minister think it will be possible to deliver the sort of personalised care and support that are necessary in the absence of better staffing levels, which the announcement today does not seem likely to deliver?
Lord Keen of Elie
My Lords, it is not appropriate to draw an immediate comparison with staffing levels in 2010. Since 2010 a number of prison establishments have been closed down, leading to a reduction in the number of staff. In addition, we have introduced a benchmark standard—which the noble Lord, Lord Harris, referred to in his own report—to address the question of staff. It is a matter not just of staff numbers but of recruitment and retention. There are wider issues that have to be addressed in that context.
Of course, prisoner care is paramount in our consideration. Indeed, in 2015 the National Offender Management Service reviewed the assessment, care in custody and teamwork case management system. It made 20 recommendations, which will be fully implemented by March 2017. In addition, we intend to give every prisoner a dedicated officer who can engage with them on a one-to-one basis.
Lord Alton of Liverpool (CB)
My Lords, can the Minister tell the House how many self-inflicted deaths there have been in Her Majesty’s prisons over the past 12 months? Has he had a chance to look at the Howard League’s recent report on this and can he tell the House the estimated cost—beyond the human cost—of every self-inflicted death that occurs in prison?
Lord Keen of Elie
In the 12 months to September 2016 there were 107 self-inflicted deaths. The cost is of human life; it is not measured in pounds, shillings and pence. Every one of those deaths is the subject of investigation, not only by the ombudsman but by an inquest.
Lord Marks of Henley-on-Thames (LD)
My Lords, some 70% of prisoners who commit suicide have serious mental health conditions. Many should have been in secure hospitals. The ombudsman’s recent report on prisoner mental health highlighted the shortage of secure hospital places, lengthy waiting times and the incidence of avoidable suicides while prisoners awaited transfer. Will the Government increase the number of secure hospital places and improve the arrangements for the speedy transfer of prisoners who need them?
Lord Keen of Elie
My Lords, a key aspect of our prison reform programme will be to address offender mental health and improve outcomes for prisoners. That is why we are investing £1.3 billion to modernise the prison estate.
Lord Beecham (Lab)
My Lords, last week the Justice Secretary proudly proclaimed her intention to appoint another 400 prison officers; today, she says that an additional 2,100 will be recruited. But the service has lost 7,000 officers since 2010, which is 28% of a workforce for whom the sickness rate is 25% higher than the labour market average. When will the Government recognise that prisoner numbers—the highest in Europe except for Hungary, Slovakia and the Czech Republic—are the real problem and adopt a cross-government strategy to reduce the prison population, not least by tackling the mental health problems which afflict 70% of those given custodial sentences?
Lord Keen of Elie
The noble Lord is right to highlight the fact that mental health is a very material issue so far as prison populations are concerned. As I indicated earlier, it is one that we are addressing but it is not just increased staffing levels that will deliver improvements. How prison officers are deployed and the training and support they receive are equally important elements for any workforce strategy.
Baroness Meacher (CB)
My Lords, I welcome the Government’s decision to reduce some of the cuts that have already been made to the prison budget. The Minister will be aware, as has been alluded to, that the vast majority of very vulnerable prisoners are those with mental health problems. In fact virtually none of those people, who mainly suffer from anxiety and depression, gets effective treatment. Last month the medicines regulator, the MHRA, declared that products with CBD in them—one of the key elements of cannabis—are effective medicines. The word “medicines” is crucial. Will the Minister ask his officials to look at the evidence of the efficacy of CBD on anxiety and other mental health disorders? Will he then meet me to discuss a possible way forward?
Lord Keen of Elie
I am not in a position to comment on the efficacy of CBDs in this context but one has to address the much wider issue of mental health, and the drug abuse which is connected to it in prisons. I will ask my officials to consider the matter raised by the noble Baroness and once I have that advice, I would be happy to write to her.
Business of the House
(8 years, 1 month ago)
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Baroness Evans of Bowes Park
To move that the debate on the motion in the name of Lord Soley set down for today shall be limited to 3½ hours and that in the name of Lord Griffiths of Burry Port to 1½ hours.
Examiners of Petitions for Private Bills
The Senior Deputy Speaker
That, in accordance with Private Business Standing Order 69 (Appointment of Examiners of Petitions for Private Bills), Mr Colin Lee be appointed an Examiner of Petitions for Private Bills in place of Mr Matthew Hamlyn.
Brexit: Impact on Universities and Scientific Research
(8 years, 1 month ago)
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Lord Soley
That this House takes note of the potential impact of the United Kingdom’s withdrawal from the European Union on funding for universities and scientific research.
Lord Soley (Lab)
My Lords, in moving this Motion let me say that I fully respect the decision of the court today and the Government’s position. I know that it is not a matter for debate today but some of the things that I will say will indicate that Parliament can have a helpful role in the difficult negotiations and discussions to follow. Whether the Government decide to appeal is a matter for them. I say simply that Parliament has a duty to hold the Government to account, but also to offer its help, advice and guidance on some of the very complex issues that will appear during these discussions. Let me say straightaway that the issues affecting universities, and scientific research and development, are a very good example of that.
Not only has there been enormous interest in this Motion from Members of this House, many of whom will speak today with far more knowledge and experience than I have, particularly of the university world, it is also true that the number of organisations outside—throughout the United Kingdom—that have contacted me about this debate is quite remarkable. I have had letters, emails and contact from all over the country expressing concern. I already indicated in my first Question today that my concern is that the United Kingdom and the European Union need a good and productive relationship in the future. It is of no benefit to the EU or to the UK if we simply see this as a game of winners and losers. There has to be a new relationship between the United Kingdom and the European Union, and scientific research and development will be a critical part of that.
I do not need to tell this House, particularly with the number of scientists in it, that science and technology and universities are critical to the development and success of any modern economy. Indeed, higher education in Britain and our scientific research are big success stories for the United Kingdom and must continue. There is now genuine concern in scientific research and universities about what will happen during the process of Brexit and if we withdraw, which seems almost certain. Somehow or other, we must have a structure that makes sure that this country does not slip back in its significant achievements in research and higher education.
Two core issues have troubled people who have contacted me. They boil down to, first, acute concern about the movement of students and staff inside in scientific research. Scientific research is now international, and within the European Union it is transnational. We have to recognise that. It is not focused in just one country. It is very much interdependent. Some of that work, which I hope to indicate in a moment, is profoundly important to everyone, everywhere. It is not just a matter for scientists and researchers in universities. It will affect everybody’s life in every way.
The second issue causing acute concern is funding. It is not just whether funding will continue at the current level or, as we hope, increase; it is also about predictability during the negotiation process. It is no help to anyone if people who are making bids for research money to European institutions, most notably the Horizon 2020 programme and the European Research Council, cannot be sure what will happen to their application in the coming months and years.
To put those concerns in context, I shall quote the Russell group of universities, which sums up the concern quite clearly. I think the Government have to focus on what it says. It wants the Government to ensure that:
“UK universities can continue to recruit and retain talented staff and students from across the EU and more widely without bureaucratic visa burdens”.
That is important, and I shall come back to it later. Its second point is about:
“Ensuring the UK can continue to have full access to and influence over Horizon 2020 and further EU research and innovation programmes and infrastructures”.
I would include the European Research Council in that. Its third point is about:
“Ensuring the UK can continue to participate in the Erasmus+ programme”.
All three of those issues have been reflected by many other organisations and individuals who have contacted me.
It may help if I give some examples of the sort of research that matters to everyone in this country. I turn first to astrophysics, space science and geophysics. They are by nature international operations involving countries all around the globe, but they are also profoundly important within the European Union, and there is funding within the European Union. Something that perhaps puts meat on the bones of this sort of research and shows people inside and outside this House how important it is the FLARECAST programme. As its name implies, it tries to forecast solar flares. Solar flares are increasingly important because as we rely more and more on high technology, a serious outbreak of solar flares can massively disrupt electronic communications and the power distribution network. That affects everyone in this country, in the European Union and around the world. That work is currently funded massively by the Horizon 2020 programme. That is one of my first examples of how important it is that we manage to keep the Horizon 2020 programme going and that we are fully part of it.
Another example of that the Tyndall Centre for Climate Change Research in East Anglia, which has an international reputation and is virtually entirely funded by the European Union. This is where Parliament can be very helpful to the Government, as we need to keep bringing issues of this type up, not in order to score points but simply to say we cannot allow a situation to develop where such organisations lose their funding and it is not replaced in some way. I will come back to this, but ideally we would have a situation where the funding continues more or less as it is. If we do not achieve that in the negotiations, then the British Government will have to find the money for that sort of work.
Immunology is profoundly important to the health and disease problems that we face—again throughout the world, as obviously they are not unique to the United Kingdom. Some €8.8 billion has been paid in the six years between 2007 and 2013 by the European Union. That is a very large sum of money, and either we find a way of that continuing or we have to replace it in some way. The amount of money we get in research grants for immunology from the European Union is second only to that achieved by Germany. Both Britain and Germany are leaders in that work and, again, the issue is of course international and not just transnational—it is certainly not just about the UK.
The European Investment Bank only a few months ago gave a loan of £280 million to University College London, and a few months prior to that gave £200 million to Edinburgh University. The funds were designed to enable those two universities to develop infrastructure projects, which have an immensely important spin-off into the development, creation and progress of small creative businesses. I cannot stress that enough, as we tend to understate what we do in manufacturing in this county. Some of our manufacturing is very advanced and very lightweight, and our exports depend on it massively. This is not a plug for Heathrow Airport, but every plane that goes out is stuffed full of exports of very high-tech equipment. It is worth remembering at this time that there is hardly a satellite whizzing round the world that does not have British technology in it. That is profoundly important. I would like to know how the Government think those investment programmes will continue. Ideally, we will solve this in the negotiating process, but if not we need to find a way of funding them.
Oxford University gets 12% of its total research budget from the European Union. There are six pan-European infrastructure projects located in the United Kingdom, and two of them—one at Harwell run by Oxford University on laser energy and the other on biology at Oxford University—are profoundly important. Can the Minister look at how we will continue to develop them if we are no longer part of the European Union? They are part of this pan-European project. As I say, there are six of them in this country, and they would need to continue as well if we want to maintain our scientific lead.
It would be quite useful again to have the Minister’s views on one way of addressing this, which would be to recognise that coming out of the European Union does not necessarily mean that we have to leave the European Economic Area. The European Economic Area may, or could, to some extent mitigate the funding crisis that will hit some of these organisations if we are not careful. It is not a complete answer by any means but it would mean, as I understand it, that we could continue to have access to funds from both Horizon 2020 and the European Research Council. I am sure the Minister is aware that it is possible to have associate relationships with these organisations, in the way that Israel and Switzerland do. There are other possibilities here, but there is no doubt in my mind that the first priority should be that the funding continues more or less as it is, not least because of the predictability of it. That predictability is profoundly important.
The Prime Minister says that we are a full member of the European Union until such time as we leave, and therefore such things should not change. I understand that, and legally it is correct, but in reality, people in other European Union countries are looking at the relationship they have with Britain in scientific research and universities and asking how Brexit will affect it.
I am told—again, I should like to know whether the Minister is aware of this and can tell us any more about it—that people are already reluctant to place Britain as a lead programme developer when applying for funds, because they cannot be sure that they will not lose out if Brexit goes badly wrong and we end up coming out of the European Union without a proper agreement on the continuation of science and technology research.
Many people in this Chamber have far more knowledge of universities than I do, and I do not doubt that they will speak about them both individually and in terms of funding of students and student exchanges. I just flag up that I regard that as particularly important, and look forward to hearing from some of my more knowledgeable and expert friends on it.
We must be aware that this is not just a funding issue. The other group whose evidence impressed me was the Association of the British Pharmaceutical Industry. It wants predictability on regulation. Obviously, drug production requires regulation across the European Union; again, it is transnational. It is no good our having a different set of regulations from Germany, France, Italy or elsewhere, so somehow we have to agree a system of regulating standards so we do not get bogged down in additional bureaucratic discussion on each individual drug that is produced. My memory is that 25% of the world’s leading prescription drugs were discovered and developed in the United Kingdom. That is immensely important. It would not be good to get bogged down in regulatory discussion.
The House of Lords Library points out that we have received £5.6 billion per annum from the European Union for recent scientific research and development, and that 2.5% of UK university income came from the EU in 2014-15.
I finish on this point because I want to leave as much time for others as possible. I say to the Minister that Parliament can be helpful on this. We need to make sure that universities, higher education and research and development are carried forward successfully, but we rely an awful lot on what happens in the negotiations. To go right back to what I said at the beginning, that means that we need a good relationship with the European Union where both sides recognise that predictability in funding and the ability of staff and students to move around internationally and transnationally are vital. I beg to move.
Lord Willetts (Con)
I congratulate the noble Lord, Lord Soley, on bringing this debate to the House and posing the crucial questions he has. I draw the House’s attention to my entries in the register of interests, particularly my post as a visiting professor at King’s College London and serving on the board of the Crick Institute.
I shall keep my remarks short because so many Members of this House wish to speak. In many ways, that is my central point: there is a range of concerns in the university and science community about Brexit, and we need some structure or framework in which they can be considered explicitly by the Government, the different arguments can be weighted and we can have an indication of how they could be addressed as part of the negotiations on Brexit. There is a range of exercises in learned societies, in individual universities and their representative groups, but I press on the Minister the need for some kind of framework and explicit consultation by the Government.
The Government have already made some very welcome announcements. I welcome in particular that the Minister for Universities and Science has announced a continuation of funding for schemes that have already been successful in the EU and the extension of continuing funding of students from the EU at British universities. But the Government need to go further.
A crucial issue that needs to be addressed is what kind of relationship we might have in future with Horizon 2020. I rather regret that the way that the debate went in the referendum focused so much on funding and not very much on networks, which are as important as the funding, if not more so. Maintaining those networks is crucial and there are several ways in which it could be done. We could continue to participate in Horizon 2020; other countries do so that are not members of the European Union, so that would be one option. I think I have picked up some concerns among Ministers that Horizon 2020 is cumbersome and has high overhead costs. On the other hand, those costs may arise simply because it is creating partnerships between institutions in more than one country, which is an inherently more complicated activity. Those pros and cons should be explicitly identified.
Another option would be for Britain to set up a parallel fund to enable universities and research institutes in our country to be funded by the UK Government if they wanted to align themselves with the Horizon 2020 programme. Another option, which I know is being considered in some places, is for universities and research institutes in the UK to set up a new operation within the EU which would be—they hope—still eligible to receive EU funding. The relative pros and cons of those options and the frameworks for them are exactly the kind of thing on which a consultation exercise led by the Government could provide very useful guidance and advice.
The noble Lord, Lord Soley, also referred quite rightly to student mobility. Of course, that means attracting students—and young people in general—into Britain. There is an ingenious visa regime for young people aged under 31 from certain, specified countries to come and work in Britain for up to two years. We currently apply it to nationals from Australia and New Zealand, for example. Could we make that offer to nationals from many EU countries as a very powerful signal—and a practical offer on visas—that showed that they would still be welcome here? Equally important is that we continue to make it possible for British students to go and study abroad. In fact, we would gain if more British students had the opportunity to study abroad. Another idea to consider, therefore, would be that fee loans—currently available only for study at a British university—could be made available to cover the costs of studying abroad at universities in specified countries, which could of course include member states of the European Union. These kinds of ideas need to be properly investigated and I hope that the Government will do so.
There are of course enormous challenges for universities and research institutions from Brexit; there are also opportunities. Many universities that I have visited, and it is also the experience of the Crick Institute, would love to have a commercialisation unit alongside their research lab, but have been told that if they did so the VAT exemption on the building of their new facility would be lost and the whole facility would pay VAT at 20%. The ad hoc rule of thumb is that they should therefore have only 5% of commercial activity. It would be a powerful boost to the sector at a time of such anxiety if the Treasury signalled that this is exactly the kind of tax rule that could change if we left the EU and that, in future, there would not be a VAT liability if our publicly funded institutes and universities created places for commercialisation on a much larger scale.
There are widespread concerns and I am sure that they will expressed in the course of our debate today. I very much hope that, in a systematic and considered way, the Government will set up a framework in which they can be addressed.
Baroness Blackstone (Lab)
My Lords, I declare an interest as I chair the board of Great Ormond Street Hospital, which undertakes a great deal of research.
One of the strengths of the UK is its universities. We have a world-class system of higher education which is admired around the world. The high status of our system is something we must preserve. The decision to leave the EU is a potential threat to this. There may be some opportunities, as the noble Lord, Lord Willetts, has just said, but there are many threats as well. One of the benefits of our membership is the opportunity to attract students from the European Union. There are currently 185,000 studying here. This has been possible for them through access to fee loans. Will the same guarantee of access given to students coming here from Europe in 2017-18 be given to those coming here in 2018-19? Will the Minister tell the House what will happen after that? The loss of these students would damage the rich and diverse population in UK universities.
European Union nationals account for about 16% of the academic workforce here. Incidentally, the figure is much higher in some important subjects—for example, mathematics and economics. What reassurances will be given to them? Will they continue to come if there are complex bureaucratic hurdles to contend with? They are at present attracted by the values of openness to the wider world and the quality of research in our universities, to which many of them make an enormous contribution. What assurances can the Minister give that academic mobility—not just student mobility—from Europe will not be impeded after our exit?
Almost half of UK academic papers are written in collaboration with at least one international partner, many from the European Union, and international co-authorship is associated with 41% more impact. The UK is easily the largest beneficiary of EU Research Council funding, obtaining 22% of its grants. This underlines our success in research. As Jo Johnson, the Minister responsible for this area, said earlier this year:
“Britain’s success as a science powerhouse hinges on our ability to collaborate with the best minds from across Europe and the world”.
He was right; it does. Therefore, will the Minister tell us not just that the Government will work to protect the UK’s position for the duration of Horizon 2020? Universities are desperately concerned about the longer-term future beyond Horizon 2020. They expect a response, and they should get one. Given how much money comes into the UK for research, it deserves high priority in any exit negotiations, which need to consider how we can go on having high-level strategic influence as well as funding.
As regards medical research, issues of scope and scale are particularly important. High-quality medical research is vital to innovation in the treatment of patients, in both discovering cures and making sure that their symptoms are alleviated so that they have a better quality of life. Limiting the scope of this research would damage patients, so access to EU funding in this area is not just about money, but about the facilitation of networks, as I think the noble Lord, Lord Willetts, also mentioned, and access to pan-European populations. This is especially true with rare diseases, 75% of which affect children, and 30% of children with a rare disease will die before their fifth birthday. To save the lives of these children it is vital to have collaborative projects which expand the population size from which patients can be drawn across Europe for the clinical trials which are needed. At Great Ormond Street Hospital and the Institute of Child Health of University College London, where, incidentally, 25% of the medical staff are from the European Union, there are currently 44 EU-funded research trials. What do the Government plan to do in the longer term—I stress the longer term—to ensure that these cross-European trials can continue?
With more time I could cite many examples where this research is now benefiting children with rare complex conditions. Surely we owe it to them to ensure that this continues.
Baroness Smith of Newnham (LD)
My Lords, funding is clearly crucial for higher education institutions. I am grateful to the noble Lord, Lord Soley, for bringing this debate this afternoon. Like many other speakers, I declare an interest, or even interests. I had noted two, and then the noble Lord, Lord Willetts, caused me to think of a third one.
My interests on this occasion are directly relevant to what I will talk about in the few minutes available. The first is that I am employed by the University of Cambridge, which benefits significantly from membership of the European Union and access to funding from Horizon 2020 and associated programmes. Secondly, while my own Department of Politics and International Studies does not apply to so many programmes, the European centre that I direct has had funding from the European Union to create collaborative networks. I am now the third speaker to talk about networks, and a hugely important theme is that we are talking not just about funding—networks are important, people are important, collaboration is important—so, if we look merely at the financial aspects of research funding, we miss an important part of what Her Majesty’s Government need to think about in negotiating the UK’s withdrawal from the European Union. My third interest is as a member of the advisory board of the Institute for European Studies at the Free University in Brussels, the ULB. I mention that because, when I was asked to be on that advisory board, I stopped to think, “Do I have time to do it?” and “Do I want to do it?”, but I did not think, “Will it be difficult for me to get to Brussels? Will I have to fill in bits of paper and get visas to travel?”. I can see the noble Viscount, Lord Ridley, shaking his head, but there are key issues to think about that go beyond funding, which relate back to how the United Kingdom will play out its role in collaborative research in the future.
Funding is part of that, and the Government have already been clear that they are willing to support funding that would be lost under Horizon 2020 and replace it up to 2020. However, as the noble Baroness, Lady Blackstone, already suggested, “up to 2020” does not give much certainty at all. Applications are going in now where, anecdotally, we are told again and again that British people or people who are based in UK universities are being discouraged from being the lead applicants for EU funding. That needs to be thought about. Will the United Kingdom seek to be part of the European research area, and ideally part of Erasmus, once we leave the European Union? Can the Government commit to saving the best opportunities and closest co-operation for the United Kingdom by being part of the European research area post Brexit?
At the moment, the United Kingdom benefits from having significant numbers of EEA nationals as students and academic staff. At the moment, 20% of Cambridge’s post-doctoral fellows come from other EU and EEA countries. But there is no certainty for these people. At present, we have no idea what the Government propose on visas and free movement. If the Government do not propose to be part of the European Economic Area or something similar, can the Minister indicate what sort of arrangements they are looking for that will enable EU nationals to have confidence about coming to take up jobs in the United Kingdom? The link back to funding is that, at present, the United Kingdom receives more funding from the EU than any other member state, and a significant number of the ERC grants go to EU nationals resident in the United Kingdom. If the United Kingdom is outside of those networks, the pull factor for leading European scientists disappears. Those people need certainty. If the United Kingdom is to remain world-leading, it needs to demonstrate that it is open for business. Maybe the plan is to have a visa-free regime for free movement of academics or maybe the plan is to expand tier 2 visas, but at present we have no idea.
While I understand that the Minister is not going to give a running commentary, can he at least give some assurance that the Government are thinking about these questions and that the UK is open for global business, including in higher education and research?
Lord Kakkar (CB)
My Lords, I too join in congratulating the noble Lord, Lord Soley, on having secured this important debate. I declare my interests as professor of surgery at University College London, director of the Thrombosis Research Institute in London and chairman of UCL Partners.
World-class science research and innovation is a global success story for our country. With 1% of the global population and 3% of expenditure in research and development, we are able to deliver 15% of the most highly cited publications globally. This is vitally important not only for the health and wealth of society but for investment in research and innovation, which is a remarkably effective lever in driving economic growth and opportunity for our population.
As we have heard in this debate, there is no doubt that there is concern about the implications of our country leaving the European Union. In terms of research funding, we have heard about the disproportionate success that our universities have had to date in securing funding—some 10% of research funding at our universities comes from the European Union. However, we have a unique ecosystem in our country beyond the funding from the EU, and at this time it is therefore important for the national debate to focus on what we need to do to secure those remarkable achievements in science, research and innovation well into the future.
One thing that we have heard about is the development of an industrial strategy. I should like to ask Her Majesty’s Government what approach has been taken in terms of development of a strategy for the future funding of our science base at universities for innovation and research. There is no doubt that the opportunities alluded to for research funding from the European Union need to be considered carefully. They represent an important part of the ability of our universities to remain globally competitive. Therefore, Her Majesty’s Government will need to consider carefully how that research funding is replaced not only in terms of the quantum of funding available but, as we have heard, by ensuring that the funding, when it becomes available at a national level, is directed to allow our great institutions and successful research community to interact with the kind of collaborative networks globally with which they are currently able to interact through participation in European schemes.
In that regard, have Her Majesty’s Government given thought to the development of new funding streams that might target particularly the ability of our institutions and home collaborative networks to continue to collaborate in the European Union? As we have heard, those will be vitally important, particularly in areas of medical research such as rare diseases, as well as in opening up the opportunity for us to collaborate beyond Europe with networks in the United States, Asia and among other Commonwealth countries, where there will be the opportunity for enhanced research collaboration. This does not take away from the need for us to remain active participants in European networks and, in certain circumstances, in the funding streams that will provide great opportunity to our universities.
There is also an important opportunity at this stage to consider the overall funding available for research and innovation in our country. Although in the austerity years—with the support of European Union funding—our universities were able to remain competitive on a global scale, the reality is that in terms of OECD member investment in research and innovation we are at the bottom of the league. That is an unsatisfactory situation for a nation that prides itself on being a knowledge economy and committing itself to a future in which innovation will drive social advancement, improvement in the lives of our citizens and opportunities for our economy. As part of the industrial strategy, have Her Majesty’s Government considered increasing the overall funding available for science and research in our country to bring it at least to the average level of OECD member country investment in this area? Clearly, we would still not be investing as much as some of our competitors, such as Germany and the United States, but we would strengthen the overall base and send a very powerful message to the rest of the world that science and innovation remain at the heart of the purpose of our country.
In that regard, what attempts have Her Majesty’s Government made to work with our learned societies and national academies to see how they might contribute to this process, inform this discussion and ensure that the very best environment is created in the future to secure the science and research base in our country?
The Lord Bishop of Portsmouth
My Lords, the range of risks faced by the HE sector covers student recruitment, staff recruitment, research funding and course portfolios, as we have already heard. The potential impact—positive from some perspectives, albeit limited and very provisional at this stage, and the range of likely negative impacts—varies between universities.
My background covers different sorts of universities: Hertfordshire and Portsmouth, Oxford and Cambridge, and Durham and Manchester. I studied in three, taught economics in two, was a chaplain in another and have been a governor in two. I draw your Lordships’ attention to my entries in the register of interests.
In such very varied universities, the present excruciating uncertainty following the Brexit vote is having a significant impact in a range of areas. The risks around recruiting future staff are hard to gauge accurately but it must be expected that it will become more difficult to recruit EU staff. Across the sector, 10.7% of academic staff are EU nationals, with a focus on research staff. They are much more likely to be on fixed-term rather than permanent contracts, so there will be an ongoing need for recruitment in what are now very uncertain, and likely to be changed, circumstances. It would be enormously helpful if the Minister and the Government could be more precise about the freedom of movement for all categories of workers that will be available post-Brexit.
A different problem will arise if, as is sometimes rumoured, the UK Government make recruiting all international staff more difficult. This issue is immediate and particularly pressing because, although no changes to EU staff recruitment can, as I understand it, be made until the UK leaves the EU, changes to UK visa rules can be made with immediate effect. Can the Minister say what is intended?
Our universities are attractive for many reasons. The sector has a high world reputation—we might call it a golden reputation—and I fear that the intention of ranking UK universities as meeting gold, silver or bronze standard in the future risks diluting the prized brand in a period when our international reputation is inevitably under scrutiny. I hope that the Minister and the Government can consider ways to enhance the position of the sector rather than use language and terms that might diminish our international reputation.
As I acknowledge the strength of the various financial risks already identified, I draw the House’s attention to the importance to this nation and society of the openness of our hearts and minds to what is new, different and challenging. The world of learning depends not only on accessibility to ideas and thinking but, as we have already heard, on the people of the world meeting each other, learning together, and sharing their exploration and their understanding. It is that which we must ensure we continue. Insularity in our approach, perceived or actual, will relegate us in the perspective of the world and risk not only the financial stability of our outstanding universities but their educational standards too, to the detriment of the nation.
At Portsmouth, where I am presently a governor, of those who teach or research in the Institute of Cosmology and Gravitation, which is research intensive, one-third are British and two-thirds are non-British, of whom 45% are from the EU. Is it intended that cutting-edge research such as this will be imperilled? Only yesterday, the astronaut Major Tim Peake, who studied flight dynamics and evaluation at the university, visited for a conference of schoolchildren, widening the scope of those children’s thinking. The risks are clear: uncertainty is debilitating. Economically, educationally, culturally and ethically, universities are pivotal.
Lord Giddens (Lab)
My Lords, I congratulate my noble friend Lord Soley on securing this debate and introducing it so ably. I cannot measure up to the list of interests that the right reverend Prelate declared, but I declare an interest as former director of the London School of Economics and formerly a professor in Cambridge for quite a few years.
The issues facing universities are extraordinarily complex. They show in one particular institutional setting the scale of the task the country has taken on following the referendum. So far there is no Brexit, simply a decision to leave the European Union. If the Government have a plan, only they know what it is. The wider economic implications at this point are, therefore, to my mind imponderable.
My first main point is that those responsible for running our universities must engage in scenario thinking that runs well beyond higher education. For better or worse—and in my eyes it is certainly worse—this Government have decided to turn universities into commercial organisations, driven by consumer choice. They will be as vulnerable to a downturn in the economy as any other form of business enterprise.
Moreover, from this juncture onwards there will not be a stable external environment against which universities will operate within the wider framework of the EU. The other member states, and those who run their universities, will be taking reactive decisions well before any concrete deal is reached between Britain and the rest of the European Union. This includes students and potential students, researchers and other staff, as well as those actually in charge of higher education institutions. The Government can try to give guarantees and smooth out anxieties, but everyone can see that those guarantees will be vulnerable should there be a wider deterioration in the UK’s economic situation. What appears to be the Government’s position—that nothing will change up to the point at which the UK actually leaves the EU—seems to me naive in the extreme.
All of this will take place against the backdrop of the higher education Bill, due to come before the Lords shortly. It loads up universities with a tangle of new bureaucratic rules, supposedly in the interests of improving teaching standards, and introduces a further set of uncertainties to join the much more wide-ranging ones created by Brexit. This clumsy Bill is the last thing universities need at the moment and, when the time comes, I hope that other noble Lords will join me in opposing large chunks of it.
The Government can and are seeking to introduce at least some guarantees that existing structures will remain in place for the time being. However, they cannot control what overseas Governments and institutions think, and they will be proactive. Research reported by Times Higher Education indicates that there are already visible consequences. Researchers spoken to indicated that applications to Horizon 2020 for funding had already been thrown into doubt, as continental colleagues worried about the impact of including British researchers in their project applications.
The response that it will be business as usual until the UK actually leaves the EU will not do, for the reasons I have already stressed. Both the Government and university leaders will have to think more imaginatively to blunt the reputational effects of impending Brexit, as well as the real losses in student recruitment and research capacity likely to take place. Of course, there is always the banal response that the UK will open itself up to the wider world as it turns away from the rest of the EU. But proximity is often important in research collaboration, and so is an established and regularly funded way of stimulating and backing research projects.
At this point, we just do not know what kind of deal the UK will be able to do with the 27 other EU nations. There is a huge difference between staying in the single market, which is surely impossible if EU migration is to be curtailed, and opting for a limited trade deal. In the second case, the UK will definitely be an outsider in Europe, peering in. Universities may have become like businesses, but they cannot react with the speed that orthodox companies do to changing economic fortunes. Beyond limited financial guarantees, how will the Government help universities to plan ahead?
I agree very much with what the noble Lord, Lord Willetts, said. Some structure must be in place—not a temporary consultation, but an enduring structure linking government with universities to plan ahead in a macro context, not just the context of the university system itself.
Lord Hannay of Chiswick (CB)
My Lords, our debate today covers two sectors of our national life that are critical for our future success, competitivity and prosperity as a nation. Our universities, second only in the world to those in the US in their international outreach, are one of the country’s top invisible exporters. At the same time, they are an important source of our soft power. Our scientific research, despite the fact that it is less well funded from the public purse than is the case for most of our competitors around the world, has, by the disproportionately high wins of EU research funding, shown that it is in rude health. One might think that the potential negative impact of Brexit on these sectors would be of deep concern to the Government. There is not much sign of that, however. The CEO of Nissan can get in to see the Prime Minister and emerge with so-far unmentionable assurances, but the presidents of the Royal Society, the British Academy and Universities UK are not being so treated in spite of their very serious concerns, so all the more credit to the noble Lord, Lord Soley, for having initiated this debate.
What are those negative implications? First and foremost are ones that come from the talk of imposing new immigration controls. These could adversely affect the recruitment by universities of both undergraduates and postgraduates and of the 15% or so of their academic staff who come from other EU countries. If the controls were reciprocal, that could affect British students and academics moving in the opposite direction. This House has frequently debated the aberrant nature of the Government’s policy of treating students as economic migrants for public policy purposes. That has zero support in this House from any side. It will emerge yet again now in the context of this new threat from Brexit, and it is surely time to rid ourselves of this incubus, which is already resulting in a loss of market share for British universities when compared with their main competitors. We need the Government to say here and now that any new immigration controls they may contemplate will not prevent those with offers of an undergraduate or postgraduate place, or of an academic post, taking up those offers. If they cannot say that now, the haemorrhage of students and academics who have to think in terms of longer time horizons—and it has clearly started—will only accelerate, depriving our universities of material and human resources of the greatest importance to their future well-being.
Then there is the question of the impact of Brexit on the resources available for scientific research both at our universities and more widely. Our position as a substantial net beneficiary of EU spending means that this risk is acute. It is not just a question of the quantum of resources, which may or may not be replaced by a pretty cash-strapped Treasury, it is also about the value of the networks of co-operation across Europe that are provided by EU funding and which bring with them quantifiably greater benefits than the simple amount of the subsidy. All this will be at risk if we pull out of the single market or we regard any payment into EU funding as a red line we will not cross. Surely we need to remain in the Horizon 2020 programme and the programmes that will follow it if we are not to damage our own capacity for scientific research and innovation.
The House is fairly inured to getting no meaningful response from the Government in reply to debates and questions about Brexit, and I fear that today’s experience may not differ very much. It is a little like posting messages to Father Christmas up the chimney. Fortunately, on this occasion and in respect of these two cases, we shall have the opportunity to return to the issues being raised in today’s debate when the Government’s Higher Education and Research Bill reaches this House shortly. That will provide both the opportunity and the need for the Government to respond in substance to them, and it will also provide the opportunity for those of us who are deeply concerned by this situation to consider moving amendments.
Viscount Ridley (Con)
My Lords, the nearest I have to declare as an interest is that my wife is a professor of neuroscience at Newcastle University and in receipt of EU funding, but the views expressed today are my own. I think that I am the first member of the Lords Science and Technology Select Committee to speak in the debate so far. I commend the report into these matters produced under the able chairmanship of my noble friend Lord Selborne. It contains a huge amount of interesting detail.
In his opening remarks the noble Lord, Lord Soley, said that we must not slip back in terms of being a scientific superstar. Indeed, we must go further than that and leap forward. This has to be an opportunity as well as a risk. He said that the UK is a leading scientific nation and he is quite right. In per capita terms we have twice as many universities in the world top 200 as the US and Germany. We were awarded five Nobel prizes this year, more than anyone else. Admittedly all of the winners are living in America, but that rather makes the point that science is a global activity and not a regional one. If you go into a science lab today, you are likely to find a group of people as diverse as in the changing room of a Premier League team, and probably more so.
I want to concentrate my remarks on three issues: the questions of talent, of finance and of regulation. It is vital that universities should be able to attract talent from around the world. In this respect it is key that the Government should recognise and say explicitly that there is a very big difference between public opinion about skilled migration and unskilled migration. At the moment I do not think that they have made that distinction clear enough. The polling evidence is very clear. The public actually approve of scientists, engineers, entrepreneurs and doctors and so on coming into the country just as strongly as they disapprove of less skilled migration. At this quite early stage there is nothing to stop the Government from publishing plans about what kind of expedited talent visas they would make available to people all around the world to come here. The noble Baroness, Lady Smith of Newnham, made this point, as did the noble Lord, Lord Hannay of Chiswick, and I agree with them.
South Africa, for example, has a critical skills programme which automatically fast-tracks people who come from the 500 top institutions in the world. I do not know whether that is the right way of doing it, but it is at least the kind of thing we need to be talking about, because this is a golden opportunity to relax high-skilled migration barriers and to discriminate on the basis of talent rather than nationality, which is surely what we should be doing.
On finance, Horizon 2020 has been mentioned on a number of occasions. I would correct something that the noble Lord, Lord Soley, said: we do not have to be in the EEA to be a member of Horizon 2020. Fifteen countries are members of Horizon 2020 that are not in the European Union. Two of them, Tunisia and Israel, are not even in Europe. There are others if you count the Caucasus; I do not know whether that counts as the continent of Europe. The point is, although they are so-called associate members, the press release that announces their joining this programme says that they will be on exactly the same terms as members of the European Union. Indeed, the country with the most project co-ordinators per capita leading projects in Horizon 2020 is not an EU country—it is Iceland. There should be no bar to us participating fully in Horizon 2020, as long as we contribute. Universities need to do a better job reassuring their employees about this.
On regulation, as the noble Lord, Lord Kakkar, said, we are underfunding science and research in this country, but that is largely because private, rather than public, funding is lower in this country. In that respect, the degree to which European regulation, such as the clinical trials directive, which the noble Baroness, Lady Blackstone, mentioned, has held back sectors such as biotechnology in particular is really quite striking. The regius professor of medicine at Oxford, Sir John Bell, has gone on record making this very clear. There has been application of the precautionary principle in the Commission and the Parliament of the European Union that goes much further than elsewhere in the world, which has meant that we have, in effect, held innovation to a higher standard than existing technologies. Indeed, we have emphasised the risks of innovation more than the benefits.
There are huge technological opportunities for universities and research in the world, in particular online with international campuses and things like that. We must grasp opportunities to explore these possibilities in a post-Brexit world.
Lord Liddle (Lab)
My Lords, I declare my interest as pro-chancellor of Lancaster University. I am very proud of Lancaster, which is in the top 10 of the league tables. I am proud of its success in having a very high proportion of students from state schools, despite being a very strong, research-intensive institution, and of the contribution it makes to the north of England economically. We all accept we have a real regional problem in Britain. We have to have rebalancing. The universities in the north are one of the really positive things about the economy of the north at present.
The first consequence of Brexit for my institution is that we were expecting to get a grant of £12 million this summer to contribute to a health innovation campus we are building next to the university. The first phase is worth £40 million. We were told that this application would be delayed because of Brexit. We now have to put in the application at the end of the year. There is a possibility of a decision some time next year. The fact is that there is already delay and uncertainty. The Treasury sounds, in the way it is asking questions about these projects, as though it really sees the structural funds as a source of economy in the future, which would hit universities in the north very hard. Will the Minister tell us something about that? What is the Government’s commitment on structural funds and universities?
On student recruitment, we have expanded as a result of rapid internationalisation. Our proportion of EU students has gone up from 7% to 10% in the past five years, and of non-EU undergraduates from 11% to 20% of the total student body. The early indications are that the number of international applications is falling this year as a result of Brexit. This is in part an income question. EU students represent an income of some £10 million a year. What is the Government’s position on continued access for EU students to the student loan scheme? For how long will it continue? More than that, it is about immigration and the Government’s attitude to it, about which the noble Viscount, Lord Ridley, spoke.
When the question of overseas students was debated in the last Parliament, there were voices in the Government, not least those of the noble Lord, Lord Willetts, the Chancellor of the Exchequer and Vince Cable, which were strong in backing overseas student immigration. Of course, we had Theresa May, now the Prime Minister, on the other side. What now is the Government’s position on this? When the Home Secretary suggested that the “tens of thousands” goal might no longer be applicable, she was slapped down. When someone else suggested that figures for overseas students might be taken out of the total, No. 10 said, “No, that is not going to happen”. So what is the Government’s immigration goal in the light of Brexit? Is it to cut immigration to the tens of thousands? If so, how will universities cope with it? All I see on the part of the Government is a pretence that everything can be the best of all possible worlds and a lot of dithering, when they have to face up to hard decisions about the post-Brexit world. If they are not clear on this, they will ruin one of the greatest success stories in modern Britain.
Internationalisation is not just about economics; it is about our vision of higher education. Do we want to be part of a global community of ideas and scholarship, which I believe is the best way of encouraging scientific advance and cultural understanding? Already at Lancaster, two senior jobs have not been taken up because of Brexit. There is a lot of concern among our international staff about their future status and about visas for their families; there is a fear of xenophobia and about whether they will be welcome in Britain any longer. We have to ask ourselves whether this is the kind of country we want to be; or will the Government say clearly that they want to support British universities in continuing to be at the front rank in the world?
Lord Trees (CB)
My Lords, I welcome this debate and join others in thanking the noble Lord, Lord Soley, for securing it. First, I must declare my interest as chairman of the Moredun Research Institute, an animal health research institute in Edinburgh.
We have entered a phase of great uncertainty. Indeed, there appear to be only two certainties at present: first, that Brexit means Brexit—although many of us are uncertain about what that means—and, secondly, that none of us can be sure of the long-term consequences of our withdrawal from the EU. I voted remain but, like many, I accept the decision of the people and now seek to look at how we can move forward. The key issues for universities, as have been mentioned by other noble Lords, involve undergraduate students, postgraduate students, research funding and workforce issues. Time prevents me dealing with undergraduate students—others will deal and, indeed, have dealt with that—and I shall refer briefly to postgraduate students when I talk about workforce issues.
With regard to research funding, although in overall terms the UK is a net contributor of funds to the EU, in science research we have been a net beneficiary. Between 2007 and 2013 our indicative contribution for science research to the EU was some €5.4 billion while in return our scientists procured €8.8 billion to fund their research. In fact, UK scientists won 15.5% of all research funding from the FP7 round of research funding in that period. I confess an interest and, indeed, must declare my gratitude to the EU for research funding when I was a member of staff at the University of Liverpool, in my own modestly sized research group. We received substantial funds, some £1.6 million of EU funding, for animal infectious disease research.
I want to highlight three particular reasons EU funding has been very important to me and my colleagues and continues to be important for many research scientists throughout the UK. First, the growth in EU support has, to some extent, compensated for the reduction in funding from UK sources over the past 20 or 30 years—for example, in my area of animal disease research, funding from Defra has declined substantially in that period.
Secondly, EU funding has often been directed to relatively applied research, filling the gap between basic research funded by our UK research councils and downstream product development and research funded by industry. Plugging that gap has been very important in disease research, where we are frequently seeking tools to aid diagnosis and control of current disease problems.
Thirdly, as many noble Lords have said, EU research has facilitated, and indeed often required, collaboration and mobility between scientists, between member states and between member states and third countries. That is hugely beneficial. Of course, as has been said, notably by the noble Viscount, Lord Ridley, leaving the EU does not necessarily mean we cannot participate in EU research schemes—countries outside the EU do so—but will the Government make it a priority in our negotiations to achieve arrangements that will enable that? I fear that there is some uncertainty there and it is not clear under what conditions we might be able to participate.
Crucial to our research effort has been the contribution of EU nationals, which brings me to the workforce issues. In our universities today 16% of all academic staff are from other EU countries and in my own area, in the veterinary schools in the United Kingdom, 22% of academic staff are non-UK EU nationals. As other noble Lords have said, the involvement of such international scientists is crucial to a productive and dynamic research climate.
Looking beyond the EU, we should use our admirable commitment to spend 0.7% of GDP on overseas aid to increase research collaboration with, and to provide more postgraduate studentships for, developing countries, enabling their young scientists and research personnel to come and study in our institutions. Such support has a triple benefit: it benefits the recipients and their countries; it benefits our institutions; and it creates a lasting cadre of overseas leaders in emerging countries who will, throughout their life, look to the UK as their alma mater. Will Her Majesty’s Government think creatively in this respect?
Finally, economic growth depends on two main things: population growth and scientific innovation. I fear that Brexit will limit the former but, if there is an economic dividend from Brexit, can we ensure that we invest it in the scientific and technical innovation that will produce enduring economic benefit in post-Brexit Britain?
Lord Bragg (Lab)
My Lords, I thank the noble Lord, Lord Soley, for securing this very important debate and for his excellent speech. I declare an interest: I have been chancellor of the University of Leeds for the past 16 years. During that time I have seen it transformed, along with so many other British universities. It has become part of the outstanding global success of our universities, as outlined so graphically by the noble Lord, Lord Hannay, which punch way above their weight and lead the world—this is not a “Rule, Britannia!” cliché—in many areas of research.
I will quote the Minister of State for Universities, Science, Research and Innovation from evidence he gave to the House of Lords Science and Technology Committee in its report published in April this year. My noble friend Lady Blackstone has already quoted the first sentence. I think we would like to hear the rest. Mr Johnson said:
“Britain’s success as a science powerhouse hinges on our ability to collaborate with the best minds from across Europe and the world. This report is further evidence that the UK’s influential position would be diminished if we cut ourselves off from the rich sources of EU funding, the access to valuable shared research facilities and the flow of talented researchers that provide so many opportunities to our world-leading institutions”.
He was right. We would all be grateful if the Minister passed this on to the current Prime Minister. The result of the referendum has ruptured that. There are widespread fears that the dire predicted consequences are already beginning to roll in.
I will confine most of my remarks to what is happening at the University of Leeds. Like my noble friend Lord Liddle, I will give a close-up of a particular university. Leeds is part of the Russell Group, it is a very important research university and it is not given to hyperbole. European funding accounted for 15% of Leeds’s research income in 2014-15. Leeds is ranked 11th in the UK for involvement in the Horizon 2020 project for research and innovation funding. The university does particularly well in the generous Marie Curie individual fellowships and European Research Council grants. These are based on researcher mobility, which is essential to a world university. Tougher laws on immigration will compromise or even remove these schemes. In the weeks immediately after the referendum, there were six known cases of the university being removed from Horizon 2020 applications with a combined value of about €8 million, for reasons that have already been expressed.
Under the Erasmus scheme, for every EU student coming to the UK, a UK student can go and experience career-changing development and opportunities abroad. The university receives €1.7 million a year to facilitate this. This could be lost, which would be a great blow to Leeds’s ambition to be internationally engaged, with a workforce of international reputation. The university currently has 286 partnerships in Europe through Erasmus. They would be under threat.
Leeds currently employs around 700 staff from the EU. It urges the UK Government to guarantee that those currently working at UK universities can continue to do so in the long term. There are already considerable worries about the potential impact of immigration status on its ability to attract further academic talent from Europe. First-class science is based on talent and resources. Talent comes where resources exist. Already the university has experienced a couple of cases where senior academics have withdrawn their interest in working at the university due to the uncertainty and/or climate caused by the Brexit vote and the challenge to resources on that account. These numbers may seem modest but they are only the beginning, and from only one university. Perhaps noble Lords see it merely as a trickle, but it could more clearly be seen as a worrying early warning that in the not too distant future the dam will burst.
Leeds has around 1,200 EU students on degree programmes, 250 research students and 400 students on exchange programmes. At the moment there is absolutely no long-term certainty for any of them. The income from EU students alone in 2015-16 was over £8 million. This is to say nothing of the great advantages that we at Leeds have from, for example, the many Chinese students who come to Leeds and go back to China with firm loyalties and friendships. This is just the beginning of what could be a sad slide into a decline in one of our greatest present and potential assets. As the British Academy said:
“A long-term commitment to the UK’s research base is crucial in stabilising the UK research environment and its global competitiveness”.
Those 16 million of us who voted to remain are rather fed up with being dismissed and even derided as if we are bad sports. Democracy should respect minorities and we are a large minority. Part of that minority is the world of universities, which over the past few decades has seen a quite wonderful growth in reach and excellence, to the benefit of all UK citizens. We live in an age of accelerating, increasingly specialised knowledge. The world will go with those who have most of that and can retail it and add to it most accurately. I ask the Minister to outline a future strategy for British universities.
Lord Fox (LD)
My Lords, like my predecessors I am grateful to the noble Lord, Lord Soley, for bringing this issue to the attention of the House. I should quickly declare my interest in GKN, which participates in Horizon 2020 research. We have already heard many wise voices on this subject, with more to follow. To date, much of the talk has been on naming and delineating the problems, and perhaps suggesting a few mechanisms for solutions. I thought I would try something slightly different by focusing my efforts on suggesting a simple test that could act as red lines for the Minister during the negotiations, and which we could use to judge his success and the effect Brexit might have on research and science in this country. Unfortunately, it will look a bit like one of the Santa lists mentioned by the noble Lord, Lord Hannay, and I apologise for that.
First, we should probably acknowledge where we are. From everything we have heard today, most of us agree that research and science in this country is in a good place. I had the pleasure this year of attending the Royal Society’s annual science exhibition. There was room after elegant room of exhilarating science and most of those projects had similar characteristics. They had diverse institutional collaboration, important elements of European Union funding and myriad accents explaining the research. It was not just the best science but the cream of scientists from Europe and the rest of the world. This exhibition has been a feature of London life since 1778, so it would be foolish of me or anybody else to suggest that UK science will somehow be swept away on our leaving the European Union. However, it was hard not to feel that over the past few years we really have been enjoying something of a golden age. It would be very sad if this golden age were tarnished by Brexit; more than that, it would be deeply unfortunate.
We have heard many different numbers but we should highlight the importance of the European Union. Almost one-fifth of all the EU funding that comes to the UK is spent in research and development, so it really is an important part of our relationship with the rest of the European Union. During Questions earlier, I was interested to hear the noble Lord, Lord Bridges, highlighting research and development as one of his five or six possible areas for special attention. That starts to look like carve-out territory. The noble Lord, Lord Trees, highlighted the number of academics involved in his department and the noble Lord, Lord Bragg, pointed out the real importance of the Erasmus programme to our students. The European Union has a big influence on everything we do.
Following the exit vote, how did the Government react and what should we think of that reaction? On mobility, which noble Lords have all brought up, assurance was given quite quickly by the Prime Minister and others about the EU nationals who are here now. But it was a very narrow assurance and many here have pointed out that a unilateral recognition of the rights of European workers in this country would do much more to assuage their and their families’ anxiety. In August, the Treasury said that it would underwrite the current UK Horizon 2020 funding round, but what happens beyond that? It is easy to see why a feeling of uncertainty engulfs the sector: when it looks over the precipice of Brexit, it sees no clarity at all.
Looking forward, the Science Minister from the other place sought to reassure the Science and Technology Committee. He said that,
“regardless of the relationship we end up having with”,
the European Union’s,
“funding streams … we will continue to be an attractive country to partner with in science”.
It cannot be right to disregard that relationship. All expert opinion agrees that the level of funding the UK receives from Europe must at least be maintained. We need to know how that will happen. Perhaps the Minister can assure us that he shares that view.
So, to the test. We need a way of helping the Minister and the negotiating team to make the right decisions. The noble Lord, Lord Willetts, proposed a quite sophisticated structure and framework. I think I am coming up with something a bit simpler that offers yes/no answers. When we look at the situation as we think it will be post-Brexit—I am not asking for a running commentary, but that the Government use these tests—does the new situation preserve funding levels? Does it protect collaboration? Does it ensure free movement of researchers and students? Does it maintain access to EU-funded research facilities? Does it secure Erasmus? There are undoubted opportunities, which the noble Viscount, Lord Ridley, the noble Lord, Lord Willetts, and other noble Lords set out, but before we are in a position to take them we need to know that the Government are doing no harm.
These are the red lines. If the answer to all these questions is yes, well done. We will be in exactly the same position we are in now, minus a great deal of instability and anxiety down the road to get there; but if there are noes, then Brexit is actively harming our science and research and tarnishing the current situation. Can the Minister confirm that these are the right tests and if they are not, will he suggest what they should be?
Lord Broers (CB)
My Lords, I, too, congratulate the noble Lord, Lord Soley, on obtaining this debate. I have a number of interests. I chair the international visiting committee of the Department of Engineering at the University of Cambridge and the trustees of the China executive leadership programme at the Cambridge Judge Business School. I am on the court of the University of Lincoln, I am a long-term trustee of the American University of Sharjah and I hold a professorship at Monash University. I am a fellow of the Royal Society and a past president of the Royal Academy of Engineering.
Like many Members of this House, it has taken me some time to adjust to Brexit, to stop being consumed by regret and to start looking for the opportunities of even a hard Brexit. I think there are possibilities in the support and funding of innovation and science. What I shall say assumes the worst: that we are no longer going to be able to participate as a full member of EU programmes.
When I returned from the USA 30 years ago, I relied on EEC funding for my research and worked with the Interuniversity Microelectronics Center in Leuven. This is an amazingly successful organisation, founded as a collaboration between Flemish universities and the Flemish Government, that has become perhaps the leading research and innovation laboratory in the world of microelectronics with 2,500 employees and an annual revenue of €415 million. It is a notable example of what has been achieved with the aid of European funding and shows that it is possible to live with the huge bureaucracy that inevitably surrounds a programme open to more than 20 countries. However, there are problems with the bureaucracy, especially for small organisations, and this is where there should be opportunities for the UK, should the most unfortunate circumstances arise and we are no longer able to remain within the EU programme. It should be possible more efficiently to focus our funding, especially on innovation, which is what I want to concentrate on in this short speech.
I want to talk about how we should handle the money that we have in effect been spending on Horizon 2020 and the SME instrument, where 20 UK SMEs have been successful in the latest round. I have not been able to find out how much we have been receiving specifically through these programmes but it is certainly significant. Overall in the seventh European framework programme, the UK came second only to Germany in terms of grants and held 15% and, in total budget share, 17%, equating to €7 billion.
In the official words of the EU framework programme for research and development, Horizon 2020,
“promises more breakthroughs, discoveries and world-firsts by taking great ideas from the lab to the market”.
Horizon 2020 is therefore not a curiosity-driven research programme; it is a programme designed to take ideas from the lab to the market, and this is where it particularly resonates with the needs of the UK. I do not need to repeat that, while we have a world-leading science base, we are not leading in taking our great ideas to market. There are, of course, notable exceptions, but overall we have fallen behind our competitors and are still exploring the most effective ways to link our university research with the needs of the commercial world. Some of the catapults are doing this effectively, as are other initiatives, but we are still learning.
Innovation, or in oldspeak “product development”, is a quite different activity from curiosity-driven research. It is driven by schedule, cost and an understanding of potential markets—in other words, by the impact it has in the commercial world. Such criteria are destructive when applied to curiosity-driven or, as some refer to it, pure research. Pure research is devoted to gaining a better understanding of the world around us and is driven by curiosity and the desire to explore. Constraints arising from the need to meet schedules and cost targets are in general destructive to the pursuit of pure research. The two activities require separate strategies and funding mechanisms, and this is why I do not think the proposal to move Innovate UK into the same organisation as the research councils is a good idea. However, we will have this discussion when considering the Higher Education and Research Bill, and in any case I understand that every effort will be made to provide independence to Innovate UK. It is here that I have a proposal.
My proposal, should we have to leave the EU programmes, is to ring-fence the money that we are at the moment in effect contributing to Horizon 2020 and the SME instrument and allocate it to Innovate UK, which would distribute it to industry and the universities through programmes optimised for the UK. Innovate UK programmes, such as the catapults, of course include university researchers but are driven by the need to take ideas from the science base to the market, which is where I started. Will the Minister reassure us that whatever happens as we proceed with Brexit, adequate emphasis will be placed on taking our great ideas from the lab to the market as well as on supporting our science base?
Baroness Goldie (Con)
My Lords, we are beginning to experience some serious time slippage in the debate. I invite the co-operation of noble Lords in remembering the time slot of five minutes for Back-Benchers. We are at the mid-point for Back-Benchers. It would be helpful if when the clock shows four minutes, noble Lords consider their final questions and frame their remarks for the Minister, otherwise we will impact on the ability of remaining speakers to contribute to this debate. I apologise to the noble Lord, Lord Smith.
Lord Smith of Finsbury (Non-Afl)
My Lords, there are not many things that you can say our country does so well that we genuinely beat the world at it. Our leading universities are among them.
I declare my interest as master of Pembroke College, Cambridge. I shall focus on what the impact of the referendum result has been and continues to be in the college. There are five issues I shall highlight briefly. The first is the impact on the staff. Many of the staff who make the college work day by day come from the EU. They have given years of loyal service. They are settled here; they have homes and families here. On 24 June, they were utterly distraught. Their position here must be assured, yet at the moment their position is being used as a bargaining chip by the Government to try to secure the genuine rights of British citizens in EU countries. Surely it would be so much better if the Government would give a free and open commitment to ensure that those EU citizens already settled and working here can remain. In addition, if our academic staff, especially those at post-PhD level, have to seek visas in future under tier 2 provisions, it will be cumbersome, uncertain and expensive. It is essential that if that is to happen, the cap on tier 2 is either raised or, better still, removed altogether.
Secondly, there is the impact on our students. The Government have helpfully guaranteed the position of those students who will be starting their studies in 2017. That is welcome, but what about the uncertainty beyond that, for both undergraduates and postgraduates? Already this year we have seen a drop of 14% in undergraduate applications to Cambridge from EU candidates. Even more alarmingly, the Government are now talking about including all foreign students within overall immigration limits. I urge them as strongly as I can to think again on that. The impact on our universities, financially and academically, would be terrible.
Thirdly, there is access to research funding, about which much has already been said in this excellent debate. UK universities have received 16% of all European research funds in recent years, way beyond what a statistically equivalent proportion would yield. Among all the European universities, Cambridge has received the highest number of European Research Council grants, while Oxford is second. It is also important to remember this is not just about science research but about humanities and social science research. Can the Government guarantee that they will replace all the research funds that flow at present from the EU?
Fourthly, much has also been said in this debate about research collaboration. Increasingly, research at the highest level is conducted not in a single university but as a collaboration across several. Freedom of movement for academic researchers has been crucial to that, and common access to research grants is also crucial. There is already evidence that UK-based academics are being left out of research collaborations because of Brexit uncertainty.
There is one other, final thing to add. Since the referendum, we have witnessed a hugely disturbing rise in the level of hate crime, abuse, name calling, xenophobia and even assaults. In Cambridge, some of our most senior academics from EU backgrounds have directly experienced this. Our country and our intellectual life have been severely diminished as a result. It is almost as if licence has been given to denigrate and to hate. Where, oh where, is that tolerant, internationalist, welcoming, quirky, slightly grumpy, outward-looking, gentle, civilised country that I thought we were living in? I want it back.
Lord Haskel (Lab)
My Lords, it is the task of POST—the Parliamentary Office of Science and Technology—to keep parliamentarians, their researchers, their committees and parliamentary staff informed about all matters relating to science. On 10 November it is going to bring all these people together with the research councils to consider how Brexit will affect key policy areas relating to science. The session relating to funding of science research had 75 applicants to speak.
I declare an interest as a member of the board of POST. As a result, I was able to gain access to the issues that these people wished to explore. Overwhelmingly, they made the point that the great advantage of ERC funding is its encouragement of international collaboration. It is well known, they said, that this type of research is of higher quality than national research. Another issue is that EU funding, over the decades, has allowed our scientists to participate in EU and transnational knowledge communities and groups, thus creating centres of excellence—centres that take decades to build up.
The applicants were also concerned about the free flow of scientists. The current PhD funding allocation system does not discriminate between UK and non-UK EU applicants. This helps to recruit the best of the EU. It is the mobility of these highly skilled young scientists that is the key to the UK’s competitiveness and standing in global projects. They were also concerned that our strong voice in European debates around science policy would be lost, making us followers rather than leaders—an impression that will be very difficult to heal.
Those were some of the points raised in anticipation of the POST seminar, which strongly echo the views of other noble Lords here today speaking in this excellent debate moved by my noble friend. But POST will have another session at its seminar, looking at those decisions on Brexit that will require scientific expertise. That expertise is currently found at those European centres of excellence that the applicants spoke of, and we may now have to provide it from our own science budget. Take agriculture, for instance, and the use of herbicides. It is our scientists, and not the European scientists, who may well have to interpret the precautionary principle in relation to the way GE technologies and pesticides are authorised here in the UK. It is the same with fisheries. Defra will require a lot of scientific expertise to set up its own technical fisheries regulations and standards. We should also remember that coastal issues are devolved, so Scotland and Wales could also call on more of our science budget.
Going it alone on the environment requires a lot more work from our biodiversity and natural environment research base that has previously been funded through EU programmes. There are some 500 environmental directives, each of which will require a science review. Another big call on our science budget will be maintaining the Schengen information system for law enforcement and policing, and other big data systems that we depend on for trade and security.
All these issues are tackled much more effectively, and at lower cost, at a European centre of excellence—more effectively and cheaply than we could do it alone. If Brexit is going to call more heavily on our own science budget, surely this must be the wrong time to introduce a Higher Education and Research Bill designed to change the very structures that fund our science. If this is a listening Government, surely after hearing the well-reasoned and authoritative arguments in today’s debate, one thing they could do immediately is to put that Bill on hold.
Baroness Wolf of Dulwich (CB)
I too congratulate the noble Lord, Lord Soley, on securing this debate and, like many other noble Lords, declare an interest. I am a full-time academic at King’s College London and professor of public sector management; I run a postgraduate degree and also a research centre on international higher education policy.
Many noble Lords have spoken eloquently about the immediate concerns of the higher education sector and the worries that everyone has in the aftermath of the referendum. I would like to mention a couple of more general issues and give the discussion a little more historical context. It is important to remember this although we are indeed in something of a golden age for higher education in this country, it is very recent. Twenty years ago, this country’s higher education sector looked very different and in imminent danger of near collapse, not of becoming, as we have heard, one of what are clearly the two leading systems in the world.
The noble Viscount, Lord Ridley, noted the five British Nobel prize winners currently in the United States. Of course, they did not leave because of Brexit or for any reasons to do with the EU; they left when, not long ago, we had a massive exodus from British science because the conditions were so poor. The past 15 years have been very good for British higher education for a number of reasons, which include greatly increased support in many—not all—areas of research from the Government and the arrival of both fees for home students and growing numbers of overseas students.
It is important to recognise that the general context, particularly the economic context, has a huge impact on what happens to higher education and that, whatever happens with EU programmes, we are in for a very uncomfortable couple of decades because everything will be so uncertain. Our US staff have just taken a 20% pay cut, which will obviously have an impact.
It is also important to realise that although we seem to have been in a glorious period, a number of things in higher education have not been going so wonderfully. Now that everything is up for grabs, I hope that the Government will take note of where a number of things that we have been able to do have papered over cracks within our system and the education system of our country. The noble Baroness, Lady Blackstone, referred to this. Many of our departments, particularly those which require quantitative skills, are recruiting overseas and EU staff not only because they want to be open to all the talents, but because it is extremely difficult to find any British candidates. You can see the impact of that in departments of mathematics or in any of the quantitative social sciences.
I urge the Government, in considering both immigration and higher education policy, to take note of the fact that there are major problems with the education system of this country which mean that we are not nurturing the talent we need for the next generation of higher education researchers and academics. That should be a priority for the next few years.
Perhaps most importantly, I want to refer to the new political environment. Several noble Lords, including the noble Lords, Lord Giddens and Lord Haskel, referred to the Higher Education and Research Bill. We are now in a very strange political environment. We have a higher education Bill coming through which proclaims the glories of the market and of open entry for new institutions while in fact increasing enormously the level of micromanagement and regulation of the whole sector.
My fear is that we have a train crash advancing, because we have that on the one side and on the other a Home Office determined to reduce immigration and also—in many ways rightly—concerned about low-quality providers. That is not the Home Office’s job, but in its defence, it has a record of detecting and closing fraudulent language schools. The terror now is that it seems to feel that it can identify high-quality and low-quality institutions and fine-tune immigration in those terms. That is a dreadful prospect. Good university systems are those that have autonomous institutions. Whatever other parts of government may be telling it, there is no way that it can take a simple metric to decide whether an institution is good or bad and tie immigration facilities to that measure.
I ask the Minister to assure us that the Government are indeed aware that they do not have a valid, tested metric for judging the quality of an institution and that any measures relying on such a metric are bound not only to fail in their objectives but to do enormous damage to the quality of the higher education sector.
Baroness Eccles of Moulton (Con)
My Lords, I too congratulate the noble Lord, Lord Soley, on introducing this most timely and important debate. It is daunting to stand here following so many powerful and well-informed speeches—and there will be more to come.
The interest I can declare is a long time ago. In 1982, I joined Durham University’s council and for the next 20 years played a part in its administration. During that time and more recently, changes in funding have caused some uncertainty, but nothing compared with what we are facing today. For instance, the introduction of tuition fees was a departure from the formula previously used by the Higher Education Funding Council. Also, there were quotas for student numbers, with financial penalties if the quotas were not achieved or were exceeded. In the case of funding for research, the application of the research rating is adjusted every six years and measures the output of the academic staff and their publications. The next research excellence framework is due in 2020. The funding from the EU comes via the eligibility criteria. It varies year by year, but remains a reliable source of funding. That is a little bit of scene-setting of how it was before we woke up on 24 June, when the landscape had already changed dramatically.
One of the first reactions was: what about freedom of movement and the right to stay? This concerned everyone working in the university sector who came from the EU, both students and academic staff. There has been some reassurance from the Government, but until negotiations have taken place, it is inevitably short term. This, in a sector where planning is long term, especially for research contracts, introduces a degree of uncertainty never known before.
To state the obvious, universities carry out research on disciplines other than those within the scientific definition. Although these disciplines attract far less funding for research, they must not be disregarded. There is an interdependence between the student body and the academic body; one could not exist without the other in our public universities. The funding of one affects the funding of the other. It must also be remembered, as was mentioned by a previous speaker—I think it was the noble Baroness, Lady Blackstone—that in the field of medicine, teaching hospitals have links to universities, so scientific research impacts on our health service, too.
The next subject I want to mention has been mentioned by more than half the speakers so far: Horizon 2020. The Government have been reassuring about continuing participation in it. The body describes itself as having the biggest research and innovation programme in the EU, with nearly €80 billion of funding available for seven years, starting in 2014. The Government say that they will work with the Commission to ensure payment when funds are awarded. The important message at this stage is that UK participants can bid for competitive EU research funding while we remain a member of the EU. The Treasury will underwrite the payment of such awards, even when specific projects continue beyond the UK’s departure from the EU. It is also important that funding for scientific research is maintained so that we hold our position as global leaders in international research.
The universities themselves do not appear to be looking for change. Therefore, we need the negotiations to protect and preserve all that is good in our universities and research activities. This will allow them to prosper and develop into the future.
Baroness Crawley (Lab)
My Lords, I too am extremely grateful to my noble friend Lord Soley for initiating this important debate and getting us off to such an excellent start—the debate could not be more timely. Those of us who voted to remain in the European Union see the future uncertainty in the area of funding for universities and scientific research as one more reason to fear for the gains that this country has made over the last 20 years in becoming a global leader in research and development. Our status as a leader in research and development, as many noble Lords have said, did not come despite our membership of the EU but, in many aspects, because of it. Many of us in this House are privileged to have received honorary doctorates from universities and indeed many noble Lords are chancellors of our wonderful universities. We all know at first hand of the pressures on those universities even before 23 June—as the noble Baroness, Lady Eccles, the noble Lord, Lord Fox, and many others have said—and we are aware now of so much post-Brexit anxiety among them.
Universities across this country have a proud history of welcoming students and researchers from the EU and the rest of the world, which enhances the diversity and intellectual quality of our university courses and our research departments. It also brings much-needed economic stability and predictability to our colleges and centres of excellence. Yet the Government, in bending the crooked knee to a hard Brexit, are insisting on including foreign students among their immigration count. Do the Government not understand that, in order for the work of universities in this country to progress, foreign students and researchers are vital?
One university with which I have a close relationship is the excellent Plymouth University. Its groundbreaking work on dementia research, for instance, has been instrumental in enabling dementia-friendly communities to be set up throughout the south-west. Yet we hear this week from the Alzheimer’s Society that our role as a leading country in dementia research could well be in jeopardy as we exit the European Union. There are 850,000 people living with dementia in the UK and their number is set to rise well above 1 million by 2021. It is vital that active treatments are developed for this disease and that a cure is one day possible.
The UK has been at the forefront of the fight against dementia. David Cameron’s Challenge on Dementia 2020 stated that Britain should become,
“the best place in the world to undertake research into dementia and other neurodegenerative diseases”.
I have been personally associated with the former Prime Minister’s rural dementia groups and I know first-hand about the important work that they have undertaken. But Brexit has brought many uncertainties in this area. I ask the Minister: have the Government yet looked at the impact of the UK’s withdrawal from the EU on funding for UK dementia research? In the historically underfunded field of dementia research, EU investment is particularly critical. EU funding has become a vital source of support for that research and the loss of access to EU funding programmes could have a significant impact on major and pilot projects as well as grants for equipment for dementia researchers. What will the Government do in the long term—as noble Lords have asked—about the projects launched and funded by the EU Commission’s Horizon 2020 research and innovation programmes, many of which address the issue of dementia, once we have left the European Union?
Our universities are centres of learning but also economic hubs for their towns, cities and regions. They have always been inclusive and collaborative in their ethos, with an outward-looking view of the world and its opportunities. Will the Government ensure that Brexit will not mean the end to all that?
Lord Mair (CB)
My Lords, I join other noble Lords in congratulating the noble Lord, Lord Soley, on initiating this important debate. I begin by declaring an interest as a fellow of both the Royal Society and the Royal Academy of Engineering. I am also a professor of civil engineering at the University of Cambridge where I lead a large research group, which includes many non-UK EU nationals. I will make two points: the first relates to EU funding for research and innovation and the second—closely related to funding—is about collaboration and retention of international talent. In both cases there is considerable uncertainty following the referendum.
Dealing first with EU funding, the UK receives a significantly greater amount of research funding than it contributes, a point made by the noble Lord, Lord Trees. If the UK loses access to EU funding for scientific research, will the Government pledge at the very least to make up for this funding gap? This question was also asked by the noble Lord, Lord Smith of Finsbury.
My second point is about the crucial role of collaboration and the all-important retention of international talent. UK science and technology is world-leading. The Royal Society reports that 60% of the UK’s internationally co-authored research papers are with EU partners. Losing this ability to collaborate freely would be very damaging. In my own department of engineering at Cambridge, in addition to our academic staff—many of whom are EU nationals—we have several hundred post-doctoral researchers. This community of post-doctoral researchers is the engine room for the research that underpins the university’s world-leading reputation. One-third are EU nationals—the picture is similar across the whole of Cambridge University, and for other leading UK science and technology universities.
Free movement is vital in attracting top academics and students for the benefit of UK science and technology, and for the benefit of the UK economy. The Government need to act now to ensure that academic staff, researchers and students from EU countries have certainty about the future. Otherwise, they will be deterred from working in British universities and will simply go elsewhere. Well-funded science and engineering research is vital for the economic growth of the country. Engineering contributes at least 20% of gross value added for the UK economy, and accounts for 50% of the UK’s exports. Innovation is critical to the economy; it underpins the research that has real impact on business and enterprise, as the noble Lord, Lord Broers, said.
Start-up companies play a key role in driving innovation. EU nationals are often highly influential scientists and engineers in many start-ups, generally having very close links with university research groups. Cambridge alone has more than 1,000 technology companies in or near the city, many of them spin-out companies from the university’s research groups and many of them receiving EU funding. According to the Royal Academy of Engineering, 25% of UK start-ups were founded by EU nationals, and 45% of UK start-up employees are EU nationals. A clear message is urgently needed from the Government if these vital start-ups are to remain and thrive in the UK. It is of course also crucial that these start-ups do not relocate. Other countries in the EU have been quick to seize the initiative in this period of uncertainty, encouraging UK-based start-ups to go elsewhere. The Royal Academy of Engineering draws attention to Berlin being especially proactive. The Berlin Senator for Economics, Technology and Research has been writing directly to such companies to persuade them to relocate to Berlin. Proactive government action is needed quickly to prevent this.
There is a vital need to remove the uncertainty that is already so damaging to universities and their researchers. The Prime Minister has stated that the Government are committed to ensuring a positive outcome for UK science as the UK withdraws from the EU. If this to be achieved, the major funding gap for scientific research caused by leaving the EU must be filled, one way or another, by the Government. Most importantly, the UK must remain a magnet for international talent. Without outstanding EU researchers, our science and engineering research base will suffer badly. This will be damaging for universities and innovation, and for the UK’s economy. We ignore these risks at our peril.
Lord Lipsey (Lab)
My Lords, I chair the Trinity Laban Conservatoire of Music and Dance in Greenwich. It is the nicest job I have ever had in my life. It is a very successful institution and recently received HEFCE’s seal of approval as a world-class teaching institution. We also recently achieved degree-awarding powers after a minute examination by the Privy Council. We are a very international place, because music is a very international discipline, with music teachers and students from around the world coming together to achieve the very best. Some 16% of our undergraduates come from the EU—to their benefit, ours and, most importantly, Britain’s. However, Brexit threatens us with a triple whammy. The first whammy is visa policy. Will this Government, desperate as they are to cut the headline numbers of immigrants to this country, impose restrictions on EU students? Universities have, of course, tried to get undergraduates excluded from immigration numbers and the public agree: only 25% consider undergraduates to be immigrants. However, there seems to be resistance, particularly from the Prime Minister. There is a danger, to put it no higher, that Ministers will think that cutting visas to end student immigration is a very easy way to obtain their immigration targets.
The second whammy is loans to students. EU students are eligible for loans from the Student Loans Company essentially on the same terms as British students. We are very grateful to the Government for extending this scheme for next year, 2017-18, but that is simply a breathing space. We need to guarantee that those loans will continue to be available in the future, as they have been in the past.
The third whammy is fees. An EU student pays the same as a domestic student at about £9,000 a year. International students pay the full cost of their courses: at an institution like mine, where there is a lot of one-to-one teaching, that is £15,000 to £20,000 a year. If EU students had to pay £15,000 or £20,000 a year rather than £9,000, would they still come? We do not know the elasticity of demand, so we cannot be sure, but I have a pretty clear instinct on this. They can go to similar institutions in other European countries—none of which is as good as mine, of course—at much lower cost, sometimes perhaps even nil cost. The idea that they will pay £15,000 or £20,000 a year, amounting to possibly more than £50,000 for a three-year course, especially when loans are not available to meet that sum, seems jolly unlikely. My real fear is that, if this development occurs, our entry from the EU will fall off a cliff.
It is by no means certain that any of this will happen. I know that Brexit means Brexit—whatever that sentence may mean—but it does not mean it is necessarily going to happen, given that the unexpected lurks in all sorts of corners of our national life. We hear today that the Government will have to come back to Parliament before invoking Article 50. If the British public turn against the previous decision, I am quite sure that, faced with the prospect of Mr Corbyn coming to power on a wave of pro-EU sentiment, the Government will change their mind about a second referendum. That is one possibility, although I do not rely on it. However, I hope to rely on the fact that the Government are entering a negotiation in which they have to take the predicament of the British university sector seriously, and not treat it, as I hear many Ministers are doing, as if it will all come right on the day or as if we do not need foreign students—a sort of xenophobic or one-island view of what higher education can do in the modern world. It is important, however, that decisions be taken soon before a generation of students in Europe decide that Britain will not welcome them and go elsewhere. That would impose devastating costs on my institution, other universities and the country we love.
Baroness Walmsley (LD)
My Lords, I would like to focus my remarks on the life sciences and the effect of Brexit on medical research. The UK life sciences ecosystem is currently a global leader in scientific research, and commercialisation is improving. I for one would like to keep it that way. The UK is home to four of the world’s top six universities for research in, and study of, clinical, pre-clinical and health topics. It also benefits from a sophisticated regulatory system, which plays a key role in shaping EU legislation and regulatory activities. Thanks to these factors, a quarter of the world’s top 100 prescription medicines were discovered and developed in the UK. We have the largest biotech pipeline in Europe, with more than 580 products in development in 2015. Leaving the EU will have a significant impact on UK life sciences, particularly around the funding of scientific research and research collaborations. One of the top priorities for the Government in their negotiations must be to ensure that measures are in place post-Brexit to prevent any weakening of our position as a leader in life sciences research and innovation.
The contribution of life sciences to our economy is significant. They contribute more than £60 billion a year to UK GDP, with annual exports of £29.5 billion. Pharmaceuticals generated nearly four times more gross added value per head of those employed than the automotive industries. Therefore, the Government need to pay even more attention to life sciences than to companies such as Nissan. A majority of firms in the sector are SMEs, historically the main engine of UK economic growth. Collectively, these employ 220,000 people. Two-thirds of these jobs are based outside London and the south-east, stimulating regional growth, so it cannot be said that the industry is south-east biased.
It is vital that this contribution survives Brexit, but there are severe dangers. Historically, the UK has been a net recipient of €6.9 billion of R&D funds. The UK is currently part of the EU Horizon 2020 framework. Although HM Treasury’s commitment is welcome, I join other noble Lords in asking what happens to UK access to this funding beyond Horizon 2020. Lack of ERC funding might discourage top scientists from conducting their research at UK institutions, while the removal of grants to translate research into usable products may reduce the number of UK start-ups, which are important for economic growth. We heard about this phenomenon from the noble Lord, Lord Mair; the same thing applies to life sciences. Even if the UK retains access to Horizon 2020 funding, other funding sources, such as the European structural and investment funds, which brought €1.9 billion for R&D into the UK between 2007 and 2013, will be lost following Brexit. Will the Government therefore renew their dialogue with the pharmaceutical industry to ensure that it is a key plank in the renewed UK industrial strategy?
Collaboration on publications is also at risk, as we have heard. Currently, around 60% of internationally co-authored papers produced by the UK come from collaborations with EU partners. Uncertainty over funding arrangements has already jeopardised some collaboration, as we have heard from other noble Lords, and could affect many more.
Our life sciences SMEs currently enjoy access to the most developed funding pipeline in Europe, with both a thriving venture capital environment and one of the world’s most vibrant locations for initial public offerings. Many VC funds receive up to 40% of their funding from the European Investment Fund. Loss of access to European Investment Bank and EIF funding could result in reduced venture capital funding for UK SMEs and ultimately fewer UK start-ups, and of course some of them might relocate to the EU or the US.
Finally, on the role of the NHS as an engine for innovation, the UK has an opportunity to capitalise on the unique potential of the NHS to act as a “single site” for clinical trials. As a closed healthcare system for a large and diverse population, with access to data across the entire patient journey, the NHS is a unique selling point for conducting clinical trials in the UK. The improved co-ordination and integration of patient records is especially valuable here. We heard some specific examples of this from the noble Baroness, Lady Blackstone.
Therefore, research and translational funding, collaboration, jobs and SMEs, and the NHS—all are at risk. UK life sciences could be heading for disaster. The Government, led by the three Brexiteers, like a bunch of lemmings jumping over a cliff, are planning to take the universities and scientific research with them. Does the Minister have a parachute?
Lord Hunt of Chesterton (Lab)
My Lords, I congratulate my noble friend Lord Soley on this debate. I declare my interest as a professor in various universities and as an applied scientist.
This is yet another profoundly depressing debate that deals with the mainly negative consequences of government policies following the referendum result in June for the UK to leave the EU. These policies affect UK science, research and universities and, as the noble Lord, Lord Smith, movingly said, the many thousands of individual British, European and non-European workers in universities. How, one wonders, is the House of Lords responding? The Government Benches are remaining rather cheerful, while the other Benches are not so cheerful. However, university common rooms, which are usually cheerful places, have become extremely gloomy about the consequences.
Essentially, the Brexit policies will, after a few years, lead to significant reductions of UK involvement in research projects funded by EC programmes and, most likely, a significantly reduced involvement of EU scientists working and living in the UK. The Royal Society—and the noble Viscount, Lord Ridley, in his remarks—is more optimistic about future funds for UK involvement in these programmes. However, as other noble Lords have said, so far as we can gather they are finite, having a cut-off point, and most academics are quite pessimistic about this long-term commitment.
The UK’s international reputation is also important, and colleagues from all over the world have heard with incredulity about the likely withdrawal of significant UK research associated with EU collaboration. This is indeed extraordinary, since the total amount of the UK’s research, although of a high standard, is appreciably less than that of other leading countries—a point made by the noble Lord, Lord Kakkar. There has been no suggestion or explanation that this important gap will be closed, which is of course reflected in and is a consequence of the low industrial productivity in the UK.
Nevertheless, I will make a few constructive remarks. The visa process for researchers to come to the UK should be expedited. Many researchers work in research institutions and companies, and some of them want to become British citizens as a result of these changes. However, the trouble is that this process in the Home Office takes such a long time that some of these people will say, “I can’t wait that long”, and will leave. For example, this delay is leading one small high-tech company, with mostly non-British staff, to set up a branch office in Germany with the possibility of relocating—a possibility the noble Lord, Lord Mair, just described. Will the Minister tell us whether foreign visiting scientists will be able to travel across Europe? If not, they will restrict their visits solely to the Schengen EU countries. Again, one is already seeing that some scientists from Asia, for example, will choose to avoid the UK when planning to come to Europe simply to have one visa for all these countries.
My second point is that we should use UK research funds to enable UK researchers to continue to participate in European-wide networks, as many noble Lords mentioned, including the noble Lord, Lord Willetts. For example, I was involved in setting up such a network involving aerospace, automobile and other companies in the late 1980s, which has been extremely successful. This continues to be supported in various ways by EC grants. With the UK leaving the EU, it will still be possible for the UK to contribute and benefit because these are open organisations, but they may not have the benefit of funding. For example, this particular network, ERCOFTAC, has led to open European collaboration in technologies. The openness of Airbus has enabled European researchers to contribute in a way that, for example, US researchers cannot, being unable to collaborate with Boeing, which is a very secretive organisation.
EC civil servants have made clear that the EC will continue to be a global hub for researchers all over the world, which will include the UK, although clearly we will not be in a leading position. However, it is important for the Government to encourage the UK to participate; I hear from conversations that Whitehall civil servants recognise this. Europe has pioneered international research and its applications, not only through EC collaboration but through the intergovernmental satellite scientific organisations; other noble Lords commented on this, and my noble friend Lord Soley referred to space. I cannot speak more about this—I have spoken for my five minutes.
Lord Rees of Ludlow (CB)
My Lords, I declare an interest as a member of Cambridge University, an institution that is global in its staffing, its students and its mission. I am one of the 93% of scientists who opined in a poll that the net effects of Brexit would be negative for science and technology. Not only big projects such as aerospace benefit from pan-European collaboration. Even small sciences and high-tech start-ups require a critical mass of internationally mobile people. The EU has been a critical catalyst across the whole range of Wissenschaft.
In my Cambridge college, there is an especially strong cohort of EU students, many from Hungary, Poland, the Czech Republic and other nations with a strong academic tradition. We are surely right to welcome them—in their own interests and those of Europe. They see themselves as Europeans, with a shared culture. They hope our continent can be a progressive political force in a turbulent and multipolar world, where the challenges cannot be tackled at national level. Indeed, the science and university-based arguments against Brexit, compelling though they are, are trumped for many of us by these broader European aspirations.
It is sometimes argued that it is not the EU but the rest of the world with which we should engage, as though there is a conflict between these goals, but the opposite is the case. We will be less attractive to mobile talent and collaborators from the US or India if we cannot offer open links to European networks. Indeed, the worry is that even if the funding streams were sustained for participation in the ERC, Horizon 2020 and the Erasmus exchanges, Brexit would still weaken us. Skilled people from overseas already feel less welcome, their families less secure. The Chancellor has assured international bankers of special treatment but there has been no comfort for any other sector.
We can learn lessons from the past. This year’s Nobel Prize in Physics was shared between three Brits for work carried out mainly in the UK around 1980. All three defected to the US during the Thatcher years, when university budgets here were heavily squeezed. Fortunately, our situation has brightened since then, substantially due to the strengthening of mainland Europe’s science and the EU. Indeed, we have had genuine “brain gains”. Among them are the current Royal Society president and the discoverers of the wonder material graphene, who came here from Russia, via a stay in Holland. Would they choose Britain today? Post-Brexit, such gains will be at risk. The prospects of new collaborations may be jeopardised. Outstanding foreigners will not want to work here as much. Many who are already here will feel that they will be better off abroad. Ambitious young people considering science as a career will wonder whether they can do their best work in this country.
That is why, incidentally, the contentious Higher Education and Research Bill is proving so unfortunately timed. Universities and researchers need to focus on damage limitation. What they do not need is a major and distracting reorganisation. As the noble Lord, Lord Haskel, said, the Bill should surely be shelved.
However, these issues are not just a matter for academia. The whole country suffers if our hard-won expertise in science and our universities spiral into decline. The maxim, “If we don’t get smarter, we’ll get poorer”, will apply even more powerfully if we have to contend with the fallout from Brexit.
Lord Judd (Lab)
My Lords, I declare an interest as an emeritus governor of the LSE, and I am glad to be a life member of court at both Lancaster and Newcastle Universities. In relation to those universities, I emphasise the importance of what my noble friend Lord Liddle said. Universities in the north are vital to the regeneration and future well-being of a largely deprived community. If we allow this situation to deteriorate, we shall never be forgiven. This is a grave and serious matter on which we need urgent reassurances.
I have sat as a lay man listening to this debate and have a sense of rapidly advancing disaster ahead. I do not say “disaster” lightly. Universities and higher education are fundamentally important, to not just the survival but the well-being of the United Kingdom. They need to be cherished, encouraged and supported in every way. If I were to say nothing else about the messages that I have heard today, what worries me is that the effectiveness of universities, their spirit and the quality of their work are related to their morale. It is upsetting to hear the accumulated evidence of plummeting morale in universities as uncertainty prevails.
We are discussing this issue in the context of not just Brexit but the higher education Bill, which is rapidly coming towards us. We will all need to keep going back to the fundamental point of asking: what are universities for? They are of course there to provide the resources of knowledge, expertise and the rest that are essential to the running of any community. However, they are about not just that but originality, challenging and the ability to put forward vision, as the noble Lord, Lord Smith, said so well. How much I should like to have back the Britain that he wants to get back to in terms of values and attitudes.
It is impossible to have a relevant university in the modern world—which is, above all, highly interdependent—if it is not by definition an international community. It is not just about the different experiences that people bring in their own academic work; it is the social and psychological reality of students and staff approaching their work and lives together in the context of feeling every day that they belong to a global community. It is there in their university. Unless that is preserved as a high priority, our universities will quickly wither and become irrelevant.
The important point, above all, is vision. In some ways we are facing, in the context of this debate, the consequences of a trend that has been developing too fast—a tendency to see universities simply in their utilitarian contribution to the well-being of society. Our past strength and future is and has been related to people being prepared to challenge and think outside the established routine, and to look ahead. How on earth is that to happen if we do not have the richness of the international community in our midst? This is an urgent debate and we need evidence—I do not see any—that the Government are giving it the priority it deserves.
Lord Paul (Non-Afl)
My Lords, I thank the noble Lord, Lord Soley, for introducing this timely debate and declare an interest as the chancellor of the University of Wolverhampton.
The outcome of the EU referendum was not the result that most in the higher education sector wanted, wished for or indeed expected. However, a decision has been made, and we must all accept the result and work constructively with the Government to support the best possible outcome for the UK during the negotiations and beyond.
Universities have a key role to play. They are a national asset that has played and will continue to play an essential part in promoting and driving economic growth, as well as ensuring that we offer and deliver a fairer society. I am certain that our British universities can thrive and prosper post exit but they must receive the right support from our Government. There is too much to lose.
The UK university sector is innovative, entrepreneurial and responsive. That is thanks largely to the autonomy of the sector—something we hope this House will seek to preserve and retain when the Higher Education and Research Bill is considered soon. We have seen positive signs of intent from the Government recently and I am very pleased to note the extension to the government guarantee for funding European Structural and Investment Funds projects. This complements similar guarantees regarding Horizon 2020 research funding.
So there are some good signs but much more needs to be done. We all understand that the Brexit negotiations will be complex, tricky and time consuming, but we must not allow our universities to be unnecessarily and unhelpfully constrained. Our approach should enable them to enhance and promote international research collaboration, with partners both in Europe and across the world; to gain access to increased levels of investment in research and innovation; and to develop workable policies to promote the UK as an attractive destination for all international students and staff, including considerate and pragmatic immigration policy reforms. Collectively, we have some 125,000 EU students and 43,000 EU staff at our universities—all adding value to our economy. We should also enable universities to foster and grow global opportunities for UK students and staff by enhancing mobility programmes, as well as create an environment that facilitates the recruitment and retention of the best available talent.
The UK university system is well respected around the world and we must not jeopardise this good standing. To do so would be detrimental on a number of levels. The figures do not lie. Last year the total value of knowledge exchange interaction between UK universities and their partners across the economy increased to £4.2 billion, and the higher education sector generates nearly £11 billion per annum in export earnings. We lead the world in return on investment from the commercialisation of research, and we match the US in our level of engagement with industry.
Universities help to create new jobs and new businesses in communities. Last year alone, more than 4,100 new start-ups were founded by UK graduates, a great many nurtured by our universities. The University of Wolverhampton has recently created the Caparo Management Suite as a forum space in which business leaders, academics and students can all come together to exchange ideas and promote new business opportunities and development. It is essential that we keep our education system international. Our universities do much for our foreign students but the UK benefits significantly in return.
At Wolverhampton, we pride ourselves on being the university of opportunity. We openly welcome foreign staff and students, who in turn contribute an awful lot in terms of talent, ability and commitment. They add value to the system and we must continue to attract and retain that talent.
Baroness Dean of Thornton-le-Fylde (Lab)
My Lords, although it is repetitive, I too thank my noble friend Lord Soley for achieving this very interesting debate. I declare my interest as a member of Nottingham University Council. There will probably be Members in the Chamber today who attended one of the 45 events that Nottingham University organised in Parliament last Tuesday.
That touches on the point made by my noble friend Lord Judd a few moments ago—how important universities are to their local communities. Nottingham has a proud record in that regard, as it does with international students coming to Nottingham and our students going abroad, particularly to the campuses the university has had for a number of years in China and Malaysia.
Last Tuesday was a clear example of just how entrepreneurial universities are in our community today. Those 45 events were organised by the university but were supported by more than 100 companies in the area, as well as by all the MPs in and around Nottingham. It was a very successful event, demonstrating clearly the important role of the university in the community.
There may be those who say that today’s debate is a case of special interest pleading because it is about universities and funding. I do not take that view. It is about us as a nation. Universities are not separate from or outside our nation; they are an integral part of it and of what we are in many respects. As we have heard today—I will not repeat the details; I have had to throw to one side all the facts that I had as they have all been given—our universities’ success depends on attracting talent and research funding. It is about getting out more than we put in in Europe, and it is about two-way collaboration—and not just with the EU and, separately, internationally. We have good international research because we also have good, successful European research. That is assisted by the 16% of academics from within Europe and the 12% of international academics from outside Europe. Together, all those issues determine success or failure. It is like a small jigsaw puzzle: they all live together; they are all interrelated; and they all contribute to the huge success of our university sector. They are all interdependent.
I think that the Chancellor of the Exchequer was trying to be helpful when he said, “Don’t worry. The research funding you lose, we will meet”. However, it is not just a matter of money; it is about culture and expanding the boundaries of the talent that we can bring together to work in the best interests not just of Britain but of the globe—it is something from which we all benefit.
This debate goes to the heart of what the United Kingdom will be after Brexit. Do we stumble into it, as one might read from this debate? Will we have self-inflicted wounds—or what some might call “vandalism”—if we do not, as a nation, deal with this issue? We are looking desperately to the Government to show leadership and to guide us. We are not looking to them to say, “We’re not going to discuss every line of our negotiations”, or, “We’re thinking about it and will come back to you”. That is not good enough. The point made about Nissan was exactly what many of us feel. My background is in industry. Although none of us knows the details, I was delighted to hear about Nissan last week. However, with all due respect to Nissan and its importance to this country, what it contributes is only a small proportion of that contributed by our university sector to the nation’s economy and sense of well-being. Some 180 countries send students to the United Kingdom. For a little island like ours, that is a huge success. It is no good repeating the mantra, “Business will help”. Business in the UK does not generate even the average amount of research funding in Europe. In that respect, our universities are second only to those in Germany. So we cannot rely on business because it is not successful in bringing in research money.
Universities are right to ask these questions. The Government have a responsibility not to keep pushing it away but to give an answer—a whole, rounded answer—to the question: what is our position on universities for the future?
Lord Bilimoria (CB)
My Lords, when I visited CERN in Geneva, I realised that the experiments that led to the famous Higgs boson discovery, ATLAS and CMS, were both headed by British scientists: Professor Dave Charlton from the University of Birmingham, and Professor Sir Tejinder Virdee from Imperial College. And of course it was Sir Tim Berners-Lee who actually created the world wide web at CERN. Then, this year, we had the gravitational waves proving Einstein’s theory of relativity, 100 years later, with 1.3 billion light years being measured. Who were two of the principal scientists behind that? Professor Alberto Vecchio and Professor Andreas Frieze—EU scientists at the University of Birmingham. What makes this country great—this 1% of the world’s population, as my noble friend Lord Kakkar said—is not our natural resources but our talent. The jewel in our crown is our universities, which are the best in the world, along with those in the United States of America.
I declare my various interests, including being the proud chancellor of the University of Birmingham, chair of the advisory board of the Cambridge Judge Business School and the president of the UK Council for International Student Affairs, representing the 450,000 international students in this country, of whom 180,000 are from the EU.
I say that we achieve all this excellence in spite of underspending on HE. We spend way below the EU and OECD average, and we are well behind the United States of America. When it comes to our research and development spending as a proportion of GDP, South Korea spends double the percentage that we do and we are way below the EU average, let alone that of the United States. What is scary is that the proportion of GDP spent on R&D, 1.6%, has been falling from 1985 to 2013. Will the Minister acknowledge this?
We heard from my noble friends Lord Rees and Lord Smith and others that at the University of Cambridge, around 16.5% of university staff are EEA nationals. When it comes to PhD students, that figure is 27%, and for MPhils, it is 21%. Look at the awards: UK institutions have won more ERC awards than any other country—989 compared with France’s 577.
On the implications and opportunities of leaving the EU on science and research, the University of Cambridge’s response is that,
“it will create significant challenges for Universities. We recognise that there is a great deal of uncertainty”.
Everyone has said that today. But the university also said that the political instability raises significant questions in the following areas. It refers to,
“our recruitment and retention of the brightest and best staff and students regardless of nationality … the future of our substantial European research funding”,
and the point that many noble Lords have touched on,
“the extensive global network of the University’s collaborations”.
Sixty percent of the UK’s internationally co-authored papers are with EU partners. The mobility of our scientists is phenomenal—I have given you just one illustration. Professor Alice Gast of Imperial College, one of the top 10 universities in the world, said:
“Foreigners improve the creativity and productivity of home-grown talent, too”.
They enrich our universities, both academics and students.
Cambridge was the highest recipient of EU funding allocated under Horizon 2020, about which lots of Peers have spoken. I want to ask the Minister about intellectual property. In the event of Brexit—which may not happen, by the way—the value of any EU-based research for exploitation may be limited. Does the Minister agree with that? The UK has played a key role in shaping the design and implementation of the EU’s research programmes to ensure that the funding has been allocated on excellence. That has not been mentioned so far. Legislating for the ERA could have potential negative impacts on our current world-class systems.
People talk about the drop in the number of EU applicants, which is real—will the Minister confirm that? But the other aspect is that as the Royal Society said, the scientific community often works beyond national boundaries on problems of common interest and so is well placed to support diplomatic efforts that require non-traditional alliances of nations, sectors and non-governmental organisations. This is known as science diplomacy.
I conclude by saying that what worries and saddens me about this whole situation is that here we are talking about excellence and Britain being the best in the world, and yet my noble friend Lord Smith spoke about hate crime. I have lived in this country since I came here from India as a 19 year-old student in the early 80s. In 35 years I have never experienced any hate crime except for this year—and this year I have received it in abundance. Whether it is tweets, emails or letters, I cannot even repeat what people have been saying to me. It has saddened me. And yet this is the country that Liam Fox talks about opening up to the world. The world is laughing at us. They see us as closing up to the world, inward looking and insular, not open, not diverse, not plural, not tolerant and not brilliant. The headline of an Indian newspaper would read: Lord Bilimoria—this is not the Britain that I know and this is not the Britain that I love.
Baroness Garden of Frognal (LD)
My Lords, I too add my thanks to the noble Lord, Lord Soley, for introducing this vitally important debate. The only interest I can possibly declare is that I was once educated at and by Oxford, but I assure my old university that my mistakes are all my own.
At this, the tail-end of the debate, we have heard so many distinguished and expert speakers that it is a challenge for those of us speaking at this stage to produce any new evidence. However, I would like to add my voice in support of much that has been said. It is always a pleasure to follow the noble Lord, Lord Bilimoria, who brings such energy and enthusiasm in his support for universities.
In all the publicity and dialogue during the referendum campaign, too little notice was taken of the impact on our universities of severing links with the European Union, which have been so productive and valuable over many years, as we have heard from all around the House today. In fairness, not only did the Leave campaign not highlight the impact on universities, the Remain campaign did not speak up loudly enough either. It was apparent that university communities understood, as they tended to vote in large numbers to remain. They appreciated the value of all the many connections that the EU offers, for scholarship, research, cultural and economic reasons. We must remember that scientific research is one of the UK’s strongest assets.
That is one reason why my party is arguing for clarity over the Brexit negotiations and for Parliament and the people to decide, when the options are much clearer, whether the new deal is the one that the country really wants and needs. After all, the battle bus promise of £350 million to the NHS if we left the EU is not looking as though it will be a promise kept in the near future. So it is just possible that the Brexiteers’ sunny uplands may turn out to be not so sunny, nor indeed so up.
In an insightful article in the Guardian this week, Peter Scott from the Institute of Education set out some of the threats to universities, which we have heard again today. First, as this debate highlights, is the threat to the UK’s participation in European research programmes, access to funding and to student exchange schemes such as Erasmus. The Government have done nothing to reassure EU nationals, staff and students of their continuing welcome here. Yet, we know that teachers and researchers from the EU play a key role in maintaining the UK’s enviable position in global league tables. In a number of important disciplines, we need European students to fill deficits in domestic demand, particularly in science, engineering and medicine, as the noble Baroness, Lady Wolf, and my noble friend Lady Walmsley and others have set out. I repeat the question: what assurances can the Minister give of continued working rights for current EU staff and their dependants at UK universities and for those who take up positions during the transition period before the UK has left the EU? In the longer term, will universities be sure that they can continue to recruit the talented staff they need from all over the world without overly burdensome visa requirements?
We have heard from the noble Baroness, Lady Blackstone, about the importance of academic mobility, and the noble Lord, Lord Soley, mentioned the burdensome visa requirements that may well be a hindrance to some of those we really want to attract to our country. We can all be cynical about league tables, which we know can distort, mislead and be totally unreliable, but it is nevertheless gratifying to find that Oxford heads the global table of universities, with Cambridge and Imperial close behind. These positions are held by virtue of attracting talent from around the world, and notably from within the EU.
A further threat which Peter Scott described in his article, and which has been set out by the noble Lords, Lord Smith and Lord Bilimoria, is that the UK has established itself as a nasty country. Why should the brightest and best scholars and students choose to come to a country which is loath to welcome those in real distress and puts up barriers for genuine students, insisting that they be classified as immigrants and therefore included in the numbers that the Government are intent on reducing? We heard this from the noble Viscount, Lord Ridley, from the noble Lords, Lord Hannay, Lord Liddle, Lord Smith and others around the House. How can it be encouraging to know that the UK is reluctant to accept you because it wants to accept as few foreigners, including foreign students, as possible in order to meet an imagined ideal number? We urge the Minister to have students removed from immigration figures. That is logical. They are, after all, not here to say. The vast majority return home at the end of their studies. It is right and it makes economic sense.
We need to do much more to recapture our reputation as an open, friendly and welcoming country, which will be much more difficult once we have shut the door on partnership with our closest geographical friends and neighbours. I too support the importance of networks, which the noble Lord, Lord Willetts, my noble friend Lady Smith and the noble Baroness, Lady Dean, all referred to. The networks are as important as the funding. Other countries are not being slow in extending the hand of welcome to students who might well have chosen to come and study here.
Our withdrawal from the EU makes it even more important to increase and improve our ability to communicate with the world in languages other than English. Over the years, we have lost influence within the EU because not enough of our brightest and best opted to work in Brussels, and when they did they were frequently hindered by not having mastery of at least one and preferably more foreign languages. Without the umbrella of the EU, we are now on our own, negotiating collaboration, including on academic, trade and security matters, with countries where English is not the preferred language. What plans do the Government have for improving our language proficiency in preparation for our withdrawal from the EU?
Funding to keep us at the forefront of research in science, technology and engineering is of fundamental importance, but so too is funding for the ability to communicate internationally. Our universities deserve every encouragement and support in their promotion of modern languages. Networking is all the more effective when there is respect and fluency in people’s native languages. Within that context, I add my voice to others around the House on continued support for Erasmus and other programmes that encourage understanding, not only of other languages but of other cultures. There is immense value to our students of having the opportunity to live and study abroad. Exchanges promote international relations and understanding, and they in turn promote peace and security.
We heard from the noble Lords, Lord Hannay, Lord Rees, Lord Haskel and Lord Giddens, the noble Baroness, Lady Wolf, and others that we will shortly be receiving in this House the Higher Education and Research Bill. Sufficient unto the day—there will be time enough to scrutinise this controversial Bill in the coming months, but it is worth raising within this debate the fact that the Government appear intent on adding to the sector’s challenges by wishing to impose some astonishing and unprecedented changes on this, our most highly regarded of sectors. We shall hear more than enough about that Bill in good time, so I simply note that universities facing Brexit probably should be spared home-made challenges from an intrusive and unhelpful Government. I also note the comments of the right reverend Prelate the Bishop of Portsmouth on the dangers of seeking to rank universities’ teaching in gold, silver and bronze. The Girl Guides and the Boy Scouts have some good ideas, but this is possibly not a good one to apply to universities. As the noble Baroness, Lady Wolf, reminded us, the metrics for teaching excellence are extremely dodgy—I do not think that she used that word because it may be unparliamentary, but that is a fact.
The noble Lords, Lord Kakkar, Lord Mair, Lord Hannay and Lord Broers, referred to the learned bodies—the Royal Society, the British Academy and the Royal Academy of Engineering. We have in our country these amazingly highly regarded institutions and the Government would do very well to pay attention and to seek advice from the people they represent.
Our world-renowned universities are facing uncertain and difficult times and in this House we shall do what we can to encourage the Government to work with them to consult, support and not compound their difficulties—indeed, to meet the tests of the noble Lord, Lord Fox. This debate has enabled us to air some of the concerns and solutions, to ensure that our universities flourish into the future. I hope that our universities have heard the support that they have had from all around the House for their future well-being and our concerns for the difficulties that they currently face. I look forward to the Minister’s reply.
Lord Mendelsohn (Lab)
My Lords, I thank my noble friend Lord Soley for introducing this debate. It has been substantial, with a high degree of consensus across the House. We have heard many distinguished contributions from leaders in the fields of academia and research and in the administration of universities.
I have two interests to declare. The first is that I have a daughter at Leeds University and three other children yet to apply to universities because of their age. I have to confess that my eldest son, who is about to go through this process, recently needed and still needs some persuading to choose a UK-based institution, given the nature of where we are. That is not a situation that I thought I would be in, but to me that is quite alarming in showing how he sees the future of Britain, its connection with other people and as an open home.
The second—this speaks more to where I am—is that I am an investor in our science and research base. I believe very strongly in the strength that we have in this country, and I have put money to work in the great genius of people developing great businesses out of great scientific insights. I recently enjoyed visiting some of these facilities, particularly Harwell in Oxford. Harwell is a leading science and innovation campus in Europe. Some 5,000 people work there in more than 200 organisations on what is a 710-acre site. Organisations currently based there include: the Science and Technology Facilities Council, with £1 billion-worth of infrastructure; the Diamond Light Source’s synchrotron; the ISIS neutron and muon investigations facility; the Central Laser Facility; computer data storage; RAL Space; and the European Space Agency.
Located fairly close by is the Oxford Business Park—one of our largest business parks—and many businesses have been spun out of that tremendous facility. I remember going to see one business there with a group of others who were looking at investing in that business. We went into a very small but classic business park building. An American investor who was with us said that, in the United States of America, there would have been a three-hour journey into the middle of the desert for such a huge facility, with lights, for the very same thing. We much undervalue that which we have. In my area of interest, I share not just the concern expressed by the noble Lords, Lord Mair and Lord Paul, about how we energise our start-ups, but about how we effectively commercialise all the ideas and businesses that we have and make them world-leading. That has become a greater concern.
Since our Brexit decision, these issues have been thrown into sharper focus, especially the people dimension. As you walk across Harwell, you are met by people from many nations and nationalities—many different people who are researchers, technicians, engineers and people starting businesses. Some of those people, who hitherto saw their futures there in working on healthcare, medical devices, space, detector systems, security facilities and satellite enterprises, do not necessarily see themselves staying in our country any more. It is very important that we get the people dimension absolutely right.
As was pointed out early on in the debate, by the noble Lord, Lord Willetts, my noble friend Lady Blackstone and the noble Baroness, Lady Smith of Newnham, networks and internationalism are absolutely crucial to modern academic and scientific research. Since the 1980s, research has become rapidly international. In the UK, 15% of papers were co-authored in 1981; that figure is now over 50%. Of the UK’s international collaborations, 80% include an EU national. The European Union’s commitment to the development of science and technology, to become the greatest hub of excellence in the world, is an intentional policy for dealing with the consequences of having to change: to meet the needs and requirements of agriculture; to have a different ability in manufacturing; to spur innovation; and to trigger, in modern industrial economies, the right sort of economy. We have been in the driving seat of this process and that has been of great benefit to us, and therefore we have to face up to the tremendous challenges that Brexit brings.
I also agree with the point about government funding of science and technology, which has been stagnating. In many ways, we have piggybacked on the EU, and we have moved to around 0.5% of GDP, as has been raised. I share the concerns expressed by the noble Lord, Lord Kakkar, who first highlighted this issue, and those of my noble friend Lord Hunt, who agreed with him. I agree with the noble Viscount, Lord Ridley, that the private sector does not play its part in this, but I disagree that it is about EU regulation. Although that is an important consideration, it is not the fundamental issue. The noble Lord, Lord Bilimoria, put it well when he talked about our general R&D spend and HE spend compared with our peers. These have always been areas where the genius and great achievements that we have had have made us punch above our weight. We ought to be concerned, in a situation where we are facing difficulties, that we do not over-rely on those assets that we have been able to depend on hitherto.
Increasingly, we are hearing concerns expressed about the consequences of leaving. My noble friend Lord Liddle mentioned the problems faced by Lancaster University in continuing to participate, and there have been many similar reports. A famous one concerns the Department of Physics and Astronomy at the University of Sheffield, which was thrown out of an EU research consortium after the referendum. There are many of these stories that reflect the problem which we have to address.
The negotiations will be very important. We can be involved in a variety of projects. Withdrawal does not mean that we will have no form of activity, but in my view—to meet the test set by the noble Viscount, Lord Ridley—to leap ahead requires us to be more than inventive and more than just associated with these programmes, and indeed to do a lot more. The noble Baroness, Lady Garden, made a good point about the European projects that we have to remain involved in; that is tremendously important. Let us consider the sobering story of what has happened in Switzerland, which after its referendum faced a situation where was there a drop in students under the Erasmus programme, funding was withdrawn and access to initiatives was closed. Now, the Swiss pharmaceutical industry is losing its place because it is no longer able to participate in the EU’s Innovative Medicines Initiative. We have to make sure that we retain our place in these areas.
We welcome the Government’s extension of student funding for current research projects, but it is insufficient. Sticking your finger in the dam is not a long-term strategy. We have to think about what will need to be done in the future—a point made by many noble Lords. We also have to consider the European development funds which provide support for science parks, science-based initiatives and innovative businesses. Some €3.6 billion has been allocated to the UK for the period 2014 to 2020, of which very little has been spent thus far.
I welcome the decision of the High Court this morning to reaffirm the sovereignty of Parliament, and I hope that the Government think about this wisely and do not appeal it. I do not think that it is about blocking; it is about making sure that we deal with these challenges in the right way. As the noble Lord, Lord Paul, said, we need to be constructive. I hope, as many other speakers have said, that we make sure that we can see a detailed approach by the Government; they need to say more rather than less.
The huge degree of consensus and concern across this House on this merits the Minister setting out why there cannot or should not be—I hope that he will announce that there will be—a permanent or long-established framework for consultation and collaboration with those affected, as suggested by the noble Lord, Lord Willetts. We also need an approach to addressing the future of students, researchers and others. They are the people we need in our country, we want them to work here and we want students in our institutions in order to make sure that they are properly financed.
We need a clear statement of commitment to the ambition for universities and for research. That plays not just to the question of our ambition for those areas; it is also, as my noble friend Lord Liddle said, about what sort of country we want to be. My noble friend Lord Judd highlighted that it is about what sort of country we want to be not only in the south but in the north. That also accounts for the concern of the noble Lord, Lord Smith of Finsbury, about racism and xenophobia. The noble Lord, Lord Bilimoria, made an important point about how outward-looking we are and how others see us—what we say is not what they see, because what we have done is not the act of those who look outwards.
The Government should be very concerned about the Higher Education and Research Bill. We have heard many speakers, including the noble Lord, Lord Rees of Ludlow, my noble friends Lord Giddens and Lord Haskel, and the noble Baronesses, Lady Wolf and Lady Garden, comment that the Government ought to withdraw it and think about it again. I agreed with the noble Lord, Lord Broers, when he talked about the problems around putting Innovate UK into the research councils, while the right reverend Prelate made a good case for how to deal with the issue. The Government are running the risk of the Bill receiving a great deal of scrutiny and a desire for the use of the instrument of a Select Committee—used previously but only rarely—to make sure that we get the detail right.
Finally, I should like to stress the point about making sure that these matters are adequately covered in the Autumn Statement and in the industrial strategy, and how these things are linked. I turn also to the question put by the noble Lord, Lord Hannay. If the CEO of Nissan can get a meeting, why cannot the heads of our tremendously important and economically significant institutions get the same sort of access and the same sort of assurances?
Viscount Younger of Leckie (Con)
My Lords, I am grateful to the noble Lord, Lord Soley, for securing this debate on the potential impact of the UK’s withdrawal from the European Union on funding for universities and scientific research. This is an important topic which is of great interest to the House, as reflected by the number of distinguished Peers contributing today. I shall start by addressing the important and sobering point raised by the noble Lords, Lord Smith, Lord Bilimoria and Lord Mendelsohn, about hate crime. We have been working closely with the police at both the national and the regional level to monitor hate crime since the referendum result. Local forces have the necessary assistance and guidance to respond. On 26 July we published a comprehensive cross-government hate crime action plan, which includes education plans. Ministers and officials have met the ambassadors and high commissioners of EU states to offer reassurance.
As many noble Lords have commented, we are right to be proud of the strength of our research and innovation base and the quality of our universities. Research, innovation and knowledge are the drivers of our global competitiveness and a key source of economic advantage. Indeed, in one of her first major speeches as Prime Minister, Theresa May said that she wanted the United Kingdom to formulate a new industrial strategy. British science is one of our truly outstanding national assets, which along with our other areas of comparative advantage will surely be one of the main building blocks. I thank my noble friend Lord Ridley for mentioning that we should use the current changes as an important way of taking a leap forward and see them as an opportunity, although by no means being complacent about the issues we have to face.
We have continued to recognise that the result of the EU referendum has brought with it some uncertainty for our universities and researchers, and I am mindful of today’s news. I will go on to talk about the important steps that the Government have already taken to address those concerns, but it may be helpful to start by reflecting on the UK’s research and innovation landscape. I appreciated the historical perspective highlighted by the noble Baroness, Lady Wolf, and how the climate was somewhat different 20 years ago.
In the global league tables today, the UK has four universities in the world’s top 10 and 18 in the top 100. UK universities are home to both world-class teaching and innovative research. At this point I should like to address some of the concerns raised about the Higher Education and Research Bill, notably those expressed by the noble Lords, Lord Haskel, Lord Giddens and Lord Rees, and the noble Baroness, Lady Garden. We believe that the current higher education regulatory system is sub-optimal and was designed for an era of grant funding. It needs to be brought up to date. The reforms in the Bill will drive innovation, diversity, quality and capacity, ensuring that we remain attractive internationally. It will provide stability, putting in place the robust regulatory framework that is needed. It joins up the regulation of the market, which is essential to ensure that students are protected and that both they and the taxpayer receive good value for money from the system. The right reverend Prelate the Bishop of Portsmouth, the noble Baroness, Lady Garden, and the noble Lord, Lord Mendelsohn, raised the issue of the teaching excellence framework and the rating system. The TEF has the potential to enhance the reputation of UK higher education. Students will have a better idea of what to expect from their studies compared with anywhere else in the world, while providers with high scores in the teaching excellence framework will be able to market themselves even more effectively.
The noble Lord, Lord Broers, made a point along the same lines about why we are aiming to bring Innovate UK into UKRI. We believe this will bring benefits to business, researchers and the UK as a whole. It will help businesses identify partners and it will mean research outputs are better aligned with their needs. Researchers will benefit from greater exposure to business and commercialisation expertise. I look forward to addressing the details of the Bill when I help to take it through the House quite soon.
The UK science sector is one of the very best in the world, as many Peers have highlighted. It is highly efficient, competitive and internationally successful. The noble Lord, Lord Soley, highlighted the strong, essential interconnections that are so important with other countries. Within the G7 we have the most productive science base in terms of papers and citations per unit of GDP. As the noble Lords, Lord Kakkar, Lord Fox and Lord Mendelsohn, said, we punch well above our weight. With only 0.9% of the global population and 3.2% of R&D expenditure, we produce 15.9% of the most highly cited research articles, which provides a measure of the quality and impact of UK research. We have a long-established system that supports, and therefore attracts, the brightest minds at all stages of their careers. We will continue to fund excellent science wherever it originates and, importantly, ensure there is academic freedom to tackle important scientific questions.
As I have previously said, we appreciate that the result of the referendum has raised understandable concerns, given the multiple interactions between UK and EU institutions and structures that impact on UK researchers and universities. We have acted quickly to provide important reassurances. Just after the referendum result the Prime Minister wrote to Sir Paul Nurse, the Nobel prize-winning scientist and chief executive and director of the Francis Crick Institute, to reassure him of,
“the government’s commitment to ensuring a positive outcome for UK science as we exit the European Union”.
I reassure the noble Lord, Lord Trees, that this is a priority. I note his points about the importance of science and animal research.
As my noble friend Lady Eccles mentioned, in August this year the Chancellor committed that the Treasury will guarantee all competitively bid-for EU research funding that is applied for before our departure from the EU and is successful. The Government have communicated this announcement widely through our embassies, and we are grateful for the efforts of UK stakeholders who have been reinforcing this message through their networks. It is very positive for the sector that the nearly 4,000 UK participants currently working on Horizon 2020-funded projects can be reassured that they can continue to collaborate on excellent research and innovation.
This is not just about academic research; our innovative businesses are also doing well in securing Horizon 2020 funding—€411 million since 2014, putting us in second place in the programme. This August’s announcement should encourage businesses to continue to participate in applications for EU funding.
Lord Hunt of Chesterton
For how long will this continue? Will it just be to the end of the existing programme in 2020? That is the question nobody knows the answer to.
Viscount Younger of Leckie
It is a question that has been raised in the debate. I cannot give any further reassurances on that, but I and other Ministers have laid out exactly where we are at the moment. Clearly, discussions are under way. I am sure all will become clear.
I listened carefully to the speech of the noble Lord, Lord Broers, about innovation. He is right to distinguish between curiosity, or pure research, and research-linked productivity and industry. We will discuss these important matters when we discuss the Higher Education and Research Bill.
The Chancellor also confirmed that structural and investment fund projects signed before the UK departs the EU will also be guaranteed by the Treasury after we leave. Funding for structural and investment projects will be honoured by the Treasury, so long as they meet the value-for-money criteria and are in line with domestic strategic priorities.
To reassure EU students planning to come to study in the UK, we have announced that the rules regarding the student loans that EU nationals receive from the Student Loans Company are unchanged and remain in force. Therefore, current EU students and those starting courses in the 2016-17 and 2017-18 academic years who are eligible for student support will continue to be able to access this support for the duration of their course, even if this continues after we have left the EU. Student Finance England will assess these applications against existing eligibility criteria, and will provide support in the normal way.
Baroness Blackstone
My Lords, a number of contributors to the debate asked whether the Minister could say what will happen in 2018-19, which is likely to be before the UK exits the European Union, and after that. The Minister has given no answer to either of those questions.
Viscount Younger of Leckie
That is true. I am unable to give an answer; I can be candid about that. However, I reassure the noble Baroness that this is a very important point and that these matters are being discussed and will continue to be discussed as we move forward in this particularly challenging process.
We are also grateful to the European Commission for the swift reassurances it has provided. Commissioner Moedas said in July this year:
“As long as the UK is a member of the European Union, EU law continues to apply and the UK retains all rights and obligations of a member state”.
This means that we still have the same terms of access to European research funding, such as Horizon 2020, for as long as we are still a member of the EU.
Lord Liddle
Following on from my noble friend’s question, I point out that we will not have left the EU by the start of term in September 2018. Does the fact that EU obligations continue to apply mean that EU students will be eligible for British loans to come to our universities in autumn 2018? Will the Minister give us that assurance?
Viscount Younger of Leckie
I have laid out exactly what our guarantees can be, but I can only say again that I am unable to comment beyond those guarantees. I hope I have reassured the House that this is a very important matter.
Viscount Younger of Leckie
I can certainly write to the noble Lord and copy other noble Lords into a letter about this matter, but I fear I am not able to go further than other Ministers have gone. I understand the point that the noble Lord makes.
To continue on Horizon 2020, I acknowledge the enormous contribution my noble friend Lord Willetts made to the strength of the research base while he was Minister for Universities and Science. I understand that he played an important role in discussions that led to Horizon 2020 being a well-funded part of the EU budget and simpler for researchers to navigate. I am also grateful to my noble friend for his suggestions on how we can continue to collaborate with the EU on Horizon 2020. He raised one or two points, including the possibility of parallel funding. I can assure him that this will be part of those discussions.
Commissioner Moedas has also made it very clear that UK participants are not to be discriminated against when they apply for Horizon 2020 grants. He said:
“Horizon 2020 projects will continue to be evaluated based on merit and not on nationality. So I urge the European scientific community to continue to choose their project partners on the basis of excellence”.
The Minister for Universities, Science, Research and Innovation, Jo Johnson, continues to be in close contact with Commissioner Moedas. BEIS, the new department, working closely with all relevant departments such as the DfE, remains vigilant and open to any evidence of problems. As a reassurance, we have a dedicated inbox for people to send in details of any concerns. I know that the noble Lords, Lord Liddle and Lord Bragg, cited specific examples of where there may be problems. The noble Lord, Lord Bragg, also mentioned Leeds; my son graduated there this year. I noted with concern also the news from Cambridge about the 14% reduction in applications from EU students.
Although we have had some anecdotal evidence of people being asked to stand down from consortia or project-lead positions, there are no clear-cut examples specifying projects or consortia that have turned down UK participants. These anecdotes show that there has been some adverse reaction following the vote, but we also have anecdotal stories of UK researchers who were initially told that they were no longer welcome in consortia, but then later the position changed—possibly connected to the funding announcement. We are engaging with the people who emailed us to check whether any new or other issues are being experienced, because this is an important matter. The announcement on underwriting Horizon 2020 funding has led to a slow-down in people contacting us and we want to make sure they keep sharing their information with us.
I want to reference comments on Horizon 2020 made recently to the Higher Education and Research Bill Committee by Sir Leszek Borysiewicz of the University of Cambridge. He said:
“We are quite confident that we can deal with the assurances that the Government have given in the short term … We have not experienced what many institutions have experienced, with people not being asked to continue on grants”.
Looking to the future, we will work with all stakeholders to ensure that our universities and researchers are protected as the UK establishes its new position in the world. So how can we be sure that the UK continues to excel?
First, I say in response to the noble Lords, Lord Fox and Lord Lipsey, that EU nationals who have lived continuously and lawfully in the UK for at least five years have an automatic and permanent right to reside under EU law. EU nationals who have lived continuously and lawfully in the UK for at least six years are also eligible to apply for British citizenship if they would like to do so.
As mentioned earlier, what happens after Brexit is up for negotiation. We are clear that we need to understand the impact of any changes we make to the UK’s immigration system on the different sectors of the economy and the labour market, including in terms of the highly skilled staff, both academics and technicians, who underpin university departments and businesses. I know that the noble Baroness, Lady Blackstone, raised this issue and I hope that this gives her some reassurance that we are taking this matter extremely seriously.
Let me be clear that we recognise that EU researchers have contributed greatly to the diversity and talent base of the UK’s workforce. We hugely value the contribution of EU and international staff. This has been emphasised in recent statements by the Secretary of State for Exiting the European Union, where he has said:
“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”.
Secondly, we must ensure that excellent collaboration in cutting-edge research can continue with European and international partners—this important point was raised by my noble friend Lord Willetts and others. We are now more ambitious than ever to build global research partnerships that not only put the UK at the forefront of international research on emerging global challenges but support the economic development and social welfare of developing countries around the world. We should remember that academic and research co-operation in Europe predates the EU by centuries, and the community of European academic institutions has always been much wider than the EU.
The noble Lord, Lord Giddens, and my noble friend Lord Willetts asked what type of consultation the Government were engaging in on post-Brexit research funding. I can reassure the House that the Government have been talking extensively to stakeholders. Jo Johnson announced during last week’s Select Committee inquiry into similar issues that he would invite a number of senior representatives of UK research and innovation to a high-level consultative forum to discuss the opportunities and issues arising from the UK’s exit from the European Union.
Thirdly, we must ensure that UK researchers continue to have access to, and leadership of, world-class research facilities. We have access to major research infrastructures across the world, such as the Large Hadron Collider, in which the UK plays a leading role. We are a major partner in building new infrastructure such as the Square Kilometre Array, whose global headquarters will be based at Jodrell Bank—I think the noble Lord, Lord Bilimoria, raised that point.
Finally, we need to ensure a supportive funding and regulatory landscape. As a Government, we recognise the contribution that our world-class research base makes to our economy and well-being. This is why we have committed to protect the science budget in real terms. The reforms that we are introducing through the Higher Education and Research Bill will give us a best-in-class regulatory system for higher education, and UKRI will be a strong voice for UK research and innovation on the global stage.
I am a little short of time; I will address as many questions as I can in the time available. Otherwise, as the House would expect, I will write to noble Lords.
My noble friend Lord Willetts and the noble Lords, Lord Broers and Lord Kakkar, spoke of the concerns for science and innovation in relation to the new industrial strategy. It was mentioned that VAT changes might be made; for example, charges on buildings cohabited by business and universities. I can reassure the House that the Prime Minister, the Chancellor and the Business, Energy and Industrial Strategy Secretary are clear that building a productive, open and competitive business environment is vital. Key to this Government’s aims will be delivering a comprehensive industrial strategy that gets the whole economy firing. The objective of the industrial strategy is to deliver the Prime Minister’s vision of an economy that works for all. There are three key themes. First, we can look again at the regulatory environment. We have to work hard to make sure that the European framework covers excellent research and innovation—data protection is an example of that. Secondly, we can look afresh at how we optimise international collaborations, mentioned in debate today. Thirdly, we have an opportunity through the industrial strategy to put research and innovation at the heart of what we do.
I shall stop there. As I said, I will write to noble Lords addressing the good number of questions that were raised in this long debate.
Lord Soley
I think we all look forward to that letter, which I hope is a very full one. I thank profoundly just about every Member of this House for the thoughtful, insightful comments that have been made across the field. There is no doubt in my mind that scientific research and development are critical and they are one reason why this country has had such a leading role going back to the Industrial Revolution, when we were the first country to do that. We are continuing that process.
I do not want to delay the House, but I simply say to the Minister that he must have heard the concern in this Chamber and outside it about the uncertainty over funding and the ability of staff and students to move and keep up those transnational links that are so important to this area of society. Will he take back to Ministers, and particularly to the Prime Minister, how important that is? He might like to consider the need for a bespoke agreement covering science, research and development. There is no reason to think that the European Union wants a deal with the United Kingdom that is not also beneficial to it. It may be possible to reach a bespoke agreement at least on research and scientific development—the university aspects might be a little more difficult—but the Government need to move on this urgently if we are to maintain our position.
I am grateful to everyone, including to the Minister for his answers. I look forward to his letter.
Air Quality
(8 years, 1 month ago)
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The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Gardiner of Kimble) (Con)
My Lords, with the leave of the House, I shall now repeat in the form of a Statement the Answer given by my honourable friend the Parliamentary Under-Secretary of State for the Environment and Rural Life Opportunities, Dr Thérèse Coffey, to an Urgent Question in the other place. The Statement is as follows:
“Improving air quality is a priority for this Government and we are determined to cut harmful emissions to improve the health of the people that we all represent and to protect the environment. The UK currently meets the legal limits for almost all pollutants, but faces significant challenges in achieving nitrogen dioxide—NO2—limit values. We are not alone, in that 16 other EU countries are facing similar challenges.
We have already achieved significant improvements in air quality across a range of pollutants. However, transport is responsible for 80% of nitrogen oxides—NOx—emissions at the roadside in areas where we need to act to reduce levels. That is why transport has been the focus of our action on air quality. We have committed more than £2 billion to green transport initiatives, including supporting the early market for ultra-low emission vehicles between 2015 and 2020. The main reason for the difficulty in meeting NO2 limit values is the failure of Euro standards for diesel vehicles to deliver the expected reductions in NOx emissions in real-world conditions. Since 2011 we have been at the forefront of action in the EU to secure more accurate, real-world emissions testing for diesel cars.
The Transport Act 2000 gave powers to councils to introduce measures that would help on tackling air pollution. The national air quality plan for NO2, published last December, set out an approach to improve air quality and achieve compliance. We are mandating five cities to introduce clean air zones and targeting the oldest and most polluting vehicles. The consultation on this framework was launched last month to ensure that a consistent approach is taken.
The plan that we had, Mr Speaker, was based on the best available evidence at the time. We have been pressing for updates to COPERT emission factors and got these in September. We said that when we got the new factors we would update our modelling and that is exactly what we are doing.
I am writing to councils to ask them what they are doing themselves to tackle air pollution. Our local authority grant fund was launched in early October and we are encouraging all local authorities to apply. We will shortly be launching a consultation on policy options for limiting emissions from diesel generators. In addition, funding was announced last month to boost the uptake of ultra-low emission vehicles.
We accept the judgment of the court and will now carefully consider it, and our next steps, in detail. But legal proceedings are still ongoing, so I may not be able to answer the question of every honourable Member in detail. I can assure you, Mr Speaker, that this is a top priority for me. It is a top priority for the Secretary of State. As the Prime Minister said yesterday:
‘We have taken action, but there is more to do and we will do it’”.—[Official Report, Commons, 2/11/16; col. 887.]
My Lords, that concludes the Statement.
Baroness Jones of Whitchurch (Lab)
My Lords, I thank the Minister for repeating that Statement, but I am sorry to say that the Government’s handling of this issue has been a disgrace. It should never have ended up back in court. Scientific evidence is showing that this is a huge public health issue, with around 50,000 early deaths a year, so I pay tribute to ClientEarth for its determination to bring the Government to account on our behalf. It is not good enough to lay the blame on local authorities when we need robust national intervention to tackle this issue.
Can the Minister tell us what the new deadline will be for wiping out illegal levels of air pollution? Can he clarify what the Government have in mind? Can he confirm that there will be a nationwide network of clean air zones covering all polluted cities, not just the five announced so far? Will he confirm that discussions are now taking place with the Department for Transport to introduce urgent curbs on the use of diesel cars and commercial vehicles, which, after all, lie at the heart of this problem?
Lord Gardiner of Kimble
My Lords, I assure your Lordships and the noble Baroness that the Government and my department take air quality extremely seriously. We are well aware of the health consequences of this and that is why it is important that we get the plans right. We received the judgment 24 hours ago, and it is essential that we consider the next steps in the light not only of the ruling but of the recent updates on data on emissions from diesel cars. Indeed, we are already working on that, having received them at the end of September.
On timing, I hope the noble Baroness will understand that the judge has given the parties seven days to reach agreement on an order setting out the timetable for developing new plans, and we are liaising with ClientEarth to agree this. I hope the noble Baroness will therefore understand that I am not in a position to give a categorical timing, but action is already taking place and there are existing powers, as I said. We are working with the devolved Administrations and with the five cities where mandatory clean air zones are intended, and tackling the oldest and most polluting vehicles. We are also working with the Department for Transport and the Treasury together to seek ways of improving what is clearly a hugely worrying and unsatisfactory situation.
Baroness Featherstone (LD)
I thank the Minister for repeating the Statement, but I am sorry to say that I find it totally unacceptable for a Minister say that the Government have mandated five clean air zones when 50,000 people a year are dying. I seek an assurance about all the people who are dying who are not in those five mandated cities. How urgent does he regard this? The Statement says it is a top priority. Can the Minister assure me that the whole country will be a top priority and not just five cities?
Lord Gardiner of Kimble
I thank the noble Baroness. It is essential that we deal with the compliance area in the plans we are going to bring forward and, yes, it is well beyond five cities. That is where we were mandating action, because there was such a significant problem, but I would not for one minute want to suggest that all areas of the country having the current levels of air pollution is a satisfactory position, because clearly it is not. That is why, in 2011, when we were in coalition with the party of the noble Baroness, £2 billion was allocated for green transport initiatives. We are actually in a world-leading position on ultra-low emission vehicles, for instance. With that £2 billion we are seeking improvements. I know that everyone is frustrated—I share that—but we really do want to make progress on this.
Lord Smith of Finsbury (Non-Afl)
My Lords, while action on diesel, however feeble, is welcome, and while five cities is a start—although nowhere good enough—if the Government are serious about improving air quality, how on earth can they have taken such a confident decision about the expansion of Heathrow, where nitrogen oxides are already in serious breach of health limits?
Lord Gardiner of Kimble
My Lords, the Government believe that the Heathrow north-west runway scheme can be delivered without impacting on the UK’s compliance with air quality limit levels, with a suitable package of policy and mitigation measures. Indeed, final development consent will only be granted if we are satisfied that, with mitigation, the scheme is compliant with our legal obligations.
Lord Hunt of Chesterton (Lab)
My Lords, would the Minister like to consider that in London there is a system called airText, which provides warnings for people, particularly those suffering from air pollution? It seems to me that that could be done quite immediately. The financial support and the arrangements need to be expanded, but we could roll it out throughout the country and if people know that tomorrow is going to be bad, they can then take steps. It seems to me that that should be done urgently—and of course, it is done in other cities.
Lord Gardiner of Kimble
My Lords, in order to give the noble Lord full details, I will take that point away, but it is very important that we provide information, particularly for vulnerable people. Given the air quality zones and the knowledge that Defra has on air quality across the nation, I suspect that that is within scope and that we could do it, but I will take this point away and inform the noble Lord and others about it.
Lord Whitty (Lab)
My Lords, does the Statement mean that the Government now accept that the national air quality strategy produced by the Minister’s department was found by the court, in what has been a bad week for the Government in court, to be flawed in its evidence and lacking in ambition to meet the targets? Although the Government endorsed the five cities that the Minister referred to, did not the Minister’s own officials recommend that clean air zones should be established in more than 20 cities? Lastly, 60 years on from the Clean Air Act—probably the only remaining positive outcome of the Eden Government—do the current Government accept that we need a new clear air Act, and possibly a clean air commission, as recommended by Clean Air Alliance UK? I declare an interest as the president of Environmental Protection UK, one of the members of that alliance.
Lord Gardiner of Kimble
My Lords, I would be the first to say that I think that the Clean Air Act and some of the improvements we have seen since that time have shown that Governments of all persuasions have taken this matter very seriously indeed. As I say, we got the judgment 24 hours ago and it is very important that we consider all the measures. We accept the judgment, and we now have to work speedily and constructively to ensure that we remedy a situation that we all wish to be much improved.
Lord Hain (Lab)
My Lords, will the Minister indicate how, under this ruling, diesel cars purchased in recent years that do comply with EU standards can themselves be phased out?
Lord Gardiner of Kimble
Obviously, we will have to look at diesel. As I mentioned earlier, the updates we received on emissions at the end of September mean that we are going to be looking at this area very carefully indeed. The most important thing is that we wish to target our work at the oldest and most polluting vehicles. We have been working on that with the five cities, but many other cities will be working on it and we need to work together because we need to get it right this time. I assure your Lordships that the department and its officials want to make this a lasting settlement on this issue.
Lord Greaves (LD)
My Lords, local authorities throughout the country have a duty to test pollution levels—for example, on main roads passing through their towns—and they can declare zones where the air quality is not high enough, yet they have no real powers to do anything about it. What is the purpose of this exercise?
Lord Gardiner of Kimble
My Lords, my understanding of the Transport Act 2000 is that local authorities do have the powers. Referring to the question of the noble Lord, Lord Whitty—which I should have answered more fully—we believe that there are existing powers for local authorities to set up clean air zones. The ability of charging authorities to introduce a clean air zone was clearly set out in the Transport Act 2000.
Education: A-levels in Creative Subjects
(8 years, 1 month ago)
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Baroness Brinton
To ask Her Majesty’s Government what action they intend to take to ensure that exam boards continue to offer a range of creative subjects at A-Level.
Baroness Brinton (LD)
My Lords, I asked for this debate because of the decision of the awarding body AQA to discontinue its offer of A-levels in history of art and archaeology, as well as a reduction in the offer and take-up of certain creative and arts subjects at A-level, which has sparked a fresh debate on what is offered in the current curriculum. Does the Minister agree that a good range of subjects being taught in schools and colleges is very important to broaden the learning horizons of all our young people? His own Government’s current mantra is “a Government that works for all” so we will assume that that means an education that works for all, too.
How important is it, therefore, that the offer includes creative subjects? Part of the UK’s problem has been a narrowing down of the curriculum post-16 because of the gold-star standard of A-levels compared with other international comparators, which in the past has resulted in far too many students choosing either arts or sciences. To some extent, AS-levels broadened that base for year 12 but, compared with the USA, France, the Netherlands and Scotland, with its Highers system, the English system remains narrow in its offer. David Laws, as Schools Minister, introduced Progress 8, an accountability measure, to ensure that schools are rewarded for offering a broad and balanced curriculum. But the reality is that the opposite is now happening.
It is worth looking at the specific problem of the history of art A-level. It is true that numbers for the take-up of history of art are low, especially from students in state schools. AQA says that in 2016 there were 719 entries at AS-level and 834 at A-level. These entries were from a total of 99 schools and 20 further education colleges. A mere 16 out of more than 3,000 state secondary schools, plus a further 15 sixth-form colleges, currently offer it. By contrast, more than 90 fee-paying schools offer the subject. Michael Gove was quick via Twitter to claim no responsibility for history of art’s demise.
The history of art A-level content was reformed and it exists if another awarding body decides to offer it. Other creative subjects have also been reformed and are ready for teaching. Their respective creative communities will be promoting them to schools, no doubt, but is this enough? Surprisingly—and perhaps ironically—it was Mr Gove who posed the very serious question in last week’s discussions on history of art. He said:
“Why were so few state schools offering the subject? Why aren’t more heads anxious to promote it? Who on earth thinks it’s ‘soft’—not me”.
Perhaps for Michael Gove nothing with history in its title can be soft—not sure about the art bit, though.
However, there is a larger and more strategic picture here. Frankly, I think it arises out of the EBacc culture, the Government’s focus on STEM and, perhaps most critically, the funding mechanisms. Since the introduction of the English baccalaureate—compulsory in state-funded secondary schools—the take-up of creative subjects has declined. Why? The culture of targets that has been set by EBacc means that far fewer students now take those creative subjects at GCSE. Music is a case in point. The Incorporated Society of Musicians carried out research earlier this year which found that just over a third of our secondary schools have no pupils taking GCSE music at all. As a pupil, you cannot do A-level music without a good A* to C grade in GCSE music; nor will a school attract excellent music teachers without a keen commitment to providing the academic qualifications for students with musical aptitude, not just some general music provision. The root of the problem is that music is not an option within the rigid EBacc. Other qualifications, such as the international baccalaureate, are as rigorous but more flexible in subject matter, allowing students and schools to choose topics and subjects within a framework. That is why the Bacc for the Future campaign championed by the noble Lord, Lord Lloyd-Webber, and many other professional musicians and teachers is so vital.
One in 11 of jobs in our society is creative but this year alone we have seen an 8% drop in the uptake of arts subjects from the previous year. When I was chair of the Cambridgeshire Learning and Skills Council just over 10 years ago, there was already considerable concern that school sixth forms might be too small to offer a broad enough A-level curriculum. The development of effective and larger sixth-form colleges seemed to be a good response. The economies of scale meant that students could mix and match A-levels and AS-levels across the arts and sciences. But recently the further education sector has been managing severe and continuing budget cuts. The Sixth Form Colleges Association reports that the sector’s funding is 20% lower than funding for 11 to 16 year-olds, and nearly 48% lower than for universities. A recent survey it carried out showed that the cuts in funding have resulted in the majority reducing or removing the extracurricular activities available to students, including music and drama; two-thirds believe that the funding will not be enough to support students who are educationally or economically disadvantaged; and colleges are struggling to provide 15 to 17 hours a week of tuition per student, whereas funding in Singapore provides for more than 30 hours a week. Inevitably, this reduces the range of courses in the UK.
There are many reasons for this decline and some of them are, as the Department for Education is keen to point out, cyclical. But we are in a perfect storm which is now severely impacting on arts and, more specifically, creative subjects post-16. Head teachers are thinking about their schools’ performance tables. EBacc subjects get priority because they know that is how their schools will be judged, reducing options for post-16 students whose options were limited at GCSE. Funding for teacher training on EBacc core subjects is also a priority, resulting in a supply crisis in certain arts subjects. Students and parents are told by schools that EBacc subjects are where they need to concentrate, without understanding the limitations on future options. Although Ofsted is open to the thinking that an outstanding school is one that also offers creative subjects, it has to follow the government framework. As the Creative Industries Federation’s report Social Mobility and the Skills Gap observed:
“In 2015, more than a quarter of students in academies (28 per cent) took seven GCSEs or fewer. If such students have to take the EBacc in future, there would be no space for other subjects, even if these subjects were offered”.
A year ago, the DfE published its consultation on EBacc implementation and laid down a target of 90% of students taking the EBacc. The education and creative industries communities responded to explain the negative impact that that target could lead to. We still await the Government’s response to this consultation.
The targets and focus within the EBacc are beginning to distort priorities, and the unintended consequence of its narrow focus is now having a direct impact on what post-16 institutions offer. Within a short few years, the capacity of our workforce emerging from apprenticeships and degrees will be evident in the labour market. So I ask the Minister: do the Government still believe that students studying A-level need the breadth of subjects offered, particularly in arts and creative subjects, given the current focus on STEM subjects? Will the Government drop the target of 90% of children doing the EBacc, as long as schools can demonstrate that pupils are achieving good attainment targets and progression? What are the Government doing to remedy the funding crisis in the post-16 sector, most particularly in sixth-form and further education colleges, which have been unfairly targeted compared to the rest of the education sector? Will the Government continue to press for Progress 8 in full, ensuring that schools are held accountable for a truly broad curriculum? Will the Government publish a progress report on the Henley review of cultural education?
In recent months, I have watched the dedication and skills of clinicians, healthcare and associated professionals who are caring for my granddaughter at the wonderful Evelina children’s hospital. Almost everyone I have seen, from consultants through to play workers, from speech and language therapists to teachers, visiting writers, musicians and artists all use creative skills and techniques in what they use to heal our children. It is not just medicine. The toys designed to stimulate children at some of the worst times in their lives, even if they are digital and engineering-based, have all been designed by people who understand arts and creativity. It is not just engineering. Creativity is everywhere about us and as important as the vital skills of science, technology, engineering and mathematics which we need in UK plc. There is one important letter missing from STEM; it is “A” for arts. Without a core place for arts and creative subjects, our country cannot steam ahead into the future. It must also be at the heart of our education system.
Baroness Nye (Lab)
My Lords, I thank the noble Baroness, Lady Brinton, for initiating this important debate about ensuring that there is a wide range of creative subjects at A-level. As she put it so well, this is not only vital to the pipeline that feeds our creative industries but essential to the life of our nation and makes us who we are. I make no apologies for fearing that the Minister is going to hear the same song sung many times in this debate, although he may have got used to that in the previous debate.
I, too, received an email from AQA explaining its decision. I accept that it was a decision not taken lightly but the fact remains that, even though the take-up of the history of art A-level was small, it was an important educational opportunity to get into a creative world that many students may never have considered. Given the long campaign of the Association of Art Historians to increase awareness of the importance of art history and to expand its uptake in schools and at university, this is a worrying loss. I hope that the Minister will be able to update us today on whether an alternative awarding body has been found.
The Government need to ask themselves why there was such an uproar from the creative community about the loss of a single, albeit hugely symbolic, A-level. It has been put to me that it was seen as part of the creeping dismantling of creative and cultural education. The Government are seemingly blind to the unintended consequences of their aim to get a 90% take-up of the EBacc by 2020 and the Progress 8 measures, which sideline creative subjects, because the subjects taken at GCSE will of course affect the choices at A-level and what happens afterwards. Numeracy, literacy and academic rigour are of course essential to our future success but creating a false hierarchy between subjects taught in our schools is not the way forward. It is a common phenomenon that what is not measured is not valued. This has meant that secondary schools are faced with putting less time and fewer resources into creative education, in a bid to climb up the league tables. One way in which the Government could prevent this is by making it impossible to get an excellent rating from Ofsted if there is no significant cultural offer. I hope that the Minister will say something about why the Government are against that.
Surveys by the National Society for Education in Art and Design and the Cultural Learning Alliance show that there has been a marked reduction in curriculum time, that courses have been lost and that there are significant shortages of teaching staff. This has resulted in a significant decline in the number of students taking GCSE, AS and A-levels in creative subjects, as shown in this year’s figures where the lowest percentage of students sitting art and design A-levels in 10 years has just been recorded. Counter to the culture White Paper’s claim that:
“Access to cultural education is a matter of social justice”,
the Creative Industries Foundation has found that schools with a high proportion of pupils eligible for free school meals have been twice as likely to withdraw arts subjects. This is an out-of-date and old-fashioned curriculum, almost identical to what was in place in 1904—although that curriculum included drawing.
The new Digital and Culture Minister said recently that in post-Brexit Britain:
“This nexus of art and technology is how Britain will pay her way in the 21st Century”.
However, it has been said that:
“This narrow academic curriculum will severely limit access to technical and creative subjects of the very kind needed in our new digital age”.
Those are not my words but the words of the architect of the national curriculum, the noble Lord, Lord Baker of Dorking. In a recent report for the Edge Foundation he called, among other things, for the Government to introduce a broader EBacc which would include creative and technical subjects as well.
At a recent meeting of the All-Party Parliamentary Group on Art, Craft and Design in Education, of which I declare that I am vice-chair along with the noble Earl, Lord Clancarty, we had a presentation from the Derby High School, which was the very first science and arts college. The students conveyed to us their thoughts on their education. These are some of their words:
“We are on an incredible journey to who knows where … Fast forward to 2025 … We will be applying for jobs that don’t even exist back in 2015 … In fact experts believe that almost 50 per cent of occupations today will be redundant … So how can we be educated for those unknown jobs?”.
We were told by the Derby High School that it believes its pupils should be educated to see science and the arts as complementary, and that each discipline has something fresh to offer the other when taught holistically. In that way, those students are being educated for those unknown jobs. Those students are right: automation and artificial intelligence may make today’s jobs redundant but they will not replace creativity.
I hope that the Minister will listen to those students—I am sure that they would come to give him the presentation if he wants—and to his noble friend Lord Baker of Dorking. I hope that he will listen as well to the very many educationalists, practitioners and employers who are asking the Government to change their mind on the EBacc and ensure that the pipeline of creative talent is nurtured and not damaged irrevocably. I also hope that in his response today, he can go a little further than the “in due course” answer we keep getting as to when the Government are to publish the results of the consultation on the EBacc. I also hope that the Government will use the consultation process to change the situation where England is the only nation in the UK to have no national plan ensuring that all children and young people are offered a high-quality cultural and creative education. I very much look forward to his response this afternoon.
The Earl of Clancarty (CB)
My Lords, I thank the noble Baroness, Lady Brinton, for her excellent introduction to this debate. Following the announcements of the discontinuation of history of art and archaeology A-levels on 12 October—three weeks and one day ago—there was an immediate outcry, which has not died down. Yet so far we have had no satisfactory response from the Government, so today I will listen to the Minister’s answer with great interest. This outcry is all the more remarkable—tens of thousands have signed petitions and hundreds have written to the AQA—considering that relatively few students presently study either of these courses. I will argue that many more could, yet it is clear that the value of these subjects to the country as a whole is the more significant consideration.
For instance, Mike Heyworth, director of the Council for British Archaeology, has said that the decision to discontinue archaeology is “disastrous”, telling the Times that this is,
“just at a time when we were looking to expand our support for the revised A-Level and its link with apprenticeships”.
The Royal Academy, the Courtauld Institute and many schools are among those who criticised the art history decision. Deborah Swallow, director of the Courtauld, has said:
“History of art is a rigorous interdisciplinary subject that gives students the critical skills to deal with a world that is increasingly saturated with images”.
Simon Schama tweeted,
“this government determined to impoverish the next generation”.
It is difficult, if not impossible, not to see such developments except within the wider context of the more general downgrading of the arts within the school educational system. Last year, for example, we also lost creative writing as an A-level. We also have a GCSE system, the EBacc, referred to by the noble Baronesses, Lady Brinton and Lady Nye, which excludes arts subjects from the core subjects. This year that has already led to a drop of 5% in take-up in art and design subjects, and it is having a detrimental influence on the teaching and perception of arts subjects at every key stage. On the subject of the EBacc, can the Government give further news of when they will respond to the consultation, since it will be one year this Wednesday since it opened?
One of the reasons given for the discontinuation of art history is the number of students studying it, yet teachers are repeatedly saying that the course is so popular that they have to cap the numbers. The BBC reports Godalming College, a state sixth form, as saying this, and Rose Aidin, who runs the A-level course at the Wallace Collection, says that there is a waiting list for this course which includes state school students. This again raises the issue of what subjects are encouraged to be studied in our state schools as a whole and whether the demands from students are being properly met.
A criticism of art history that has been made, notably by the art critic Jonathan Jones, is that it is a so-called posh subject. It is true that around 75% of students come from private schools, but this still leaves a quarter of students from state schools. If the course is cut, state school children will be barred for ever. Private schools will still run art history courses, and they will be right to do so to maintain the balance between arts, humanities and sciences which is increasingly denied within the state school system. Private schools will then own the subject, and their students will have the advantage in continuing on to degree level despite what AQA has said to the contrary. Again, this will be part of pushing the arts further into the hands of the better-off, which is already happening with music and drama.
Indeed there is nothing that says that art history or indeed any art subject is inherently posh. In 2013, in a talk on global citizenship Sir Nicholas Serota said:
“Art is a fundamental part of the public realm. In their work, artists express ideas, attitudes and beliefs. Often, these are central to politics, society and economics”.
This is true of all ages, and visual literacy should, in the 21st century, be a central aspect of our education.
One irony about the history of art A-level is that the new syllabus is intended to appeal to a wider range of students and to cover a wide range of cultures, as it is concerned with art on a global scale rather than concentrating on the history of western art. Learning about the arts is inherently about reaching out to other cultures, the importance of which, in our current more insular climate, we are at risk of dangerously underestimating.
The provision of creative subjects in primary schools and at key stages 3 to 4 lays the foundations of a rounded education which will give children the most informed basis for making a more specialised choice, a choice which should be as wide as possible if students’ needs and capabilities are to be fulfilled. Yet, in recent years, we have been cutting down on that choice. Justine Greening said last week that girls need to be encouraged into STEM subjects. A lot of them are studying arts subjects and would like to continue to do so. We could just as easily turn this question around and ask where are the boys in arts subjects. STEM needs to be expanded to STEAM.
AQA has also cited as a prime reason a lack of competence in marking art history and,
“the complex and specialist nature of the exams”.
I do not believe for one moment that there is not the expertise in this country to address this. Will the Government intercede on this matter in particular? In the end, it is not AQA which should be held responsible. The Government are responsible for our education, and they need to be held to account.
I do not know what the Minister is going to say about the future of the threatened A-levels. I hope he will not hide behind the reasons given by AQA and that he will supply us with good news about the continuation of these subjects that will at least make one or two of our arguments redundant.
Lord Clement-Jones (LD)
My Lords, I applaud my noble friend Lady Brinton for initiating this important debate, and I make no apology for covering similar ground to noble Lords who have already spoken.
The dropping by AQA of the history of art A-level forms an important part of the worrying context of the debate today. AQA said in its briefing that, although it recognises the huge importance of the study of the history of art, in the process of developing and obtaining accreditation for its new A and AS-levels in history of art, it had concluded that the new qualifications, developed from the Government’s criteria, would be extremely challenging to mark as a result of the large number and specialist nature of the options creating major risks when it came to awarding grades safely. I interpret this to mean that AQA’s decision to drop history of art A-level was partly based on the fact that there were insufficient experienced examiners. This rightly had the Sunday Times art critic Waldemar Januszczak choking on his carpaccio.
The second reason appears to be the low number of students taking the subject. As AQA said, these issues are exacerbated in the context of very low student entry numbers for these key stage 5 qualifications. Why is that? As my noble friend said, since the introduction of the English baccalaureate, we have seen a decline in the take-up of creative subjects. I shall add only one fact and figure to my noble friend’s dismal facts and figures: 21% fewer arts GCSEs were taken in 2016 compared to 2010. The provision of creative subjects has fallen most significantly in schools with a higher proportion of pupils on free school meals. It is clear that despite assurances by successive Secretaries of State for Education, the introduction of the English baccalaureate has sent a clear message to schools, teachers, parents and students about which subjects are seen as of value. For the sake of completeness, I should add that AQA is adamant that this decision is not driven by commercial or financial factors.
There is great concern at the decision to drop this A-level. The Association of Art Historians has commented:
“The decision to withdraw History of Art at Key Stage 5 marks a considerable loss to young people’s access to—and understanding of—a range of different cultures, artefacts and ideas”.
It also said that the symbolic space,
“the subject occupies within the school system is also fundamental in developing awareness of art history at undergraduate level and beyond”.
It is that “beyond” that creative industry leaders, in all disciplines, are worried about. These industries are grappling with some real issues, particularly skills gaps and shortages. For example, several creative occupations are currently featured in the tier 2 Migration Advisory Committee’s shortage occupation list, which is for non-EEA recruits. One can only imagine how this will look if there is a hard Brexit. Universities specialising in creative industries are keen to recruit their students from the widest pool possible, because talent and skills in these industries are at a premium.
There can be no argument about the importance of our creative industries. They are celebrated for outstanding economic performance in addition to their contribution to the UK’s culture and soft power. The Prime Minister herself has recognised our creative industries are a key strategic sector. For example, the success of UK television and film production, highlighted in official government figures last week as one of the,
“best performing sectors of the UK economy”,
which has helped to,
“maintain growth in a time of post-Brexit vote uncertainty”,
is attributed not only to the tax breaks that the sector enjoys but to the skills and talent base for which it is internationally admired. We simply cannot afford to lose this.
We need therefore to ensure that our education system supports the sector and that a good range of relevant creative subjects are taught in schools. As the Creative Industries Federation’s recent paper on the possible impact of Brexit, mentioned by other noble Lords, points out:
“Long-standing skills shortages in the creative industries stem from inadequate training and provision at schools … Brexit will compound this problem … It is crucial that education and training policy is formulated with a proper understanding of the needs of industry”.
How will the creative industries flourish if creative subjects are elbowed out of the curriculum? These subjects are opening horizons and signposting to possible careers. They can accelerate learning, attainment and success in students following a more traditional academic structure—including the so-called sought-after STEM subjects. My noble friend referred to the Creative Industries Federation’s other paper last month on the creative education agenda, which recommended four matters to the Government. It has done us a service with those recommendations. First, it says:
“Drop the 90 per cent target … The EBacc should not be the headline assessment measure for schools, but used as part of Progress and Attainment 8”.
Head teachers would be able to offer creative subjects as part of a balanced curriculum and it would send a clear message that the wide variety of skills and knowledge that they represent are important to our economy and our society. Secondly:
“Limit ‘outstanding’ to schools that warrant it”,
a point made, I think, by the noble Baroness, Lady Nye, and my noble friend. It goes on:
“A school must teach at least one creative subject, in lesson time, in order to be eligible for an ‘outstanding’ rating”.
Thirdly:
“Audit the skills gap … The Department for Education should conduct a proper audit of the skills and education needed by the creative industries as part of an industrial strategy”.
Fourthly, and finally:
“Adopt proper careers advice … The Government should work with industry to launch a sustained national campaign demonstrating the range of jobs in the creative industries and the subjects that lead to them”.
These are all sensible proposals and should be adopted. I look forward to the Minister’s reply.
Lord Bilimoria (CB)
My Lords, yesterday, I drove down from the University of Birmingham, where I am proud to be chancellor, and spoke to my mother. She is a proud graduate of that university, as were her father and brother. She studied history of art there, and said to me that it changed her life. It introduced an appreciation of the arts for ever, which she then passed on to her children. I thank the noble Baroness, Lady Brinton, for initiating this debate.
Under the headline, “Top experts’ letter pleads for art history A-level”, the BBC reports that:
“Hundreds of academics have signed an open letter to an exam board, condemning plans to axe art history A-level … The decision to cut the A-level comes when ‘society has never required its insights more’, argues the letter. AQA said the change ‘was not about money or whether history of art deserves a place in the curriculum’”.
The AQA is the only exam board to currently offer the art history qualification. The decision will result in a subject of profound social, cultural and economic importance disappearing from the UK A-level landscape. There were 220 signatories, ranging from representatives from the University of Oxford, Sotheby’s and the Courtauld Institute of Art, to emerging art historians.
A reformed history of art specification, which was due for first teaching next September, would have given students the opportunity to study the most pressing social and political issues we face today, from war to environmental change, from identity to migration, played out through the visual and material world. It was an exciting and inspiring prospect. The plan was to support and encourage a greater number of schools and colleges, particularly in the state sector, to offer the subject to 16 and 18 year-olds. The exam board’s decision not to go ahead represents a vital loss for students. According to the letter:
“By denying young people access to the study of art history at a vital juncture in their lives, the AQA decision will actively discourage the next generation from pursuing careers in the arts and place current successes in real danger”.
In the 2015-16 academic year, as we have heard, 838 students—fewer than 1,000—took A-level history of art, with 83% attaining A* to C grades and 10.5% gaining an A*.
The decision comes amid—we must remember this—a series of changes to the curriculum set by our infamous former Education Secretary, Michael Gove, who proposed cuts to the number of creative and arts-based courses to make way for more challenging, ambitious and rigorous subjects. What was he thinking? Can the Minister confirm that other subjects to be axed include statistics, classical civilisation and archaeology? Many of these are not available on any other boards. The Association of Art Historians said that the decision could have a detrimental effect on the wider industry, as students would be far less likely to gain an interest in or gain access to a subject if it was no longer made available to them before the higher educational stage.
Hear the reaction from experts. Simon Schama tweeted:
“Art history A level axed as ‘soft’. SOFT?? tell that to Kant, Hegel, Ruskin, Burckhardt, Panofsky, Schapiro and the rest”.
Sir Anthony Seldon, a friend of mine, former master of Wellington, currently Vice Chancellor of the University of Buckingham tweeted:
“Rembrandt weeps. Can you believe that our history is no longer being offered at A level? Philistines must not prevail”.
In a statement, the AQA board said that the decision had not been made lightly, but that the subject was too complex:
“We’ve identified three subjects—Archaeology, Classical Civilisation and History of Art—where the complex and specialist nature of the exams creates too many risks on that front. That’s why we’ve taken the difficult decision not to continue our work creating new AS and A levels in these subjects”.
Does the Minister agree that that is pathetic?
“Why I don’t buy the argument that History Art A-level was axed for being ‘soft’” is the title of an article by Laura Freeman. She writes:
“Soft? Soft? History of Art is as soft as Carrara marble”.
This decision should be a spur to offering history of art in all schools: state, grammar and academy. It should be a wake-up call. The AQA has confirmed that it will not be offering it, but EdExcel might come in as a white horse. Does the Minister know and can he offer us some encouragement?
The noble Baroness, Lady Brinton, spoke about creativity. I was told throughout my childhood, through all my schooling, “Karan, you are doing well academically. Keep going, but you are not creative”. Why? Because I was useless at art. I started piano. At grade 1, I was told, “Karan, give up; you are tone deaf. You are not creative”. Throughout my schooling, college and universities, I thought I was not creative. Then I started my own business. I realised that one of the most important skills of an entrepreneur is the ability to be creative and I had it in abundance, but it had been wasted all my childhood. Now, when I give talks around the world and I ask audiences, “How many of you think you are creative?”, half the hands go up. Just imagine if 100% of the hands went up. It would encourage creativity in our schools from primary level all the way through. The GDP of this nation would double.
There are many reasons why it makes sense to encourage the creative industries. The arts make self-starters, develop emotional intelligence. The arts are stretching. Arts students are highly sought after by employers. Arts reach the parts other subjects cannot reach. Arts reach the students other subjects cannot reach.
Look at the response of the University of Cambridge to the decision. It deeply regrets the decision by AQA and says that it is really damaging. It states:
“The cultural and creative industries are one of the UK’s greatest selling points”,
and,
“a mighty economic engine … Art history is a rigorous, ambitious and highly vocational subject which should be open to students of every background, and celebrated as an essential tool to enable greater understanding of cultural life in both the UK and abroad”.
Art History Link-Up states:
“Only eight state schools in the country currently offer History of Art”.
We need to change that. Our museums are the best in the world. The Tate Modern has 4.7 million visitors. The National Gallery has 5.9 million visitors. The Victoria and Albert has 3 million visitors. The Ashmolean in Oxford has almost 1 million visitors. The Birmingham Museum and Art Gallery has almost 1 million. This is amazing. This is not elitism.
The criticism is that history of art should not be there because it is elitist. I spoke about Cambridge because I chair the advisory board of the Cambridge Judge Business School. Birmingham University has the famous Barber Institute, one of the finest University museums in the world. Over the past two years, 95% of Birmingham’s art historians have secured a graduate-level job or further study within six months of graduation. The DCMS report on the creative industries estimates that they account for 5% of Britain’s GDP. It is much more than that if you include everything that comes within the history of art.
To conclude, my daughter Zara is at Wellington College studying history of art. She came here on a visit with her teacher Mr Rattray, who studied history of art at Cambridge. When I took the students round, I learned more from Mr Rattray and the students about the architecture, history and art of our Parliament than I had learned in 10 years. That is the brilliance of the subject. Do you know what my daughter said to me when AQA made its announcement? “But Daddy, he is going to be out of a job”. We cannot let that happen.
Lord Berkeley of Knighton (CB)
My Lords, I am most grateful to be allowed to speak briefly in the gap. I absolutely endorse what we have just heard, as well as the concerns about music articulated by the noble Baroness, Lady Brinton.
There are two particularly important dividends from giving students access to music and the arts. The first is social. As a schoolboy, I have to admit, I was a late developer academically—almost embarrassingly so—but my music master, Mr Lambert, recognised a musical spark of promise in me and guided me through O-level and A-level music. This gave me respect from my peers and, much more importantly, self-respect—a feeling of achievement. It set me on the path to where I am today as a composer. I want every young person to have this outlet.
The other dividend is economic. The Government often, rightly, congratulate the creative economy for what it contributes to the Treasury, so surely it is vital that they go on creating access, for this generation and the next generation of creative people, for what they will bring to the Treasury of this country.
Lord Watson of Invergowrie (Lab)
My Lords, I congratulate the noble Baroness, Lady Brinton, on securing the debate and for her excellent opening speech, which set the tone very effectively.
“Whoever neglects the arts when he is young has lost the past and is dead to the future”—
a truism if ever there was one. Those are the words of the playwright Sophocles, written around 2,400 years ago. Just four years ago, those very words prominently began the Government’s response to the Henley review of cultural education. Sadly, somewhere along the way since 2012, it seems that the Government have lost their belief in the value of the arts and creative subjects in schools.
This issue has come to prominence largely because exam boards have dropped history of art and archaeology A-levels, as noble Lords have said. These have always been very much minority options that not many students have had access to, but the fear is that this is merely the tip of a sizeable iceberg. Squeezed school budgets, a growing emphasis on the STEM and English baccalaureate subjects, and government reforms of qualifications are reshaping what our young people study.
Ministers believe that students should mostly take what they refer to as “facilitating subjects”. I will not list them, because noble Lords are well aware of them, but there is an absence of creative subjects from the list—let me say only that ancient Greek is included but not art and design or computer science. Ministers claim that, because these are the subjects that Russell group universities want, every pupil should take them. In fact, although the Russell group prioritises these subjects, it actually says that only two of the three A-levels should be from this list.
But the Government prefer the absolute position, which chimes with their pushing the EBacc subjects at GCSE. They regard other subjects as “soft options”. This was never more obvious than when, in November 2014, the then Secretary of State for Education claimed that, for children, choosing arts subjects at school would,
“hold them back for the rest of their life”.
That was not just downright nonsense but an extremely damaging statement, suggesting a one-size-fits-all regime that ignores the strengths of many pupils and demeans their choices. Given that the creative industries are now such an important feature of our economy, does the Minister agree that we should not be sending a message to schools and young people that creative and technical subjects are not valued?
The benefits of creative subjects are not merely economic. Subjects such as drama and music are widely taught in independent schools and, until recently at least, were also offered at larger sixth-form colleges. But, in recent years, the colleges have suffered funding cuts, while the continued absence of a VAT refund scheme for them—which is available to academy sixth forms—leaves the average sixth-form college with £385,000 a year less to spend on front-line education. How can the Government justify their intransigence on this issue?
Cuts to sixth-form college budgets have resulted in the need to reduce their range of courses in order to increase class sizes in the remaining subjects. They are also reducing the possibility of taking additional subjects to AS-level, partly because they cannot afford the extra teaching and partly because the AS itself has been downgraded by the Government. The English sixth-form curriculum has traditionally been narrow, with just three subjects at A-level. The efforts of the Labour Government to increase breadth through the AS-level are being reversed by a mixture of cuts and policy, which particularly affects creative subjects that might be taken as an “extra”.
This impacts on the decisions of exam boards. With the costs of managing small-uptake A-levels already an issue, boards must be feeling an additional financial pinch with the loss of AS-level income now that A-level is a stand-alone exam. The numbers studying music at A-level have never been large, but they are dwindling. Schools across the country have already reluctantly decided to stop offering music as an option, and the likelihood is that more will follow.
Even modern languages, one of the EBacc subjects, is not safe. Last week, the Sixth Form Colleges Association published a report based on a survey of its members, which found that more than one-third of colleges have ended courses in modern languages, including A-levels in German, French and Italian. Indeed, evidence points to languages suffering a slow death. This year, fewer than 4,000 students sat German A-level and French entries were down to fewer than 10,000. Schools and sixth-form colleges with pressurised budgets are forced to choose which courses to keep and which to cut. Not enough modern teenagers want to study a language, it seems, which is a great shame because a language is more than just a qualification; it is a skill for life. As the country becomes mired in acrimonious negotiations on leaving the EU and turns ever more in on itself, the future looks bleak for the study of languages.
In a trend that leads directly to the reduction of A-levels in creative subjects, the Sixth Form Colleges Association report also found that almost six out of 10 colleges have reduced extracurricular activities, including educational visits, music, drama, sport and Duke of Edinburgh award schemes, or cut them altogether.
There has been a great deal of discussion about the need to close the divide between academic and vocational education, but with the EBacc the Government are unequivocally promoting the superiority of the academic pathway. If the reduction in the availability of creative subjects is the result, should we be surprised? Less than 50% of students took the EBacc in the past academic year, yet already there has been a significant effect on other subjects since it was introduced—most notably on what I argue is the key subject of design and technology, for which there has been a 30% drop in take-up. The curriculum should not be driven by the needs of the minority who are going to the most selective universities—what my noble friend Lady Nye described as a false hierarchy of subjects taught. Every student should have elements of the EBacc subjects in their curriculum. Equally, they should have artistic and practical elements. Many of the essential work-related skills that the CBI says are in short supply may well be better developed in artistic and practical contexts.
More investment from government is essential if sixth-form colleges and school and academy sixth forms are to continue providing young people with the breadth of high-quality education, including creative subjects, which they need to progress to higher education and employment. Failure to do so risks turning sixth-form education into a narrow and restricting experience. That would be bad for students, bad for society and bad for the economy.
Viscount Younger of Leckie (Con)
My Lords, I thank the noble Baroness, Lady Brinton, for securing this debate. We have heard some thoughtful contributions. I agree with her and other noble Lords who have mentioned the importance of the creative industries. The creative industries are a cultural and economic success story, a high-value, high-growth sector, worth £87.4 billion to the UK economy in 2015. The noble Lord, Lord Bilimoria, rightly mentioned our world-class museums.
The arts also enrich children’s lives. The Government fully recognise that they help develop the self-confidence, resilience, communication and team-working skills that will stand young people in good stead throughout their adult lives, a point raised by the noble Earl, Lord Clancarty. Again, the noble Lord, Lord Bilimoria, is right: the creative arts help develop critical skills for business, as he will know from his experience. The Government are determined that all young people should have access to an excellent, well-rounded education, and the arts are central to this.
The noble Baroness, Lady Brinton, asked about the action that we intend to take to ensure that exam boards continue to offer a range of creative subjects at A-level. What do we mean by creative subjects? The noble Baroness, Lady Nye, claimed that the Government have no definition of a creative subject. It is true that we do not set out to be too prescriptive about such a definition. For example, in some subjects, students design and create their own works of art or products, but many other subjects, such as computer science, involve other types of creativity. The Government have recently reviewed the content of every A-level, with input from universities and subject specialists, so that they fully prepare students for further study. Almost 50 new A-levels will begin to be taught between 2015 and 2018, including many arts subjects.
The noble Baroness, Lady Brinton, the noble Earl, Lord Clancarty, the noble Lord, Lord Bilimoria, and many other Peers raised specific concerns about AQA’s recent decision not to develop new A-levels in history of art, archaeology, classical civilisation and statistics. I studied history of art at a fine institution on the East Neuk of Fife in Scotland and recognise how such subjects help our understanding of societies and foster skills in critical analysis. The noble Lord, Lord Bilimoria, cited his own personal example. I therefore share your Lordships’ disappointment about this decision. However, contrary to some media reports, I assure your Lordships that this was not a government decision but was taken by AQA. Our intention has always been that there should continue to be an A-level in history of art and archaeology, which is why we published subject content earlier this year. In AQA’s judgment, there are challenges in delivering the qualifications because of the breadth and specialist nature of options, which are taken by a small number of students. These issues are not new. AQA has also cited the difficulties in finding examiners who not only have the subject expertise but the sound assessment knowledge to ensure that all students are awarded the grade they deserve.
The noble Baroness, Lady Nye, and other noble Lords wanted to know what action the Government are taking to secure the future of these qualifications. I can reassure the House that we are taking the matter seriously. As soon as AQA notified us of its decision we opened urgent discussions with the other exam boards on the option for them to offer the subjects. It is of course for individual exam boards to decide which qualifications to offer so I am not in a position to make any undertakings today, but I can say that discussions have so far been positive. I can also reassure the House that students currently studying these subjects for examination in 2017 and 2018 are not affected. The OCR exam board will continue to offer A-levels in classical civilisation beyond this date, and as the House will know, there are alternative qualifications in art history such as the Cambridge Pre-U, which are accepted by universities and count in school performance tables.
While noble Lords, myself included, might wish all young people to have the opportunity to study history of art, and archaeology if it is available, at school—the Government are engaged with other exam boards so that this may happen—we should recognise the wider context. The numbers of students currently studying the subjects are low, and universities do not require an A-level in these subjects as a pre-requisite for degree-level study. However, I am aware of the efforts that the arts world is making to improve take-up, including the fast track AS-level offered by the Wallace Collection.
While small numbers of pupils are likely to study history of art A-level, the national curriculum for art and design ensures that many more pupils have an introduction to this important subject. Its aims include ensuring that pupils evaluate and analyse creative works and know about great artists, craft makers and designers. The noble Lord, Lord Clement-Jones, mentioned careers advice, which is a very important point. Young people should have a good understanding of the world of work and the skills needed to do well in the labour market, which is why we are investing over £90 million during this Parliament to ensure that young people have equal access to life-changing advice, including funding for the Careers & Enterprise Company. This will help to ensure that pupils develop skills in visual literacy, which the noble Earl, Lord Clancarty, asked about; this reflects the points made about history of art.
The national curriculum is compulsory for maintained schools and includes music, drama, dance, and design and technology. Academies and free schools can use their freedoms to innovate and build more stretching and tailored curricula to meet the particular needs of their pupils or the particular ethos of the school, including promotion of the arts. On the point raised by the noble Baroness, Lady Brinton, on the EBacc, I reassure the House that this core academic curriculum can sit alongside a high-quality education in the arts. We have never said that pupils should study the EBacc subjects and nothing else. Indeed, the EBacc is deliberately limited in size, so that there is flexibility for pupils to take additional subjects of their choosing. On average, pupils in state-funded schools enter nine GCSEs and equivalent qualifications, rising to 10 for more able pupils. For many pupils, taking the EBacc will mean taking seven GCSEs, and for those taking triple science, it will mean taking eight. Therefore, there will continue to be room for pupils to study other subjects, such as the arts, which reflect their individual interests and strengths.
We are also committed to ensuring that all children receive a high-quality arts education, including those from disadvantaged backgrounds and those with special educational needs and disabilities. Between 2012 and 2016, this Government invested more than £460 million in a diverse portfolio of music and arts education programmes designed to improve access to the arts and to develop talent across the country. There are too many to mention here but the programmes include the Saturday Club Trust’s art and design club, which provides 14 to 16 year-olds with the opportunity to attend free Saturday morning classes at their local art college or university. These programmes are a direct result of the Henley reviews into music and cultural education—a point raised by the noble Baroness, Lady Brinton.
The noble Lord, Lord Clement-Jones, spoke about the film industry, which does not surprise me, given his interest. He may be interested to know that the Department for Education provides £1 million for the BFI Film Academy, which I suspect he will know. This is one of the programmes suggested by Darren Henley, whose reports were mentioned by the noble Baroness, Lady Brinton.
In addition, some schools use pupil premium funding, worth over £2.5 billion overall and up to £1,900 per pupil, to provide cultural enrichment opportunities for disadvantaged pupils.
The noble Baroness, Lady Brinton, highlighted the issue of post-16 funding and I should like to address the points she made about sixth-form funding. This Government believe that every young person should have access to an excellent education and we have protected the base rate of funding for all types of providers until 2020 to ensure that this happens. We have ended the unfair discrimination between colleges and school sixth forms. All providers now receive funding according to the same base rate and we now ensure that funding is based on student numbers rather than discriminating between qualifications. On top of this, we are providing more than half a billion pounds this year alone to help post-16 institutions support students from disadvantaged backgrounds or with low prior attainment. We have also introduced extra funding for large programmes, including those for high-achieving students taking four or more A-levels.
In this short debate, I hope that I have been able to reassure the House that the Government are fully committed to developing young people’s creativity and to ensuring that a wide range of high-quality A-levels is available in the arts and other creative subjects. I have explained that the Government share noble Lords’ concerns about the AQA’s decision to withdraw from history of art and archaeology, and are working with other exam boards urgently to see if a solution can be found. However, these are exceptions; our wider A-level reforms include many arts and creative subjects which are not under threat and will give a fresh, new impetus to the study of arts and the mastery of creativity.
Housing
(8 years, 1 month ago)
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Lord Griffiths of Burry Port
Moved by
To move that this House takes note of the impact of the shortage of housing on the desire of people, particularly the young, to live in the communities where they were born, raised and educated.
Lord Griffiths of Burry Port (Lab)
My Lords, I am grateful for this opportunity to address a subject about which I feel passionate. It is a small way to begin to discharge a debt owed by people of my generation to those younger than us. I should also like to express my gratitude to those who will speak later in this debate. I trust it will lay bare an existential need to bring imagination, compassion and resource to the housing needs of young people.
I am a Methodist minister working in London, where the City of London and the boroughs of Islington and Hackney all come together. A Peabody housing estate and blocks of flats built by our local authorities attest to the provision of social housing in earlier times. These dwellings have been inhabited by thousands of lower-income families, many of whom are reached by the ministries of our church. It is with the children of these families that I want to begin. We work hard to raise their aspirations, broaden their horizons and help them strike out towards a bright future. A philanthropist friend has contributed millions of pounds to allow a steady stream of inner-city boys and girls to take up places at the Leys School, our Methodist school in Cambridge. He has also helped us to set up a small fund that helps dozens of our young people who head off for university, where some have gained very impressive qualifications. It is what happens next in the lives of these young people—educated, talented and multi-ethnic young people—that has led to my seeking this debate.
I should put alongside those young people from my congregation the pupils of two splendid inner-city secondary schools—one for boys in Islington and the other for girls in Tower Hamlets—which together form the Central Foundation Schools of London. One hundred and fifty years ago, this foundation was set up to provide for the educational needs of middle-class children. Both schools have undergone exponential change in recent years and are now among the best-performing schools in London. They send young adults on to higher education and into the world of work, and there are brilliant mentoring schemes with local enterprises. It is what happens to those pupils when they leave school that concerns me. They were born, have grown up and are being educated in this part of London. As they begin to establish their own lives, it is becoming virtually impossible for them to root those lives in the communities they know, close to friends and support networks.
If this were a sermon—which of course is a craft I know something about—I would begin with a text by St Theresa:
“If you’re young, you’ll find it harder than ever before to own your own home”.
That is quite an opening blast from an incoming Prime Minister, especially when we remember all the experience that she gained in her years at the Home Office. So we hang on to the pledge with which she followed that declaration. She promised to make Britain,
“a country that works for everyone”.
Everyone includes, of course, young people, and it is in the spirit of that pledge that I offer my remarks today.
At this point, I suggest that there is little point in trading statistics across the Floor of the House—we must surely all be aware of the housing crisis facing us. Nor do I think there is much to gain from comparing the achievements or failures of successive Administrations. Everyone has tried to respond to the crisis but no one can honestly say that they have cracked it. This Government and their coalition predecessors brought forward their Starter Home scheme and offered Help to Buy equity loans. The Communities Secretary has recently called for 1 million new homes to be built by 2020. We can only wish him well. It is not the first time that that same call has been made—indeed, an identical target was abandoned only recently—but by all means let us have another go.
To meet the target, the maths are not difficult—just divide 1 million by four—but it has been notoriously difficult to get anywhere near the figure that results from that equation. The best that anyone has done in recent times was 10 years ago, in 2006-07, when 219,000 homes were built. Last year it was just 170,000 and the previous year a miserly 145,000. Even the 100,000 prefabs mentioned in the media this week as perhaps one way of helping to reach the jackpot would only scratch the surface of our housing problem.
A little YouTube clip that has been watched by millions of people says it all. It shows a young couple living in rented accommodation and trying hard to save up for a deposit on a house. Their joint earnings amount to £58,000 but they still cannot get enough money together for a deposit. Average rents have risen by 20% in the last five years, while average wages have risen by only 5%. Again, the maths are simple. Rent in London has now soared to a median of £1,400 per calendar month. As London First—a splendid coalition of London employers, the housing charity Shelter, the FSB and the CBI—puts it, as part of its Fifty Thousand Homes campaign:
“For workers in sales, customer service and care, median rents in Inner London and Outer London are close to or above 100% of … typical gross earnings”.
It points out that even entry-level bankers will struggle to afford these rents.
The rented sector offers little solace for young people. Evidence of that was readily available in the Homes and Property section of yesterday’s Evening Standard. It looked at the rent levels of people seeking to live in one room. The borough of Bexley offers the cheapest such accommodation at £500 per room—that is per room, not flat. It was a frightening feature article and made it clear just how the rented sector proves such an attractive arena for private landlords who can so easily exploit the housing shortage to their benefit.
In the next few months, I will be moving from my tied accommodation into the housing market for the first time in my life. Initial exploration has revealed to me the risks, the lack of security and the costs that are involved in trying to find somewhere to live, whether to buy or rent. This hits young people hardest. It really is time that people of our generation come clean about the mess we have left for our children and grandchildren.
There has been much talk about the need to invest in large capital projects as we face an uncertain economic future. The Crossrail project is nearing completion, the nuclear power station at Hinkley Point has got the green light, HS2 is stuttering its way into life and a new runway at Heathrow seems to have got approval. The mood music is clear, but here come my questions. Why cannot we put the provision of housing on a par with all these grand projects? Is not the need to have a roof over our heads and a decent place to live a fundamental human right? Why can we not commit to a national plan to meet the housing targets that we continue to set for ourselves? Why can this not be bipartisan? Why can this obvious social need not command the best energies of us all in a concerted effort to change things? Is it really impossible to provide more support to local authorities that want to start building again? Is it really impossible or politically inexpedient to abolish the restrictions that prevent local authorities borrowing against the value of their housing stock, especially where this would be done within prudential limits? Is ideology or a refusal to recognise past failures always going to win on this matter?
The housing market is so totally skewed in the part of London where I live. Block after block of luxury flats is being built, and five years ago, the cheapest in a development 50 yards from my home was going for £650,000. There seems no end to the demand for these flats, yet nobody seems to live in them. Speculative building is taking up all our space, driving up demand, and contributing to the increasing unaffordability of housing for local people and thereby gentrifying our community. In 2010, 50% of pupils entering our local boys school were registered for free school meals. Six years later, this year, that has dropped to 16%. If this meant that local residents were becoming more affluent, it would be fine, but of course it does not mean that at all. It simply points to local people being edged out of their accommodation as wealthier people buy into it. Social change is a weird thing when it is forced by these artificial market forces.
I see these things from my metropolitan point of view. However, I am happy to acknowledge submissions I have received from other parts of the country from charitable bodies that work across England, and from the Countryside Alliance in respect of rural communities. They offer a broad measure of support for the case I am seeking to establish. The current housing crisis should be recognised as a national emergency and treated as such.
Shelter, that admirable champion of those seeking decent housing, has worked out a formula it calls the living home standard and applied it to the needs of young people. Shelter offers this standard as a,
“housing equivalent of the living wage”.
Unsurprisingly, it breaks down the essential elements of that formula into five basic components: affordability, space, stability, decent conditions and neighbourhood. It is the lack of provision across all these requirements, especially as they affect young people, that has led me to seek this debate today.
I am currently helping an author who has written the biography of Sir Kingsley Wood, an important Conservative politician of the 1920s and 1930s. At his untimely death in 1943, he was Winston Churchill’s Chancellor of the Exchequer. His most significant government service was in the Department of Health, first as assistant to Neville Chamberlain and then, later, as Minister in his own right. In those days, responsibility for housing fell within the Department of Health. Wood worked it all out: if people are decently housed, they are likely to enjoy better health. In 1925, as a Conservative Minister, he was brave enough, as he put it,
“to take a risk .... in the national interest”,
by directing £14 million then being spent on the treatment of tuberculosis towards housing on the grounds that such an investment offered a way of preventing the progress of the disease and, in the end, would save money.
I remember the research of a young scholar in our congregation who was examining the relationship between the conditions in which people live and their mental health. He was clear that mental illness was frequently a consequence of bad housing and the social environment in which people lived. He is now a professor in McGill University, Montreal, and his skills are sought globally. In other words, proper attention given to housing is likely to show good results across the board: employment in the construction industry; dignity in people’s personal lives; well-being and good social image; protection and security for ordinary people; and a better future for our young people, who are currently in danger of being locked out of the housing market and moved out of the neighbourhoods that have nurtured them. I hope that, in some small way, people will have heard my voice articulating their concerns.
Lord Horam (Con)
My Lords, we are all grateful to the noble Lord, Lord Griffiths of Burry Port, for introducing his debate on housing, which we all know is a central issue of our times. He did so with all the fluency one would expect of a minister of the Church without it ever quite sounding like a sermon. He was right to pinpoint the issue of the obligation of our generation and perhaps the generation after us to young people, who are finding this problem extremely difficult to overcome.
From having taken part in many debates on housing in the past 12 months, particularly on the Housing and Planning Bill, which had a difficult passage through this House, I feel encouraged now that the Government really do get it. The noble Lord quoted St Theresa, and I am encouraged by feeling that the Government now understand that this is a central issue which they have to tackle and which has to be judged accordingly.
Secondly, I am very pleased at the way that the new Ministers in charge of this area after the change of Government are tackling the issue, particularly Sajid Javid, the Secretary of State, who is an economist and former Treasury Minister, which is important in this context as he has the right sort of background to understand this issue, and Gavin Barwell who, as the noble Lord will know, is a London Member of Parliament and understands the problems that are particularly acute in our capital city. I am confident that they are the right team to tackle this.
Thirdly, I praise ourselves because in the report by the Economic Affairs Committee of this House, chaired by the noble Lord, Lord Hollick, we had the right sort of solutions to the problems we face. He made a number of points, of which two particularly struck home. The first is that, above all, this is an issue of supply. The Government are saying that we must build up to constructing 200,000 homes a year. Our committee’s report said that was not enough. We should be building up to 300,000 houses a year. I know that that is a steep climb from 150,000 to 170,000 homes, which is where we are at the moment. Incidentally, that figure does resonate: it was the number that Harold Macmillan achieved after three years as Housing Minister. It is not an unfair aim for a Conservative Government to reach in due course.
The second major point made in the Hollick report, if I can call it that, was that the private sector will not do this. We have to encourage social housing, whether through housing associations or council housing. They must build far more than they have done in recent years. That is fundamental because we will never get anywhere near what is necessary if we rely on the private sector, which has different objectives, above all around profit and so on, so clearly we have to get a grip on the social sector. In my view there are three areas that the Government should be looking at to tackle the issue.
First, as the noble Lord, Lord Griffiths, has just said, the Government should abandon the cap on local authority spending on housing. He instanced a number of infrastructure projects that are going ahead in place of housing. It is ridiculous that local authorities can build swimming pools ad lib but cannot construct housing beyond a certain point. As he said, there are issues of prudence which councils can adhere to in order to prevent them being reckless in how they handle their finances.
Secondly, public land should be organised. A great deal of public land is available for housing, as it is for other things. I believe that the Government should organise it properly and relax the Treasury rules on getting good value for land. It should be more sympathetic to settling on a slightly lower price for relevant bodies. Indeed, I understand that the Secretary of State is looking at direct commissioning, whereby the Government will directly commission new housing on public land released at the right sort of value to make that possible.
Thirdly, the Government should encourage the formation of housing associations. I declare a former interest as the first chairman of the Circle 33 Housing Group, which is now the Circle Housing Group. It undertakes housing projects in the London area and around East Anglia, and it could do far more. Shortly I will be attending a meeting being held by the National Housing Federation—as, I am sure, will many other noble Lords—headlined “Ambition to Deliver”. We can and should be building more houses, and I believe that housing associations can do so.
The Government are heading in the right direction and they have the right team in place. I look forward to the White Paper that I believe will be published this month or in December, which will put more flesh on the bones of this critical issue of our time.
Lord Whitty (Lab)
My Lords, I too thank my noble friend Lord Griffiths for initiating this debate. When 3.5 million young people are either forced to live with their parents or are sleeping rough, we have a very serious societal problem. It applies not only to the inner cities to which my noble friend referred, but to many smaller towns and in particular to rural areas. Young people in our countryside cannot afford to live and work in the villages and towns in which they were born and brought up.
The same applies in urban areas. Not far from here there used to be communities of people who did not need an excessive income to be able to buy or rent premises. Nowadays, the new generation is having to move out and its homes are being replaced by the kind of buildings referred to by my noble friend. As I say, this is a serious societal issue.
There are some great names among past government housing Ministers, from Maxton to Bevan to Macmillan and, indeed, Kingsley Wood, but the last 30 years of delivery on housing policy by successive Governments has been appalling. Young people in particular are not able to get on the housing ladder and we have a private rented situation that is, in effect, highly exploitative in areas of great housing stress and very insecure.
The noble Lord, Lord Horam, is absolutely right about completion of new-build houses. This is a supply issue. New-build houses have been running at about half the rate of household formation for nearly 20 years. Indeed, the housing that is being built is, of course, housing where developers can make money. For the most part it is not only high-end, unaffordable and out of reach for large proportions of the population, it is also, in its physical proportions, singularly inappropriate for single people, young couples with small families, or pensioners who want to move out of larger premises and thereby make way for younger families. I include in that, of course, retiring Methodist ministers. Instead, we have so-called luxury flats, which distort the housing market in our city centres, and restrictions on building in small towns and villages.
Provision of social housing has drastically fallen over recent years. Even now, with the social housing that still exists in our inner cities, we face sell-off, demolition and exile for the tenants and leaseholders in those premises. I am not making a party-political point. Councils of all persuasions have found themselves, because of the financial restrictions, forced into engaging in activities that break up communities and disadvantage the younger generation in particular.
Local authorities need to be able to play a much more positive and effective role. They need new-build programmes. Again, here I agree to a large extent with the noble Lord, Lord Horam. They need to have the cap on their building and finances removed. They need borrowing powers. We need to regard housing as a vital part of our infrastructure strategy. We need to ensure that we replace homes that are sold off by the extended right-to-buy provisions on a one-for-one and like-for-like basis, and that we produce housing that meets the needs of single people and young families.
Only a determined and new form of housing strategy will resolve the problems of the younger people and the wider housing crisis we have. This is not only a social and economic problem, as my noble friend implies, but a moral problem. There are great and growing divisions in society; generational divisions are some of the most dangerous. Compare the young people stuck at home with their parents or living in inadequate conversions, bedsits and multiple occupation with extortionate rents and poor premises, with our generation and that immediately below us, who by and large had acquired housing, were owner-occupiers, or were secure social tenants in council or housing association buildings. That is building up significant resentment on the part of the younger generation. It adds to the resentment of them having lower incomes and lower wages and the absence of potential pension provisions, as contrasted with us and the over-50s. This resentment is only part of the effects of the failure to deliver appropriate and affordable housing to our younger generation, but it creates not only immediate problems of policy but very dangerous social divisions.
Baroness Grender (LD)
My Lords, I thank the noble Lord, Lord Griffiths of Burry Port, for initiating this all-important debate and his eloquent summary of the current situation. I am registered as a vice-chair of the All-Party Group for the Private Rented Sector. I think we are all agreed on one thing: we would not start from here and 30 years of lack of housebuilding, in all mixes of tenure, has led us to this point.
At the end of this chain—on the front line—are homeless young people. Once a year, the charity Depaul UK, which works with vulnerable young homeless people, has a “CEO sleepout” to raise funds and awareness. On Monday night 200 of us, including some parliamentary colleagues, slept out. Just one night on a cold slab of concrete serves as a sharp reminder of where roughly 1.3 million young people have at some point ended up; namely, sleeping rough or in an unsafe place.
I recall lobbying both the Major and Blair Governments for the charity, Shelter, about the desperate need to solve supply at that time and even then having a limited impact. All Governments at some point have had within them great advocates for the need to promote supply, particularly of social housing, as the noble Lord, Lord Horam, has shown. But it is never enough.
In the coalition Government, the Help to Buy scheme, bringing empty homes back into use through the empty homes premium, increasing support for self-build and a small increase in the building of social housing were not enough. Even if we were to close down both Houses of Parliament—no, let us close down the whole of Westminster—trained everyone in the area, reskilled them in the skills now lost to the housebuilding industry and started to build in earnest, it would still take too long for the supply of homes to meet current need. As the LGA says, we need to build a minimum of 250,000 homes a year—in the Liberal Democrats, we believe that it should be 300,000. But last year, as the noble Lord has already explained, around 170,000 homes were built.
If we would not start from here, my question for this debate is: is the private rented sector now part of the solution? According to the Financial Times, No. 10 is starting to think that it may be. Now that 20% of the population is living in this sector, with a growing number of people renting throughout their adult lives, perhaps it is. However, our private rented sector in too many cases is simply not fit for purpose, for families or for young people.
Perhaps then this is a moment when this Government should take a long hard look at security in the private rented sector. There can be small but essential changes. My own Private Member’s Bill, to make provision for the rights of renters, will be in Committee in a fortnight—all are welcome to come along. There are two central proposals in it. First, if there is to be a database of rogue landlords, and we welcome that change in the Housing and Planning Act 2016, we believe that it should be open. If a landlord is designated as a rogue landlord under the new Act, a tenant should know that. Secondly, for too long, lettings agents have been able to double-dip into fees: they charge the tenant, who has no choice when it comes to who their letting agent is, having already made the difficult choice of a place to live and the landlord they will have. Instead, lettings agents should charge the landlords only. They are the party who can shop around and make the choice about which lettings agency to use. The law has been successfully changed in Scotland with little impact on either rents or the lettings agent sector.
Yesterday, I met a 41 year-old who has just started renting near Liverpool. He has paid £300 to a lettings agent for “admin fees”, with no transparency and no explanation of what it is for. He has also paid a deposit of just under £1,000. The flat is so damp that water is seeping up through the lino in the kitchen. So what is that £300 for? It is clearly not for checking whether the place was in good order in the first place.
People who rent are faced with significant up-front costs and often very short tenures, and they have to pay more fees and find large deposits every time they move. Young people in particular have to move often, especially in London. In England, the length of a let is always so short that they face those up-front costs again and again.
If the rented sector is part of the solution, or the stop-gap between here and the vision of housing in the future that I think many of us have, it is a market badly in need of reform. Shelter has published with YouGov a detailed survey of more than 3,000 private renters and a study of the differences in legal status of renters elsewhere in Europe. It is entitled Time for Reform: How our Neighbours with Mature Private Renting Markets Guarantee Stability for Renters. The findings are fascinating. I urge the Minister to read it and use it in the current DCLG working group that is looking, right now, at the private rented sector. The report explains that we are the nation with the least stable renting laws in Europe, the only exceptions being Switzerland and Portugal. In all other countries, including Poland, Slovakia and Greece, private renters are given greater security of tenure. Eighty million renters across the countries studied rent in markets where more than a year’s minimum security from eviction without grounds is the legal norm. Both Ireland and Scotland have recently introduced these changes.
We have heard the phrase “take back control” a lot over recent weeks—it is something of a mantra—but young people renting in this country have no or limited control. When the quality is poor, it affects relationships, plans to raise children, travel to work and health. It is time for a generation that has little choice but to rent to have much greater control over how they rent.
The Earl of Listowel (CB)
My Lords, it is a pleasure to follow the noble Baroness with her long career in campaigning on homelessness and her detailed knowledge of the area. I too am very grateful to the noble Lord, Lord Griffiths, for securing this timely and important debate—
Lord Young of Cookham (Con)
If the noble Earl looks at the speakers list, he will find that he is next but one.
Baroness Healy of Primrose Hill (Lab)
My Lords, I, too, congratulate my noble friend Lord Griffiths of Burry Port on securing this important and timely debate. The housing shortage is harming many in our society, but there is one group I wish to highlight today. Women prisoners face many problems on release, one of which is homelessness. Without safe and affordable housing, they are at high risk of both exploitation and reoffending. Most are likely to have been victims as well as offenders. There is a high level of unmet mental health need, often resulting in self-harm and suicide. Some 19 women have died in prison this year.
Most women should not be imprisoned. Few women prisoners are notorious for horrific crimes. The majority are in for non-violent offences, serving short sentences which serve little purpose, apart from further disrupting their already chaotic lives. I hope that the government strategy to improve the treatment of female offenders in custody and in the community, promised today for early 2017, will reassess the use of these short sentences to rehabilitate and cut reoffending and instead support women’s centres. The Prison Reform Trust and Women in Prison recently published a research paper, Home Truths, which calls for preventive action to deal with women having no home on release. A recent HM Inspectorate of Prisons report found that women had been issued with tents and sleeping bags for want of suitable accommodation on release.
Ensuring appropriate accommodation for people who offend is the foundation for rehabilitation, resettlement and risk management. Accommodation is one of the nine pathways to reducing reoffending for women recognised by the National Offender Management Service. It was identified by people who offend as second only to employment in improving their chances of resettlement and reducing reoffending. Yet women in trouble with the law may find themselves declared intentionally homeless, deemed ineligible for housing or cut off from housing benefit and evicted for rent arrears. Without a home, it is much harder to care for children, get a job or training placement, register with a GP and access healthcare, or arrange benefits. No wonder that a lack of suitable housing can be a driver to offending and reoffending. A homeless woman may commit a crime out of desperation to have a roof over her head, albeit in a police or prison cell. Women sleeping rough are even more vulnerable to attack and illness than men on the street.
Women in unsuitable accommodation may offend to obtain essential items of furniture, clothing or food, often for their children. The abolition of the Social Fund and the harsh benefit sanctions regime leads to despair, as Ken Loach showed in his recent film “I, Daniel Blake”. Local strategies to reduce women’s offending and imprisonment must take account of their housing needs, including the needs of those with dependent children, many of whom were separated from their mothers by imprisonment. This has a generational impact, especially if children end up in care, many of whom will go on to offend. Importantly, the time limit for eligibility for housing benefit for sentenced prisoners should be extended from 13 weeks to six months to reduce the risk of eviction for rent arrears.
In England and Wales, women are imprisoned on average 64 miles away from home. Families may find it hard to keep in touch, reducing the chance of rehabilitation, and distance makes it difficult for women to liaise with housing providers and support services on release. Most women receiving prison sentences are incarcerated for less than 12 months and 61% are in for six months or less. A third of women may lose their homes while in prison and six in 10 women do not have a home to go to on release.
Research suggests that people who commit offences are likely to have a volatile housing history, and 15% of prisoners were homeless before entering custody. The St Mungo’s report Rebuilding Shattered Lives revealed that almost half of the homeless women it worked with had an offending history, and over a third had been to prison; 19% of women in prison were not in permanent accommodation before entering prison, and 10% had been sleeping rough.
Accommodation needs to be safe. Women who return to unsuitable accommodation—for example, with an abusive partner or in a mixed hostel where they can be vulnerable to predatory men or where there is easy access to drugs—may feel that committing another crime to return to prison is a safer option. Sentencers need to consider that imprisoning a woman may lead to loss of housing and a cycle of reoffending; conversely, they should not imprison a woman because she is homeless or of no fixed abode by refusing bail. Pre-sentence reports need to contain sufficient information to enable courts to make appropriate decisions.
Nearly half of women entering custody do so on remand, and the majority of them do not go on to receive a custodial sentence. Women on remand spend an average of four to six weeks in prison, which can jeopardise their accommodation through rent arrears, with the resultant devastating impact on their children. Only 5% of children with a mother in prison are able to stay in their own home. Of course, local authorities are under extreme pressure but could have a crucial role in helping these vulnerable women. Local and national government must acknowledge the importance of housing women on release as the long-term fallout will affect generations to come. Unstable housing situations reinforce a cycle of crime at a cost to individuals, communities and, ultimately, society.
A transparent, co-ordinated approach and greater co-operation and information-sharing between local authorities, prisons and other agencies could improve women’s resettlement prospects. We urgently need a cross-government strategy to improve the housing pathway for women. I hope the Homelessness Reduction Bill will be part of that strategy. In the end, a greater provision of social housing—affordable and secure for the most vulnerable in our society—is the only way forward, as this debate has shown.
The Earl of Listowel
My Lords, I apologise to the noble Baroness for jumping the gun. I thank the noble Lord, Lord Griffiths, for securing this important debate. It is important because it is young people who are most important to the future success of any society. I remind your Lordships of my interests in property, as noted in the register.
The noble Lord’s Motion emphasises the need to provide local housing to sustain communities. We are all becoming increasingly aware of the importance of sustaining relationships for the healthy development of children and young people. Continuity of relationship is the key to recovery from trauma for children and young people in care but it is vital for all our young people.
I hope I may thank the Minister for the priority that the Government have given to housing since the last election. We have had a housing Bill. The noble Lord, Lord Horam, talked about the forthcoming White Paper. The coalition Government legislated in the area of looked-after children for staying put—allowing many care leavers to stay with their foster carers or close to home up to the age of 21. The Government are looking now at staying close—allowing care leavers from children’s homes to remain close to those homes and the important relationships there. In the Children and Social Work Bill, currently being considered, we are looking to support all care leavers up to the age of 25. Between 80% and 90% of care leavers aged 18 to 21 are now described as being in satisfactory accommodation, and Ofsted has recently begun inspecting care leavers’ services. These are all most welcome changes.
I should like to concentrate on housing for young people in care, care leavers, foster carers and families in temporary accommodation. The lack of affordable or suitable housing for care leavers is an issue of grave concern. Over the years, many of those in care and leaving care have expressed these concerns to me and I am particularly grateful to Jordan Morgan, a care leaver who produced his own report on care leaver housing issues from his own experience and those of others. He kindly wrote to and met me recently. I am also grateful to the charity the Who Cares? Trust for its work on the housing of care leavers.
Care leavers are suffering from the lack of affordable housing. They are often forced to rent in the private sector. They are dependent on benefits and can often be in worrying rent arrears, which can become exacerbated by the cut to their housing benefit that occurs at age 22, as they move into the shared room rate. No parent wants to see their child homeless or unable to afford to live safely in the area that they call home. However, many care leavers, unable to benefit from staying put, are facing real challenges in accessing safe, secure and suitable housing. Care leavers are offered homes that they will not be able to afford if they stop receiving benefits and move into work, particularly in London. This leaves individuals either reliant on benefits or facing a move when they find employment, adding increased pressure at an already stressful time. Care leavers are three times more likely to face benefit sanctions then their peers and two-thirds less likely to challenge those sanctions—yet when they do, most sanctions are overturned. Many continue to pay council tax and, too often, face the bailiff for failure to pay.
The tools and resources for individuals moving off benefits and into work are not often available to young people from care. Faced with anything of up to six weeks before their first salary payment and signed off from benefits, some care leavers still have to turn down employment opportunities. There is no consistency across the country for care leavers’ access to local authority accommodation, with some care leavers qualifying for a priority banding only if they have additional vulnerabilities. Fixed-term tenancies can act as cliff edges, forcing young people to move on regularly—often into accommodation of ever-decreasing quality, as the price of rent increases beyond their income.
In their strategy for care leavers Keep on Caring, the Government made a variety of commitments to improve outcomes for care leavers, including experiencing stability and feeling safe and secure, as well as achieving financial stability. I would be grateful to know how the Minister’s department is working with other government departments to increase the amount of suitable housing stock that is available for care leavers to access and how it plans to tackle some of the problems outlined above. I would also welcome an update on what the Government are doing to ensure that homeless young people aged 16 and 17 receive appropriate support during the crucial years of transition to adulthood. Perhaps the Minister could write to me on these issues. I would be grateful if he might consider sharing my concerns with the noble Lord, Lord Nash, and the Minister of State, Edward Timpson.
The charity Fostering Network has significant concerns about the impact of housing shortages and benefit cuts on foster carers. Staying put—allowing young people to remain with their foster carer to the age of 21—is most welcome but it puts pressure on the sufficiency of foster placements. Furthermore, two-thirds of foster carers report facing reduced financial support for their staying put role, while a quarter say that they cannot afford to provide staying put because of that lack of support. Local authorities are unwilling to assess families for fostering if they are in insecure housing, as they increasingly are. By far the majority of foster families are on low incomes. Foster carers’ homes are often of an inadequate size; this is exacerbated by the bedroom tax. The housing shortage prevents their biological children from moving on, so they lack the capacity to foster. The empty nesters are in decline. It has become more difficult to place sibling groups with foster carers. It is often important to keep together brothers and sisters who have been taken into care. It was reported to me that one foster carer had to sleep on the sofa to accommodate the sibling group of five whom she had felt moved to keep together.
I turn to families in temporary accommodation and their children. I am very grateful to Shelter for its campaigning in this area and its report on families in emergency accommodation, published today. There are 120,000 homeless children in Britain, the highest level since 2007. The number of families in bed and breakfast accommodation is 18% higher than last year—nearly 20% higher. The report looks at 25 families in depth. They all live in a single room, more than half of the parents have to share a bed with their children, three-quarters have to share lavatories and bathrooms with others and two-thirds describe their rooms as being in disrepair.
One family I have been in touch with over the past year began in Southwark, moved to a refuge from domestic violence in Hackney, then to a one-bedroom for the mother, her 16 year-old daughter and one year-old granddaughter, then, following eviction, to a bed and breakfast single room. In that period, the mother’s worst fear was of being rehoused possibly as far afield as Manchester, where she would know no one. This is a common experience nowadays. Thankfully, it now appears that Hackney will provide for her.
I should finish. Does the Minister share my concern for these families? What does he have to say to the increase in the use of bed and breakfast accommodation? When does he envisage the number of children facing homelessness declining? Will he bring forward a cross-departmental strategy on homelessness, as the Select Committee on Communities and Local Government in the other place recommended on 31 August? I look forward to his response.
Baroness Dean of Thornton-le-Fylde (Lab)
My Lords, I thank my noble friend Lord Griffiths of Burry Port for obtaining this debate. I declare that I am a board member of Places for People, a registered housing association.
Although this debate deals with young people, whom I shall speak about, we have a problem with housing right across the board in both tenure and supply. In 2008, 68% of the population were owner-occupiers. In just four years, it dropped to 65%. It is quite shocking that today an average young working family will take 12 years to save for a deposit to buy a house. It takes six and half years, on average, for couples who do not have children, so it is clear that people have choice of whether to have a family and wait longer to get a deposit, or to forget a family and get a deposit earlier. That has led to more young people being dependent on their family for longer and living with them. In 2014, Shelter reported that just 23% of people aged 20 to 34 wanted to live with their family and 77% wanted to be independent and live by themselves. Irrespective of that, all young people today face higher housing costs than any generation before them. There is not much optimism in the future for them. That means that we have delayed family formation, which has strong implications for us as a society.
In addition to availability—and housing is in short supply—cost can be a real hurdle. Places for People looked at what it could do to help, apart from providing some cheaper accommodation. It has a personal loan service because young people are particularly vulnerable to being short of money, taking out a loan and finding themselves in a spiral of owing money and being in debt. Places for People has a scheme to make small loans of between £250 and £3,000 at a cheaper rate than normal, and 8,500 people have taken advantage of it. Pennywise in Bristol has a pilot scheme with one-to-one mentoring to help people develop and manage their financial affairs. It has engaged 1,700 people on the one-to-one scheme and another 1,000 people have received group mentoring. Quite often, people go into a tenancy and have a problem paying. It is interesting that 55% of those who were in at-risk tenancies are now in secure tenancies. It has helped to turn them around. There were also improvements in mental health for 35% of them—health has been mentioned in this debate—and 20% moved into work. There are small things that can be done to help, but we are still left with the big problems of shortage of supply and, sometimes, of cost.
What can be done? We need to look at what part of the problem is first. There is no overall planning, in the sense that the local authorities have become reactive. They are short-term and have low levels of resource—we all know that. Even where there is a vision and capacity to plan, there are too few organisations now able to partner with them. For instance, between 2007 and 2014, the number of housebuilders delivering 30 or fewer homes—small housing developments, which of course are particularly found in rural areas—reduced from just over 5,000 to 2,200. There are fewer builders available to provide the housing, which creates big delays. In 1995, firms building fewer than 100 homes delivered a quarter of our new housing stock; today, it is one in eight. So we have a capacity problem, quite apart from the issues that this debates raises. In addition, of course, housing associations have faced the rent reductions that were introduced last year, which mean that social housing rental income has reduced by approximately 12%. The figures came out just in June this year: housing association starts were down by 6%. It is a big problem that needs tackling.
One means through which the Government could increase housing supply is tax incentives such as those that apply in France and the United States. We carried out some research with De Montfort University and Cambridge University. The outcome, which I am quite happy to share with the Minister if he wishes, convinced us that there was merit in that. We certainly need triggers to encourage housing associations, which face rent reductions and have balance sheets they need to secure. They need more incentives to build than they are getting. The 6% drop by June this year is very worrying—I would certainly be worried if I was in the Minister’s shoes. We need to look at different incentives. Planning is one aspect, trying to build capacity is another and tax incentives might be yet another. I leave that thought with the Minister.
Lord Palmer of Childs Hill (LD)
I too thank the noble Lord, Lord Griffiths, for securing this debate. The Motion talks of young people’s desire to live in communities where they were born, raised and educated. Sadly, more often than not, young people looking for a home cannot meet any one of those considerations when moving from a family home.
It must be a fundamental requirement that in order for the young and others to live fulfilled lives, they need a decent home at a cost they can afford. Access to housing is fundamental to our liberties, our opportunities and our hopes for the future. Homes need to be a mix of owned and rental. I thank the noble Lord, Lord Horam for his contribution, because he drew attention to the fact that houses do not have to be built only by the private sector, although in fact, sadly, this Government are currently going very much in that direction. The noble Lord also said that public land should be brought into use for housing. I would add to his deeply felt remarks that the houses built should be for both rent and purchase, not only for the latter.
Not everyone will be able to purchase a home. Some may not want to purchase a home but want to rent. Conservative and Labour Governments have made the situation worse by the wholesale sale of council housing. Local government’s housing stock has been decimated—in many London boroughs, it is just not there any more. The Conservative argument that I have often heard—that even after sale someone is occupying the home—does not address the problem that these properties were never intended to be bought and sold in the way they are, often to people not in need. They were intended as properties for which a fair rent was charged—exactly the type of provision for those to whom this Motion relates.
UK housing provision is in the emergency ward. Tory and Labour Governments have for years and years failed to encourage the building of enough homes. The nation has an industry producing half the houses we need. What do the Government intend to do about the hoarding of building land? Our major housebuilders do not build to meet a need; they build so that they can sell at a good profit. Thus, on large sites with planning permission, builders will rarely sell more than 150 units per annum. This ensures that they sell the properties at a price to satisfy their shareholders.
What plans do the Government have to force or encourage a faster building programme? The Conservative Government’s reforms in the Housing and Planning Act will lead to less social housing being built, which will certainly affect young people from low-income backgrounds. How do the Government intend to address that problem?
Young people are increasingly having to stay in their family home with their parents because they are unable to rent privately and save a deposit at the same time. Those in Generation Rent have often had to spend more than half their monthly income on rent and household bills. The noble Baroness, Lady Dean, talked about 12 years to save a deposit. Sadly, at the end of those 12 years, the price of houses will have risen, so the deposit needs to be even greater. I echo the comments of the noble Baroness, but it is even worse than she said, because the price of houses rises.
Liberal Democrats have long called on the Government to set out a long-term housing plan to meet the housing needs of future generations. My noble friend Lady Grender said, and I repeat, that we should include a housebuilding target of 300,000 new homes per annum, including 10 new garden cities, targets for development on unneeded public sector land, the removal of the local authority borrowing cap, to which other noble Lords have referred, reintroduction of the zero-carbon homes standard and a government-backed housing investment bank.
The Government’s idea of what constitutes affordable housing is laughable. Tell the young that they can buy a starter home in London for £450,000. I am not sure that they will laugh; they will cry. The mortgage required will be on another planet for those in need of housing. We are told that an average home in the UK costs five times the average person’s income. I believe that in London, this is a gross underestimate. The young are in most cases earning less than an average income, which magnifies this insurmountable problem.
Meanwhile, rents have risen, which in turn results in increased housing benefit. Housing eats up 20% of typical family outgoings. What are the plans for garden cities, as only by a bold plan will we have any chance of solving the problem? Otherwise, we are just nibbling at the edges.
During the coalition, Liberal Democrats played a key role in helping young people to get on the housing ladder through the Help to Buy scheme, as my noble friend Lady Grender said, bringing empty homes back into use through the empty homes premium and increasing support for self-build. Can the Minister update your Lordships’ House on those initiatives?
An increased building programme needs an increase in apprenticeships and training in the construction industry if we are to meet our needs and objectives. Do the Government have plans for that need? What thought has been given to retaining the cohesion of local rural communities? Is there still a use for hostels? Have we as a nation failed to provide key worker accommodation for police and nurses?
We have not discussed the overseas purchase of properties for investment, which is destroying and reducing the number of houses for purchase and rent. They are often purchased by people from overseas off the planning board before they are even noted for sale.
Buy to let has distorted the market by reducing the number of homes to purchase to live in, although it has increased the number of privately rented properties. One current factor in the reduction of affordable homes to rent must surely be the rise of Airbnb, which does not fulfil a need for short-term lets. People must have a right, and even encouragement, to let out their homes for short periods—however, there must be stricter enforcement to stop multiple and professional landlords from converting long-term lettings into more profitable, short-term lets.
As the Motion states, the provision for housing which retains for the young a local and family connection has so many advantages, including that of family cohesion and stability.
Lord Kennedy of Southwark (Lab)
My Lords, I congratulate my noble friend Lord Griffiths of Burry Port on securing this debate today. I refer noble Lords to my entry in the register of interests; I declare that I am an elected councillor in the London Borough of Lewisham and a vice-president of the Local Government Association. Many of us agree that housing and the supply of housing which is truly affordable across a range of tenures—as my noble friend Lady Dean referred to—is crucial to ensuring that our communities flourish, and that it is so important for young people to be able to stay and be part of the communities where they were born, raised and educated, as my noble friend Lord Griffiths states in his Motion.
A number of factors come into play in the housing market, all sorts of statistics, plans and pledges. What is needed—and what the Housing Minister, Mr Gavin Barwell, says that he wants—is to build housing across a range of tenures. If he does this, he will have our full support. No debate on housing should fail to note and comment on the fact that home ownership is falling and is at its lowest level for 30 years here in the UK. The UK now has the fourth-lowest home-ownership rate in the European Union, after years of soaring house prices and soaring rents, which make it difficult for people, especially the young, to save enough money for deposits. According to the most recent comparable figures published by the European Union, only Denmark, Austria and Germany have lower home-ownership rates, which is shocking. If we want to help people to own their own home then we are going to have to do something about it—and the answer is not starter homes—otherwise we are on a path with an increasing private rented sector which does not work for everyone and a declining percentage of people who own their own homes.
A number of factors impact on young people’s ability to live in the community they grew up in, if that is what they want to do. In some cases, people want to move away, or work and other circumstances take them away, and if that is what they want then that is fine. But there needs to be a range of affordable housing that meets the need of the community. If we look at the statistics for population growth and the expected growth in the number of households, particularly the increase in the number of one-person households, we have a huge challenge to meet the projected demand for housing over the next few decades. The pressure on housing in all tenures affects young people particularly hard, as my noble friend Lord Whitty referred to. Some of the factors they have to cope with include the level of wages they earn, the level of rents in the private sector, the lack of social housing available to the young, the amount of income they spend on rent, and the ability to be able to save for a deposit if they want to buy. Looking at these points in turn we find that, on average, young people’s wage levels have fallen.
The level of rent that people have to pay in the private sector as a percentage of their income is a serious issue. We have all heard of Generation Rent, as referred to by the noble Lord, Lord Palmer of Childs Hill—young people who continue to face serious housing affordability problems. I have told the House before that I live in Lewisham; I often look in the window of my local estate agent and there are houses both for sale and for rent. It is very easy to find properties with rents considerably in excess of the median figure of £1,452 a month for a modest property in a part of south London. This is the problem. If you are a young person, your wages are lower than young people in similar circumstances were earning, say, 10 or so years ago, but rental costs are increasing and taking a larger part of your income, which makes your ability to save for a deposit to buy a home even more difficult, which can then force you out of the area you were born and grew up in because you just cannot afford the rent there.
I grew up on the Aylesbury estate in Southwark, and I am always grateful for the opportunities that living in social housing gave us. My parents were some of the first tenants on the estate. Although there were problems in later years with the design of the buildings, these homes took families out of some truly appalling, cramped, damp, dreadful accommodation. Both my parents worked, the rent was at a level that was truly affordable, the property was warm, safe and dry and we were very happy there. Thinking back to those days, I just do not see how my parents would have been able to cope if we were living in the private rented sector today, paying the sorts of rents that are commanded, while trying to bring up a young family, so council housing was very good for us. It was a step up and me and my three siblings are home owners today. Council housing helped us. Therefore, it is important to build social housing in large quantities to enable people and families to flourish, grow and better themselves. I feel ever more concerned that the Government see council housing as housing for the poor, people who are never going to be able to move on up, and that it is restricted to the smallest number possible. I hope that I am wrong on that, but unless we see real growth in the number of council homes and other social housing at rents that are truly affordable, we will stack up problems for ourselves and reap a terrible reward.
My noble friend Lord Griffiths of Burry Port was right to say that we can all trade statistics about who did what, who built this and who did that. However, as he said, we need to build more affordable homes. Why cannot we commit ourselves to the national plan for getting homes built that my noble friend called for? I agree with the noble Lord, Lord Horam, that we need to build more council housing. The noble Baroness, Lady Grender, called for private tenants to be able to find out whether their landlord was a rogue landlord. We discussed this many times during the passage of the then Housing and Planning Bill. She is absolutely right. Why cannot those tenants do that? I supported that call and the call for action on letting agents’ fees.
In conclusion, I again thank my noble friend for tabling this Motion and enabling us to again discuss the important issue of housing, and how we provide enough good homes to enable people to live in the communities in which they grew up.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)
My Lords, I thank noble Lords who have participated in this debate, which has touched on many areas and has been conducted for the most part in a fair, fluent and non-partisan way.
The noble Lord, Lord Griffiths, is a living legend in the Methodist Church. In my own Methodist church in Golders Green, he is very well known for being articulate and fair, as he was in setting out his stall today. I thank him very much for bringing forward this debate on an area of key importance. In relation to what he said about some of the work of the Methodist Church, I pay tribute to the work of faith bodies, which help massively with this agenda, as does the third sector—the charitable and voluntary sector. Indeed, the noble Lord, Lord Bird, has made a fantastic contribution via the Big Issue. We need to recognise that, whatever successes we have, there will always be a role for those sectors to help on a local basis. I am most grateful for that, as I am sure we all are. I recently visited a cathedral and found in conversation with the people there just how much they were doing to help people sleeping rough by providing meals and assistance. That indicates that in areas where there is a gap the faith-based institutions provide massive assistance.
I will try to respond in a non-partisan way as most noble Lords made very fair points. After all, all three major parties have been in government over the last 25 years and this problem has not suddenly arisen; it has existed for many years. There is no silver bullet. As I think all noble Lords have recognised, this is a very far-reaching problem. The one point on which we are probably all agreed is that the main issue here is supply. We are simply not building enough houses and not providing enough houses for purchase or for rent. That is undoubtedly true. To put that in context, some of that is exacerbated by demographic factors. The country’s population has grown in an unprecedented way in the last 10 to 15 years. Demographic changes have resulted in families being structured differently. We probably need to provide units for smaller families than used to be the case. Therefore, these factors need to be fed into the situation as well.
However, rising house prices have pushed home ownership further and further out of reach for families, for “just managing” families and for the young. My right honourable friend the Secretary of State has made clear that he agrees that this is a problem: we are simply not building enough houses. I thank noble Lords who mentioned the contribution that he and Gavin Barwell, the Minister in another place, are making to change the agenda, and it has been recognised that the Prime Minister regards this as a priority. Indicating that this is important has certainly been a hallmark of her coming into No. 10. With regard to announcements made on money for housebuilding, £3 billion will go to a help-to-build fund and £2 billion to direct commissioning. To relate that to points made by my noble friend Lord Horam, we have announced that we are putting money into direct commissioning and that there will be some pilots; we are looking into pilots in Gosport and elsewhere with regard to building in the public sector. I accept entirely the point made by the noble Lord, Lord Kennedy, about the importance of building in the public sector under both his part and mine, particularly in the 1950s and 1960s, which made a massive difference to the housing situation in this country. It is a different type of country now, and we will need different responses.
The noble Baroness, Lady Dean, talked about the importance of aspiration to home ownership and said that home ownership has fallen. It has fallen consistently since 2003 and has plateaued now. However, we certainly need to take measures, as we seek to do, to encourage home ownership and provide assistance for it.
We are being pressed to do two things, which are not inconsistent. One is to help home ownership, which is absolutely right. The other, which is also right, is to provide assistance for other forms of tenure; for example, to provide encouragement for the private rented sector. I think this will be reflected in the White Paper—we have not clearly nailed down the wording on housing yet—but as my noble friend Lord Horam said, this will see the light of day either this month or the next, therefore before recess, and will indicate some of the thoughts and challenges we face. I hope it will be a seminal White Paper that will look at some of the challenges we face and how we can transform the position, which means building far more. To come back to that, clearly it is partly about financial help; prices will come down if we are able to tackle the current shortage. The Neighbourhood Planning Bill, which will also come to this House before Christmas, does some things on compulsory purchase and planning, which will help that process, so it is not just about injections of cash but about seeing how we can make the planning process speedier. On the issue raised about people holding land and not developing it, again, I hope we will be able to use the housing White Paper to get thoughts on that so that we do not have long periods between planning permission and building. Those points were well made.
I will pick up some of the points that were made. I think the noble Lord, Lord Griffiths, referred to prefabs; we like to call them “modern prefabs” because they are very different from those that came before. They will make a massive difference and they come in some bold, innovative and rather attractive designs and have been broadly welcomed. A survey was done in the Daily Mirror in the last couple of days which indicated a 67% approval rate of these modern, 21st-century prefabs, so they can make a difference.
The noble Lord, Lord Whitty, said that this was a generational problem and that we are a lucky generation. That is undoubtedly true, and it is exemplified not just in this field but in others such as pensions. It is a fair point that we need to tackle these issues for the young on a moral basis, not just because of the housing issue but across the board, in many other areas. Again, I hope the issues raised by Treasury rules will be addressed through the housing White Paper.
The noble Baroness, Lady Grender, talked about the important work of Shelter. I underline and acknowledge that; it is an important partner. That does not mean we always agree with Shelter but it carries out important work in this sector. She talked about sleeping rough, and there is undoubtedly an issue, particularly in large cities such as London. In the most recent survey in England, it was found that 3,569 were found to be sleeping rough on a single night. That is clearly unacceptable and we need to see how we can address that problem. We are taking action on homelessness and money has been put there; I hope we can make use of the trailblazing money that has been made available for particular areas that have come forward with plans. We hope to roll out more widely the social impact bond, which operates successfully in London.
The noble Baroness, Lady Grender, also mentioned self-build. We are taking that forward. The policy was initiated by the previous Government but we are taking it forward. I took through the regulations in this House a couple of weeks ago. We hope that will help not only supply but with speed and design. In virtually every other country on the continent there are far more self-build houses than we have here. The attitude is changing here and I hope the regulations will help and be part of the answer.
The noble Baroness, Lady Healy, fairly raised the issue of women prisoners, who are often victims as well as offenders. That is absolutely true. I recently visited a troubled families programme where this issue came up. The matter is particularly acute because there are so few women’s prisons, which is a good thing but a difficult issue when the family is affected and the mother is some way away. I take the point that the noble Baroness makes about the need to provide suitable housing for them. The issue also ties in with domestic abuse and, as she probably knows, we are about to make an announcement of funding, which we hope will help in that area.
The noble Earl, Lord Listowel, had almost two bites of the cherry but I thank him for his contribution. He has done so much in the field of helping vulnerable children, children in care and foster carers. The Government acknowledge his work and the fact that he keeps us on our toes. Perhaps I may respond to him in writing on some of the more detailed aspects, and on other issues that have been raised, and will send copies to other noble Lords who participated in the debate. Any issues that I miss we will pick up in a write-around and ensure that all noble Lords are copied in.
The noble Earl, Lord Listowel, talked about children in care and I acknowledge that there is a particular issue there, as there is regarding children in foster care. He asked more generally about what we are doing about homelessness and young people. He will know that families with young children are prioritised for temporary accommodation, on which we are having to rely on far more than I or anyone would want. We obviously do not want it but it is better than the alternative. It remains a serious issue. I will write to the noble Earl on those points. I should like also to offer him the opportunity to speak with officials to pick up the issues and, I hope, involve the Departments for Education and Work and Pensions. It is a global issue.
The noble Baroness, Lady Dean, referred to the financial challenge of getting together a deposit to buy a house, which is a problem I readily acknowledge, along with the capacity issues she mentioned. I will take back her point about tax incentives, which have a broader compass within government, and look at the Treasury position, too. There is an incentive given as regards the right to buy when people are purchasing public sector property. However, I take her point that she is looking at this on a broader front.
I thank the noble Lord, Lord Palmer, for the long list of issues that he raised. I will certainly seek to write to him about them. He asked, for example, about garden villages, and we are taking that matter forward in relation to Ebbsfleet, Bicester and elsewhere. I will ensure that he receives a more detailed response that will be copied to other noble Lords.
The noble Lord also asked about rural homelessness. He is right that there is a particular issue there because wages are still lower in rural areas. We need to ensure that we have a supply of housing in those areas. At this point, perhaps I may say that there is often a tendency to respond in a certain way when we address these issues. As soon as the Government come forward with a plan to build more houses or to provide for a permitted development, whether offices or residential, there is a tendency to cry foul and say, “We want you to do something but we don’t want you to do that”. So I just temper what I say by adding that I hope we will get support for some of the detailed policy points. Generally, if we get support to do something, that translates across to necessary action. The rural situation is recognised. The department is discussing it with Defra; in fact we were discussing it yesterday. I hope we will be able to tackle it somewhat when the housing White Paper goes out for consideration.
The noble Lord, Lord Kennedy, put the case very fairly. Rightly, he sees that there is no silver bullet—no single thing that we can do. What is required is almost a change of attitude and a change of mood music, identifying that this is a really serious issue going forward. As the noble Lord, Lord Whitty, rightly said, it is a generational issue, as well as a serious political issue, and it ticks two important boxes, if I can put it that way. I hope that we will get a chance to look closely at the housing White Paper and, on a non-partisan basis, to see a way forward, ensuring that we do the right thing for the country and particularly for young people.
I thank noble Lords very much for their participation in the debate. I will ensure that all points are picked up and that a detailed response is sent. Once again, I thank noble Lords for a very interesting, important and well-informed debate.
Lord Griffiths of Burry Port
My Lords, I add my word of gratitude to the Minister and to all those who have taken part. It has been a very enlightened and, I think, non-partisan debate on an issue that we all recognise as very important. It needs a degree of urgency, which perhaps has not been commanded up till now. I thank all those who have spoken. I am glad that my speech, being not quite a sermon, triggered a response from the noble Lord, Lord Horam. I am very pleased to have received his words and I thank him for them.
Lord Horam
I think we are all glad that, at least in the House of Lords, the Labour Party still owes more to Methodism than to Marx.
Lord Griffiths of Burry Port
Perhaps the noble Lord will add to that and let me have it in writing. I repeat that I am most grateful. As I conclude, I just want to remind noble Lords that it is a great privilege of the life that I live that I have the ear of untold numbers of young people from a variety of ethnic and social backgrounds. In presenting my remarks, I have sought to articulate the point of view that they have helped me to formulate, and I hope that will add a degree of urgency to the way that we look at this issue.
Party Funding Reform
(8 years, 1 month ago)
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Lord Wallace of Saltaire
To ask Her Majesty’s Government what plans they have for further reform to party funding.
Lord Wallace of Saltaire (LD)
My Lords, party funding reform is rather like Lords reform: we come back to it every other year, or at least once every Parliament; we possibly get round to setting up a working group; the parties fail to agree; we go away and significant change is rarely made. I note that the last debate on the matter in this House came after the breakdown of cross-party talks in late 2013, and I wound up on behalf of the Government after the coalition parties had failed to come to an agreement between themselves.
The reasons for returning to the subject are very clear. The first is the funding of the referendum campaign, which had a number of troubling aspects. According to the report last month from Transparency International, more than half the total funding to both sides in the referendum campaign came from 10 sources, both individuals and corporations. Indeed, 95% of the funding came from as few as 100 donors. That is not exactly popular sovereignty or popular participation among the masses.
The absence of limits to cap individual donations is clearly becoming an acute problem in our democracy, and there have been other recent developments in the funding of politics. In the 2015 election, Conservative spending was far higher than that of any other party, and some of it was on the outside edge of current rules, as we can see from the number of Electoral Commission investigations at this time. The current situation builds in a structural advantage for the Conservative Party in access to finance and pushes other parties into chasing major donors, wherever they can find them, in order to compete. There has been a substantial increase in income from large donors. When writing about the resignation of the noble Lord, Lord Feldman, from the chairmanship of the Conservative Party, the Financial Times estimated that the Conservatives had raised £250 million under his chairmanship.
Then there is the question of more professional techniques—what the Russians call political technologies —which also cost a good deal more money: for example, computerised analyses using sophisticated search engines that allow personalised messages to be sent to assorted individual voters from central party organisations, and focus groups to refine messages. These techniques also mean that, within the parties, there is a shift in the balance of influence from local parties to the centre, which I think has caused a certain amount of discontent over the past few years in the Conservative Party, as well as in others. The competition among parties in this way means that there is a harder drive for funds. There has also been a rise in corporate donations to political parties, which the Transparency International report estimates as £125 million over the past decade.
We have also had the Trade Union Bill of 2015, on which a Lords committee reported in March. We still await the Government response to that, and perhaps the noble Baroness will be able to tell us something about that as she winds up the debate. I intend to leave further comment on that to my noble friend Lord Tyler, who was a member of the committee.
The continuing globalisation of wealth and the rise of the super-rich, living largely offshore, means there is concern in Britain and other countries about foreign donors and foreign donations—that is, from wealthy foreigners within the UK and from the British abroad, not on UK electoral register, who have been living in tax havens for a very long time. There is particular concern about the super-rich living in London from autocratic states such as Russia and the Gulf monarchies.
There are also concerns related to this House: honours for donors, from all parties. This is a recurring theme. Most famously, my father once met my party leader of many years ago, Lloyd George, so I can “almost” say that Lloyd George knew my father—there were several thousand other people in the room at the time, but never mind. More recently, I recall the investigations of 2006 and 2007. The Transparency International report identified that 28 Peers created over the past 10 years were created primarily for their donations to particular political parties—I stress that that relates not just to one party.
The popular and press assumption is that donations buy influence. They certainly buy access. The Conservative offer of special access for large donors in the Conservative Leaders Group, to which one pays apparently a £50,000 entry fee, is estimated to have brought in £5 million from 100 donors since January 2013. The attractions of this access are strongest when a party is in government, and build in a structural advantage for a party in government. Mr Cameron’s resignation Honours List has increased concern still further, but I stress again that all parties take part in this competition, partly because they have to.
Recent proposals from the Government to cut support for opposition parties by imposing cuts in Short Money and Cranborne Money have also raised issues about funding for democratic activities. There was a clear perception that the Conservatives were trying to bias the political rules in their favour, including those for party funding, which feeds into popular cynicism about politics. Then this August, we had a letter from the Chairman of the Committee on Standards in Public Life, to which I hope the noble Lord, Lord Bew, will refer in his speech.
We have seen the developments in the United States, where the extraordinary influence of the very rich on politics is becoming even greater, where congressional politics is distorted by the continual search for campaign funding, and where Donald Trump has funded a great deal of his own political rise. That does not yet happen in our politics, although in Richmond Park we have someone who has very substantially funded his own political rise. We have seen the aggressive political campaigning that the use of major funds allows in the United States, and we have seen the politics of fear in similar campaigns in this country. All this drives popular mistrust of politics as such as a plaything of the rich, as inherently corrupt and as excluding the voices of ordinary people. A Transparency International survey suggests that 76% of respondents think that rich people have undue influence on politics, and 28% think that all politicians are corrupt.
That raises some major issues. The funding of the Vote Leave campaign and the role of Arron Banks and the company he founded, Better for the Country Ltd—which appears not only to have given £2 million to Grassroots Out, but to have lent £6 million at a nil rate of interest to the Vote Leave campaign in three separate transactions—raise large questions about getting around current rules about party funding.
All parties pledged further reform in their 2015 manifestos and all have particular preferences to defend. We need to reopen cross-party talks and recognise that we need a serious intent to achieve at least some limited reforms to restore public confidence in participatory politics. We all know what happens if people do not feel they have a chance to engage in parliamentary politics—politics moves on to the streets. We have seen that once or twice in the last 15 years and it could easily happen again if there is a strong sense that politics in Britain has become dominated by money, and in particular money to the advantage of a particular party.
Francis Bacon said at the beginning of one of his best essays,
“Money is like Muck, not good except it be spread”.
That is a good democratic principle. We could agree that limits on corporate donations and trade union donations should have to be considered together. We could agree a cap on donations to start at £50,000 or even £100,000, and then gradually reduce it. We should at least consider making individual donations up to a certain level open to gift aid, comparable to charitable donations contributing to public life. We need to strengthen the policing role of the Electoral Commission in local as well as central spending, and in campaigning innovations. We need to police donations from outside the UK more carefully, and possibly from ex-pats—no representation without taxation. Our overall aim must be to reduce the impact of money on politics, to widen the pool of donors, and to encourage ordinary citizens to contribute and feel that they are making their own contribution to democratic life.
Lord Leigh of Hurley (Con)
My Lords, first, I apologise to the House and to our friends in Hansard for my voice. It is not at its best, having completed a half marathon for Water Aid just a short while ago. I should also make a declaration of interests, not all of which are in the register of interests because they are not required to be so, but I am a senior treasurer of the Conservative Party, and I have been a treasurer of the party for some 16 years. I am also chairman of the aforementioned Conservative Leaders Group. I hope to remain in the job and that it does not become redundant. I congratulate the noble Lord, Lord Wallace, on securing the debate. Surprisingly, I agree with quite a lot of what he has said. Somewhat ironically, he and I both served on a committee to investigate aggressive fund-raising by charities. I hope that there is no need for a committee to look at aggressive fund-raising by political parties.
I start from the initial premise that parties ought to be self-sufficient and not reliant on state funding for their resources. I was lucky enough to be invited to the ACRE dinner this week at which the Edmund Burke award was presented to John Howard, the former Prime Minister of Australia. We were reminded that the source of political parties some 220 years ago, largely thanks to Edmund Burke, was created from a loose coalition of people who had roughly the same ideas. Since then the precise nature of a political party, its ownership, rules and structure, has changed and evolved over time, and unlike the emergence of limited companies or professional partnerships, they are complicated organisations which defy the normal textbook rules of ownership and governance.
While some countries have looked to the state to finance independent political parties, we in the UK have had a very proud history of ensuring that our political parties are just that: independent and not reliant on state financing. State funding, in my view, would be a dangerous road to take and could threaten the existence of political parties. It would be extremely unattractive and unacceptable to most people in the UK to see our political parties in any way dependent upon the state, which then might have influence, directly or indirectly, with direct or indirect threats, nudges, promises, hints—however subtly done—about the ongoing nature of that state funding.
We can be proud that in the UK we have a plethora of parties at the moment, all of which exist because people with passion and vision have helped to create them and have invested both their time and their personal financial resources to make them what they are. I accept that there is some sort of soft state funding in the form of Short money, and I note that the other place has voted for greater transparency in this source of funding. Perhaps we could see the same for Cranborne money, all of which is, of course, taxpayers’ cash. Disclosure and transparency is the key. The Conservative Party is unique in that every member of the Conservative Leaders Group—[Interruption]. I will carry on.
As I say, there is some soft state funding through the Short and Cranborne money, and there has been a move in the other place for greater transparency. I think that the Conservative Party is unique in that members of the Conservative Leaders Group who attend dinners with Prime Ministers all have those names disclosed on a quarterly basis. That is not a legal requirement, it was something that David Cameron proposed voluntarily and it continues to this day. Again, I believe that disclosure and transparency is the key against any undue influence.
In my opinion, party funding is not, in the nature of the world, big money. Big money does not go to the parties and is not needed by the parties. I know that the noble Lord, Lord Wallace, will not agree, but the sums involved are small and they are decreasing. In the 2015 election, the total spending by all parties was £37.25 million as opposed to £31.5 million in 2010. All the candidates combined spent a further £11.7 million in 2015 in the short period as opposed to a much higher £14 million in the corresponding 2010 short period. Additionally, if one looks at the long period in 2015, the spend was £10.7 million as opposed to £11.2 million in 2010. Overall, the important numbers are as follows: £59.8 million was spent in the whole of the 2015 election as compared to £56.8 million in 2010. The whole of that increase is explained by the Labour Party’s spend in 2015 of £12 million, as opposed to £8 million in 2010, so congratulations must be extended to the new Labour Party treasurers on doing a great job, more on which anon.
Let us put these sums into context. To run your Lordships’ House alone costs some £100 million a year, just on day-to-day expenditure, excluding capital costs. Each and every year this House spends more on running costs than the whole amount spent in a general election in the UK by every political party combined, and that is only once every five years. Looking across the pond at the topical American elections, which the noble Lord, Lord Wallace, invited us to do, the figures are extraordinary and give us some perspective. As of last week, the disclosed figures are that the Democrat party had raised $1.3 billion and the Republicans some $800 million for the 2016 election alone. The predictions have been for a total spend in the US elections of some $5 billion, which is quite some distance from our £57 million.
It is perfectly true to point out that the Conservative Party manifesto made a commitment to,
“continue to seek agreement on a comprehensive package of party funding reform”,
but the key word in this sentence is “agreement” rather than “reform”. It is worth pointing out that on the same page of the manifesto is a pledge to,
“cut the cost of politics”,
which seems to rule out any state funding. We are therefore left looking only at existing donors to parties. I wonder whether my noble friend the Minister would agree that we need to do more to encourage individuals to be donors to political parties, and that people will be so encouraged only if they feel a sense of pride in their contribution to British public life through these donations. At the moment there is a very unhealthy and unsatisfactory tendency for people who choose to donate money to political parties to be castigated for so doing. Currently the press uses the adjective “party donor” as a pejorative term. In reality, of course, the reverse is true.
All of us who have had any involvement with campaigning on the ground, as I think nearly every Peer speaking will have done, come across those who give their time tirelessly to a political party. I disclose my interest in this as president of the Westminster North Conservative Association.
Lord Taylor of Holbeach (Con)
I must remind my noble friend that this is a time-limited debate. He is limited to eight minutes and he has now had eight minutes.
Lord Leigh of Hurley
I am most grateful to my noble friend. I apologise. There was a disruption in the middle of my speech.
I conclude by saying there is room for further progress on party funding reform, which will be to the benefit of all parties, to be achieved through agreement between them around a table—perhaps with the people here tonight—rather than elsewhere. But what is paramount is that we encourage citizens to step up to the plate and be proud of their role in helping UK political parties, of whatever colour, and that the Government take their part in achieving this ambition.
Lord Whitty (Lab)
My Lords, like the noble Lord, Lord Leigh, my voice might give out, so I will try to keep it brief. I do not have the same excuse as him, either.
Like others on the speakers list, I served on the Select Committee on the then Trade Union Bill a few months ago, under the chairmanship of the noble Lord, Lord Burns. That was in the context of a Bill to restrict activities for trade unions. It focused on the political funding for one party and from one source. The Bill intended to put restrictions on, and increase greater transparency of, that source, I think its proponents would say. Following the Select Committee, its recommendations and decisions of this House and of another place, some of those restrictions were slowed down, but nevertheless they will have a serious impact on the ability of trade unions to fund political parties, and therefore on the funding over time of the Labour Party.
I did not support the proposals in the Trade Union Bill. I do not really approve of even the revised proposals. But the important point tonight is that those changes affected one source of funding and, in effect, one political party. They had no effect on other institutions or individuals, and no effect—as it stands at the moment—on other political parties.
As I have said in the House before, in the five years up to the last election about £148 million was given in political donations by organisations as distinct from individuals. Some £65 million of that was from trade unions; therefore more than £80 million was given by other organisations. Trade unions are all required to have a separate political fund; they are all required to make a decision on that political fund and its retention every 10 years; they must all allow a member to opt out of it and, as a result of the Trade Union Act, members will eventually be allowed only to opt in. None of the other organisations, companies, trusts, friendly societies or partnerships which make the bulk of the institutional donations to parties—the great majority of which go to the Conservative Party although some of it goes to other parties, including my own—has such restrictions applied to it. There is now a requirement for listed companies to take a vote, but only once and without any separate political fund.
Although I opposed the restrictions on the trade unions, the whole experience of that Select Committee brought home to me yet again the unfairness and lack of principle underlying our rules on political funding. I think that I can speak for all members of the Select Committee, including those from the Conservative Party, in saying that we were shocked when Ministers came to tell us that absolutely nothing had been done by the Government to fulfil their election manifesto commitment to seek agreement with other parties. We noted this in paragraph 138 of our report and urged the Government to reconvene cross-party talks and seek agreement. In the months since then, nothing has happened. Like the noble Lord, Lord Wallace, I hope that the Minister will tell us tonight what is being done to address this issue.
This is not just a question of equity and balance between parties; it also relates to the health of our democracy. It is not healthy for any political party to depend on significant donations from the super-rich—and a very limited number of them. It is not healthy for a decreasing number of institutions, large corporations or private companies to provide support to political parties. I also accept that it is not healthy for a political party to depend solely or mainly on the admittedly reduced sources of funding from trade unions either.
We all know that in principle none of this is justifiable to the public or, quite often, to ourselves. We all know that we need to look at the level of political expenditure. The noble Lord, Lord Leigh, said that it is small here compared with other things, but as far as the public are concerned it is still a significant overspend, particularly in general elections. We need to look at limits on such expenditure and at enforcement of limits at both national and local level by the Electoral Commission and others.
I disagree profoundly with the noble Lord, Lord Leigh, that state funding should be excluded. We have the lowest level of state support for political parties in the whole of Europe and many other parts of the world—there is even significant state funding in the United States, even though you would think that they were awash with money in the first place. The health of and support for those other European countries’ political democracies are not diminished by a significant role for state funding in their operations. I do not want utter dependence on state funding; I hope with others for more encouragement for small donations to political parties and for a wider range of institutions to give relatively small donations. However, there is a role for state funding; it is not an entirely new principle—we have significant funding in terms of Short money and Cranborne money. We also have security subsidies for our conferences and freepost at election times; and, if one counts the BBC and the other television companies as part of the state, we have free airtime for party-political broadcasts.
So it is not a principle but, when we look at it again, the balance between state funding and the form of that political funding should be part of that review. As we said in our Select Committee report, the reality is that the public do not like the present situation. They consider it unhealthy and potentially corrupt. The prospect of state funding of political parties by the taxpayer is not particularly popular either, but in terms of balance it may well be regarded by the public as the lesser of two evils. I do not wish to see a situation where political parties are utterly dependent on the state, but I see state funding, along with limitations on the level of expenditure, as part of the package. Above all, as we said on the Trade Union Act 2016, whatever comes out of the talks that I hope that the Minister will tonight announce will be convened must be equitable between political parties, and seen to be by our electors.
Lord Oates (LD)
My Lords, the rules that govern the funding of political parties are a barometer of the health of a democracy. Where lack of transparency and the domination of big-donor funding prevail, politics is undermined and democracy sickens. One only has to look across the Atlantic, as has been alluded to by other noble Lords, at what is going on in the current US election to understand the corrosive dangers of big money distorting democratic ideals and undermining popular faith in what, until recently, has been the remarkable genius of democracy in America.
We have been relatively fortunate in that our party funding rules, the relative transparency of our system and the general practice that has been adhered to compares favourably with many other democracies in Europe and around the world, but we should not be in any way complacent. There is a crisis of democracy around the world and we are not immune from it. Public faith in politicians is at an all-time low, brought about in part by a series of scandals and suspicions around party funding. No party is immune from error in this regard and it would be a brave person who would preach from the mountain top on this subject when, too often, party funding rules have operated in the valleys. Political parties want advantage and money buys advantage, whether through more party staff with greater skills, a bigger budget to deliver direct mail into the homes of constituents or the funds to buy social media advertising. Increasingly, it buys the capacity to crunch bigger data and tailor individual messages.
So it is no surprise that parties want the money to out-compete one another. Nor is it any surprise that the party with the advantage is unlikely to wish to give it up and almost by definition—although not quite—the party with that advantage is most likely to be the party in government, and therefore in a position to make or break party financing reform; which, with honourable exceptions they nearly always break. At each election in recent years the main parties have promised comprehensive party funding reform but almost always it does not happen, although it should be noted here that the Labour Party in power after 1997 did much to make our system more open and transparent and got precious little thanks for it.
In 2010, the Liberal Democrat manifesto promised that we would:
“Get big money out of politics by capping donations at £10,000 and limiting spending throughout the electoral cycle”.
The Conservative Party manifesto boldly proclaimed:
“We will seek an agreement on a comprehensive package of reform that will encourage individual donations and include an across-the-board cap on donations. This will mark the end of the big donor era and the problems it has sometimes entailed”.
Labour’s manifesto stated rather more modestly:
“We will seek to reopen discussions on party funding reform, with a clear understanding that any changes should only be made on the basis of cross-party agreement and widespread public support”.
In doing so, it gave the Conservative Party the perfect let-out during the coalition talks on this subject, which it eagerly took advantage of. Undaunted by the failure to reach any sort of agreement or understanding in the 2010 Parliament, the parties were back at it in their 2015 manifestos, although the Conservative Party, having spent some time in government, had rather more modest promises this time.
Despite all that, nothing has happened and nothing looks likely to happen. The Conservatives currently hold the advantage and, as the rather extraordinary complacency of the speech of the noble Lord, Lord Leigh, suggests, they have absolutely no intention of giving it up. This is worrying because while we may fare better than other countries around the world, we have done so because we have had comparatively tight rules on election funding at constituency level and because the transparency rules and other changes introduced after 1997 helped shine a light into hitherto dark corners.
If a democracy is to function in the interests of the electorate and not of a wealthy few, it is imperative that it cannot be bought by wealthy individuals. Here the funding and expenditure rules drive each other. Back in 1997, when I was first an election agent, the rules on constituency expenditure were pretty tight and were carefully monitored by all the parties. The amount you were allowed to spend was modest and it was possible for anyone who had significant public backing to raise funds for a constituency campaign. Rules on national spending in constituencies were adhered to, so that direct mail funded from party headquarters could not mention anything that would identify it as relating to a particular constituency.
Those rules were largely adhered to in 1997, 2001 and 2005, when I was last involved in running a campaign. But at some point after that, either the rules changed or the parties’ interpretation of them did, because in the 2015 general election there was a deluge of nationally funded literature into marginal constituencies from the Conservative Party. I was deluged with a large number of letters and leaflets from Mr Cameron, telling me that while I might very much like my local Liberal Democrat MP—as it happens, I did; I was his best man—in Kingston and Surbiton I simply could not take the risk of Ed Miliband and Alex Salmond running the country. In case I was in any doubt as to how ghastly a prospect that would be, these letters and leaflets were helpfully illustrated with a picture of Alex Salmond and Ed Miliband standing on the threshold of No. 10. I have never asked my Conservative friends why it was Alex Salmond instead of Nicola Sturgeon but I think I probably know the answer. More pertinently, I am not quite sure why they thought that the Deputy Prime Minister’s chief of staff was a potential swing voter, but that is a whole different matter.
The serious point here is that the volume of direct constituency-focused mail is significantly distorting the political process. We have recognised the principle of limiting constituency spending in law but that principle is no longer adhered to in practice, and the impact is to make national funding of political parties a much more significant factor in the election of our local representatives. Therefore, the need for funding reform is even more acute. It is not just the funding of political parties we should be concerned about. As my noble friend Lord Wallace of Saltaire has outlined, the funding of the recent referendum campaign is a cause of very serious concern. As he said, popular sovereignty it certainly was not.
We have the basic building blocks of a fair and equitable funding system via the 2011 Committee on Standards in Public Life report, although we believe that additional state funding is not required and the redistribution of existing funding could work. We need to act now; if we do not, our system will increasingly be distorted by big money. As the governing party, the Conservative Party needs to live up to its 2010 manifesto commitment to end “the big donor era”.
Lord Bew (CB)
My Lords, I thank the noble Lord, Lord Wallace of Saltaire, for his initiative in raising again this very important issue of party funding in modern Britain. I speak as chair of the Committee on Standards in Public Life. Our report of 2011 has been referred to a number of times, as well as my various letters to Prime Ministers—plural, now—and the leader of the Opposition on this subject. As I have said in this House before, the replies that I received from the Conservative Party have not exactly raised my hopes of dramatic reform in the near future. It is a matter of justice to say that today I received a letter from the Labour Party, and I can assure your Lordships that it did not raise my hopes either. There was really no difference in helpfulness in that hapless correspondence with my office.
During the passage of the Trade Union Bill, the 2011 report of the Committee on Standards in Public Life was discussed. I said then that we were aware of problems with that report. I genuinely believe that its basic approach, its insistence on consensus and cross-party agreement and its attempt to provide the basis for that was completely right. Although the Conservative and Labour members of our committee both dissented, I think they were sympathetic to the broad approach. They both had disagreements on points to which I will return. But I was also well aware that, five years later, some of the statistical material in our report was now out of date.
I promised on the Floor of this House that the Committee on Standards in Public Life would commission new research, and we have so done. The work we commissioned from the distinguished academic Dr Michael Pinto-Duschinsky, who has worked in this field for a long time and advised the committee on a number of occasions in the past, is published in your Lordships’ briefing pack for this debate. I will not refer to that work, which brings the figures up to date—although it touches on the point raised, for example, by the noble Lord, Lord Leigh, on whether there really is an arms race going on in electoral expenditure. That report has been published and in that respect, I have kept my promise to the House. I add that today we are publishing a second report, based on YouGov polling which we commissioned earlier, by Dee Goddard of the University of Kent. For simplicity, I will call it the Goddard report.
That report, Public Attitudes to Party Funding in Britain, has been published this afternoon by the committee and is available on our website. Because we have limited time, I will obviously not go through every point but it is an important addition to the already important work published by Dr Pinto-Duschinsky. The Goddard report shows that the issue of party funding is considered of greater importance than it was the last time YouGov did this polling in 2011. A substantial majority of respondents, 93%, believe that large party donations are motivated by hopes for influence or special favours—the most obvious example being peerages—from a given political party, while 79% of those asked believed that this was a common motivation for donors. Equally, on the other side of the argument, I totally accept that all our previous polling shows that 80% of the British people do not want to see state funding for parties. One immediately sees the complexity and inherent difficulty of this issue.
Ninety per cent of respondents in the new report believe that MPs “very often” or sometimes decide what to do based on what their donors want, rather than on what they really believe. Even 48% of those who said that they had high trust in their MPs believe that sometimes the interests of donors played a role in political behaviour. The public are clear in their belief that this behaviour is unacceptable: indeed, they are probably more concerned than they were over the role of large donations in British politics. That said, because nothing is served by presenting an oversimplified picture of this debate, when they were asked about a cap on donations 42%—a largish block—said that they did not know whether it was a good idea or what the level should be. Again, that indicates the difficulty and complexity of public attitudes. But it is the role of my committee to at least bring attention to the most up-to-date information that we can to further debate.
In September, the Institute for Government produced a report using data based on more recent polling—our polling was done in April and May. The report was headlined:
“Trust in government is growing”.
That surprised me as over the years I have read endless reports showing that it was dropping. The report showed that more people now believe that the Government are doing their best and have proper priorities than believed it in 2014. The figure is up by 8%. Equally, the number of those who believe that MPs are self-interested persons concerned only with their re-election is down by 8%. At the moment, there is a slight upwards spike—a better direction than the normal pattern of gloomy figures about trust in politics. I have never believed that one should take these figures too seriously because trustworthiness is a different thing, but the public have these concerns and we cannot afford to ignore them, while not taking these matters absolutely literally. There is a slight spike upwards and trends are more positive, but the Institute for Government is quite right to say in its headline that further work is needed on this point.
Expectations have clearly been raised by the change in government. There is no doubt that they have been affected by the Prime Minister’s speeches about standards in public life, and trust is an issue she has directly addressed. We are in a honeymoon period. We have temporarily reversed the downward trend, which is a good thing. If we choose to do absolutely nothing in these controversial areas of public standards—not just party financing, but lobbying and a range of other difficult issues, including revolving doors and so on—we will create a mood of disappointment, and things will plummet again. On party funding, it is clear that work could be carried out to promote small donations. It is entirely right to draw attention to these better figures, but I counsel against any complacency. Things cannot be left exactly as they are, even though I concede the inherent complexity of these issues of public funding.
Lord Sherbourne of Didsbury (Con)
My Lords, it is a pleasure to follow the noble Lord, Lord Bew, whom we had before our committee earlier this year and whose contributions are always extremely thoughtful and balanced.
We all agree that political parties are essential for the effective working of our democracy and that political parties need proper funding, but parties need more than money. They need popular consent, support and membership; otherwise they become the preserve of the political elite or, worse still, a part of the state. So the debate over party funding needs to take place in that wider context.
One of the great challenges facing western democracies today is that millions of people have on the whole tended to have less confidence in mainstream political parties. There is, as we all know, a growing disconnect between people and those whom they see as the political elite. It is happening in America and in parts of Europe and it is certainly happening here, so my starting point is that any reform of party funding should aim to halt that trend and, better still, to reverse it. I am therefore opposed to any change which would discourage and reduce voluntary donations to political parties to the extent that the state would then be called upon to step in to fill the gap. I accept the need for Short money and Cranborne money, but I am totally opposed to general state funding of political parties. If we were to go down that road, it would only confirm people’s suspicions that there is a self-appointed political elite running the show.
Political parties have a responsibility to go out and seek support, and they should not subcontract that job to the state. We know it can be done. Just look at recent developments. UKIP broke the oligopoly of the major parties in England, the SNP has broken the oligopoly in Scotland and Jeremy Corbyn’s leadership and appeal has swollen the membership and the coffers of the Labour Party. If we look at our democracy from that broad, non-partisan perspective, I see these as really interesting and in many ways encouraging developments. It is worth noting that both UKIP and the SNP have been the recipients of substantial donations from rich individuals. Would our democracy be better or worse off if those donations had been precluded by law, if those parties had never risen up and if their supporters had never been given a voice or representation?
We should not look at the question of party funding as if the party structure were permanent. A reformed system of funding should not freeze the status quo, it should not erect barriers against new entrants and it should not deter the rise of new parties where there is support for them. But if we are not careful, these could be the unintended consequences.
Let me paint a scenario which could perhaps occur. Donations are capped, the state then steps in to provide more funding from the taxpayer and as a quid pro quo there is felt to be a need for parties’ expenditure to be capped—all of this to be decided by an unelected Electoral Commission on which will be sitting members appointed by the leaders of the political parties. Meanwhile, local parties have less and less incentive to go out and raise money and recruit new members. The result? The political elite are further entrenched and the general population further alienated.
As the parties edge bit by bit along the road towards consensus on gradualist reform, as I hope they will, I also hope that they will keep all this in their minds.
Lord Wrigglesworth (LD)
I am very pleased to follow the noble Lord in the comments he has just made. We are all anxious about the consequences of not doing something about this subject, and I have a tremendous sense of déjà vu this evening, because of the debates that have been held so often in the past on this subject. The solution to the problem that the noble Lord has just outlined lies with his own Government and with the Conservative Party. If they are not prepared to see reform taking place, and not even prepared to call all-party talks to try to get agreement, no progress will be made and the electorate will rightly be cynical about manifestos which promise things that are then not carried out. The Conservative Party manifesto, on this subject, is frankly not worth the paper it is written on, because none of the things that were suggested in it have been done.
We know from our experience in the coalition Government—from the Deputy Prime Minister and David Laws speaking to colleagues from the Conservative Party—that the Conservatives were not prepared to carry out what they had committed themselves to in their own manifesto. If the £50,000 cap that was promised had been introduced, a lot of these problems would not have arisen. I do not agree with the noble Lord about the cap having consequences. It would get rid of a lot of the cynicism about major donors running or influencing parties in their own interests, but it would also—I speak as a former treasurer of the Liberal Democrats—force the parties to go out and get more donors.
Look what President Obama did in the United States with crowdfunding; look what lots of venture capitalists are doing with it. If you want to do it, and make the effort, you can get the money from a substantial number of people. As party treasurer, I raised as much for the Liberal Democrats as the Labour Party raised from individuals and small businesses. In fact, most of the time I raised more, as the Labour Party has not historically needed to go out and get those individual funds in, because it has had the trade union funding. It would be an incentive if the cap was introduced, as well as getting rid of a lot of the electorate’s cynicism towards the funding of political parties.
The Labour Party has shown that it is willing to shift its view. It introduced legislation when it was in government, and the report of the noble Lord, Lord Collins, which we looked at, which will lead to reform in the funding of the Labour Party, was a substantial step in the right direction—which I, frankly, never thought it would take—moving to individual donations.
The Government’s response tonight is crucial. Are we going to make progress on this issue or not? I think the Labour Party is willing to have discussions; the Liberal Democrats certainly are; I do not know about the other parties.
Look at what happened in the coalition days. The Deputy Prime Minister called for all-party talks—my noble friend was very much involved in that. We had a response from the Labour Party; we Liberal Democrats gave a response. We waited and waited for a response from the Conservative Party, but none was forthcoming until there was a scandal which led to the Conservative Party treasurer having to resign. On the day that that story broke in the Sunday Times, all of a sudden, the Conservative Party came up with nominees for the all-party talks. Surprise, surprise.
So I am deeply cynical about the seriousness of the party opposite ever reforming the system. I suspect that it will always be other parties that will introduce the reforms that are so necessary.
State funding could come in many forms. As the noble Lord, Lord Sherborne, said, there is already substantial state funding of political parties. I think the noble Lord referred to it as soft funding. Soft, hard, or whatever, it is a lot of money. Providing the funds for political parties to mail virtually the whole of the country with election addresses during a general election is a substantial amount of state funding. So are the Short, Cranborne and other funds that come in from the state. The principle has already been established; it is not new.
I do not know whether noble Lords opposite would be prepared to consider another alternative—giving tax relief to parties, as happens with charitable donations. There is a respectable argument for doing that. I agree with the comments made earlier that funding political parties is a noble thing to do. Democracy would be nowhere without resources being found to run our parties, and we should praise individuals for being prepared to support them by making contributions. If we believe that, we should consider tax relief on contributions. I do not know whether noble Lords opposite would regard that as state funding or whether they would be prepared to consider it.
There are various ways in which this problem could be overcome, but it will not be unless we all sit down together to talk about it. There is an immense obligation on the Government to get talks under way. It is the cynicism bred by parties breaking manifesto commitments and not doing the things they say they will that leads to the growth of the protest vote through the UKIPs of this world—and, indeed, the Trumps in the United States—those disillusioned with existing parties for not carrying out the things they say they will.
I urge the Government immediately—I hope that we will hear this from the Minister this evening—to get talks between the parties under way to try to reach some sort of agreement. With his report from the Committee on Standards in Public Life, the noble Lord, Lord Bew, has given us immense help and information to point us in the right direction. There is an agenda there that could achieve progress, and I very much hope that we will hear from the Minister this evening that that is what the Government are going to do.
Lord Tyler (LD)
My Lords, I start with a quote:
“Whether or not clause 10 is enacted, in whatever form, the political parties should live up to their manifesto commitments and make a renewed and urgent effort to seek a comprehensive agreement on party funding reform. We urge the Government to take a decisive lead and convene talks itself, rather than waiting for them to emerge”.
That was the unanimous recommendation of a Select Committee of your Lordships’ House, chaired by the noble Lord, Lord Burns, and which represented all groups in the House—three of which are here this evening, I am delighted to say—and it was of course subsequently welcomed on all sides of the House. The report was published on 2 March of this year. The convention is that the Government respond to a Select Committee report of your Lordships’ House within two months. It is now six months later and we are still waiting for any sort of response, let alone any action to fulfil that recommendation.
The Government are clearly becoming increasingly apprehensive that the traditional role of your Lordships’ House as the impartial guardian of the constitution, semi-detached from the rather more tribal activities at the other end of this building, will prove more popular than their own narrow partisan approach. Perhaps we should remind the Government that they were elected with less than a quarter of the eligible electorate giving them their support, so they have a doubtful mandate.
The Government should also be reminded, as they were by the Select Committee of the noble Lord, Lord Burns, that the Conservative manifesto had an explicit promise, as we have been told this evening:
“We will continue to seek agreement on a comprehensive package of party funding reform”.
Since the 2015 election, further evidence has emerged of the extent to which all parties—as my noble friend Lord Wallace has said—are now reliant on a small number of large corporate bodies and individual millionaires, when we all want to step away from that and try to make sure that we have a greater number of small donations. It is extremely important, as my noble friend Lord Wrigglesworth has just said, that we should look again at giving encouragement to smaller donations through a replica of the gift aid scheme that is available to those donating to charities.
Millions of modest donors must be better than millions of pounds from a very small group of special interests, trying to buy access, influence or patronage. That includes—as I think the noble Lord, Lord Sherbourne, would accept—those who have been supporting UKIP, and indeed the SNP, which have been reliant on a small number of very big millionaire donors. His argument would also go in the same direction.
I think we are all grateful to the noble Lord, Lord Bew, for giving us some brief information about this latest poll that the Committee on Standards in Public Life has commissioned. That is really useful and we will all look at it with considerable interest. But I just remind him that the last time that there was an indication of the public’s attitude to this, 77% were saying that big donors have too much influence—that would seem to have risen. However, at the same time, 57% believe that state funding of politics is better than the present system when there is a direct comparison, which has gone up from 41% in 2014. So it is not such a clear picture about the state funding issue as has been suggested.
As my noble friend Lord Wrigglesworth has said, if you simply reallocate existing state funding—free postage being an obvious example—you could save a huge sum of money which could be better allocated to good effect. The noble Lord, Lord Bew, summarised the situation excellently after the general election when he said that:
“It is clear after the General Election that the issue of party funding remains a matter of significant public concern centred on the confluence of money, power and influence”.
I thought that his speech this evening underlined that brilliantly. Since 2015 and the CSPL report—and indeed since the general election—there have been some important changes in the relationship of the Labour Party and its main funders, but no movement on the Conservative side. The time is now really ripe for some movement there.
It is not just the donations issue that is resulting in the ever-decreasing public confidence in these aspects of our political system.
In the 12 elections that I have contested—I have won some and lost some, as we all have—I have always been reminded by my agent that every single pound spent to promote the candidature has to be carefully recorded, and, of course, it is restricted; otherwise, you could face an election court, with the potential for disqualification. My noble friend Lord Oates is absolutely right: the law that has been in place since 1883 to prevent anybody with large amounts of money seeking to buy a constituency, and thereby own the Member of Parliament, is now being circumvented by the current situation. The present rules are inadequate and simply do not meet the case.
The independent Electoral Commission said in its report on the 2015 UK parliamentary general election, published in February of this year:
“These experiences from the 2015 UKPGE reinforce our view that the relationship between regulation of candidate spending and political party spending that has been in place since PPERA was passed in 2000 needs closer examination. The law currently only requires political parties to report spending against separate limits for England, Scotland, Wales and Northern Ireland, which means it is difficult to assess whether and where political parties are choosing to target their spend, their campaign funds on a regional or constituency basis”.
Evidence to the Burns committee reinforced that. We had evidence in particular from the Minister in the coalition Government who was responsible for these matters, who told the committee that,
“the local constituency-wide spending limits were made a mockery of, first, because all this stuff was being mailed out centrally and, secondly—one has to acknowledge—because of some very ingenious, intelligent and smart, if ruthless, use of digital technology, which costs money … Some of the hired guns of the Conservatives are already on public record as saying they spent far more than they should have done, but the question beyond that is that those slightly old-fashioned constituency-level limits can be easily circumvented through central funding, or through the use of … database campaigning techniques”.
I say to the noble Lord, Lord Leigh, that Jim Messina, who claimed that the Conservatives spent £30 million, far in excess of the national limit of £18.5 million, seems not to agree with him that there was not a general increase.
The Electoral Commission has made firm recommendations on this issue. Clearly, we have to listen to it because it is the statutory body responsible for electoral law. Since then, we have had the referendum, to which my noble friend referred. I simply say that I think the time has come to move on. Indeed, the report by the noble Lord, Lord Hodgson, on third-party campaigning adds to the need for a level playing field of funding constraints between them on one side and the political parties on the other. Taken with the CSPL evidence and the Burns Select Committee and, indeed, the report and draft Bill produced by the cross-party group in 2013, there is simply no excuse now for further delaying tactics.
Baroness Hayter of Kentish Town (Lab)
My Lords, this has been an interesting debate on an important issue. There is a lack of trust in parties, and therefore in the political system, which is deeply unhealthy. We have a duty to work to restore confidence, and tackling political funding is a vital part of that. The Kelly Committee on Standards in Public Life emphasised not only that,
“the regulatory regime must be fair to all political parties”,
but also must be,
“widely believed to be so”.
As my noble friend Lord Whitty made clear, the then Trade Union Bill failed this test, addressing just one party’s source of funding—a view shared across your Lordships’ House. As we have heard, the House then set up a Select Committee to examine the union party funding in the context of Kelly’s view that a cross-party approach was needed. As we have heard, the Government were urged to take a wider and consensual route. Well, they did not, and the trade union aspect was the only one looked at, which has now been legislated for.
There will be an opt-in to the political levy for new members, even though these are a mere 10p per week. The Certification Officer is now consulting on how to implement this, after which there will be a year to put the new arrangements in place. That means that we now have time to rectify the imbalance of regulating Labour but not Conservative funding, and to deal with the bigger issue of companies’ and individuals’ largesse. It is urgent.
The Government are determined to remove the 15-year time limit for overseas voters, handing a vote for life to an estimated 1 million expats, who have left and not paid any taxes to this country for decades. But even more seriously, as the Minister helpfully revealed in her letter to me of 24 October—her department having refused to answer my questions for the year before that—all these extra voters will also become “permissible donors”. As she writes:
“If a British citizen is able to vote in an election for a political party, we consider that they should be able to donate to that political party”.
I cannot think what political party she had in mind.
Therefore, unless we change the law, all these extra voters, long after they have left these shores, will be able to funnel unlimited—presumably untaxed, probably unearned—amounts into the coffers of a UK political party, in a country in which they do not live, giving to a party that makes laws which do not apply to them and which takes decisions which do not affect them. Clearly, therefore, although the noble Lord, Lord Leigh, says that the Conservatives are content with existing donors, they are not—they want to add these extra expats as well. As the Mirror Online says about this today:
“Tycoons who have not lived or paid tax in the UK for decades will be able to fund political parties under new rules drawn up by the Tories … That means more foreign-based financiers will be able to push policy by pumping cash into the Conservative Party—where a £50,000 donation buys dinner with Theresa May as part of the ‘Leader’s Group’”,
as we heard today from both the noble Lord, Lord Wallace, and the noble Lord, Lord Leigh.
What does this look like to the general public? According to the noble Lord, Lord Wallace, three-quarters of the public think that wealthy individuals influence government to benefit their own interests, and the noble Lord, Lord Bew, said that nine out of 10 people think that large donations are motivated by hopes of influence. We have to deal with this. We must keep it simple and clean. There must be an upper limit on the size of the donation any one person—or company, trade association or a body corporate—can give. That was once accepted by the Conservative Party. Its 2010 manifesto promised,
“an across-the-board cap on donations”,
to,
“mark the end of the big donor era”.
Notably, this was dropped from the 2015 manifesto. Perhaps the Minister can explain this regrettable omission when she comes to reply.
A cap on individual donations is urgently needed, and at a level which avoids any perception—let alone reality—of bought influence. As Kelly emphasised, only a low cap will be seen as taking,
“big money out of politics”.
He thought £10,000 was low, as the noble Lord, Lord Leigh of Hurley, clearly does. To me, £10,000 is high. It could amount to £50,000 over a parliament from one individual. That sounds like big money to me, and to voters, if not to the noble Lord, Lord Leigh. A lower cap would signify that we are changing. In addition, we should not be afraid to discuss adjustments to public funding. The free post will, over time, become less of a necessity, and could be better directed, as the noble Lord, Lord Tyler, says.
A healthy democracy requires properly run and accountable parties, able to undertake serious policy work as well as campaigns, able to train and develop its elected representatives, able to engage with the electorate, and with MPs able to serve their constituents. This is a price worth paying for a healthy, functioning democracy. If it needs more public funding, so be it. What it does not require is unlimited donations from rich individuals. This matter is urgent. I hope that the Minister will take back what she has heard to Downing Street, with the message: “Something must be done”.
Baroness Chisholm of Owlpen (Con)
My Lords, I must thank the noble Lord, Lord Wallace of Saltaire, for tabling this Question, and all noble Lords who have contributed.
The current regime for the regulation of political parties was established in the Political Parties, Elections and Referendums Act 2000. Since that time, there have been a number of proposals for further reform, most notably a review of party funding by Sir Hayden Phillips in 2007 and a report from the Committee on Standards in Public Life in 2011. Cross-party talks followed on both occasions but no agreement was reached on a package of reforms. The most recent talks in 2012 and 2013 covered many of the issues raised by noble Lords today. Despite a decade of talks, there is still no cross-party consensus on the broad issue of party funding at this time. This is ultimately a matter for the political parties; the Government cannot impose consensus from Whitehall.
Many noble Lords called for a further round of cross-party talks to be convened, thereby echoing the Select Committee on Trade Union Political Funds and Political Party Funding. But before such talks can start, there needs to be a sense that all parties agree on the basis for discussion. Without such an agreement such talks are likely to fail. As many noble Lords will be aware, the Committee on Standards in Public Life in 2011 produced a comprehensive report but was unable to get cross-party support for all its recommendations and conclusions. Both parties opposite objected to at least some of the conclusions in the report.
It is interesting—I want noble Lords to hear this, and the noble Lord, Lord Bew, mentioned it—that research published by the Committee on Standards in Public Life in August 2016 showed that there has been no “arms race” in party funding. In fact, taking into account inflation, the research shows a steep fall in central party spending of the three main established political parties in general elections since 1997. It also showed that there was very little difference in the spending of the two main parties in the 2015 general election, and neither party came close to its spending limit.
There are major stumbling blocks to progress. The Committee on Standards in Public Life’s suggestions from 2011 included taxpayer funding of political parties under a scheme which was estimated would cost around £20 million a year at 2010 prices. The problem is that this would represent a considerable increase in taxpayer funding of political parties. As my noble friends Lord Leigh and Lord Sherbourne, and the noble Lord, Lord Bew, mentioned—and the Government agree—there is no case for more taxpayer funding of politicians and no public appetite for state funding of political parties. This is a widely held view. Indeed, in 2011, the Government said that,
“the case cannot be made for greater state funding of political parties at a time when budgets are being squeezed and economic recovery remains the highest priority”.—[Official Report, Commons, 23/11/11; col. 25WS.]
Those are not my words, but the words of Nick Clegg when Deputy Prime Minister in a Written Ministerial Statement. Instead, we believe that savings are needed to help reduce the cost of politics. We are taking this forward, by reducing the size of the House of Commons, freezing ministerial pay and stopping the unanticipated hikes in the cost of Short money.
There are steps that we can take forward. Over the past decade, cross-party talks have focused on controversial and complex structural changes. This may be one of the reasons they have failed to reach a consensus. The Government are open to constructive debate on how we can move forward on this issue. A possible way would be to concentrate on smaller reforms, which may command broad support.
I repeat the offer made by my noble friend Lady Neville-Rolfe during the debate on the report of the Select Committee on Trade Union Political Funds and Political Party Funding. The Government would be willing to take forward work to find practical ways of encouraging smaller donations from a wider audience if there were a positive reaction to such a potential step from the main political parties. For example, technology has changed the way that people make small donations to charities. It may be possible to look into how such technology can be utilised by political parties, while ensuring that large donations remain transparent.
The Government would be willing to look at regulatory obstacles to small changes, while maintaining transparency around donations. If there were a positive reaction to such a step from the political parties, the Cabinet Office would be willing to take it forward for further consideration—for example, by publishing a discussion paper in the first instance.
I thank the noble Lord, Lord Bew, for his speech and for the important work that he has done on this matter over many years. I shall now turn to answering some of the questions that were raised during the debate.
The noble Lord, Lord Wallace of Saltaire, mentioned getting round donation rules by loaning money. Controls on loans were in place during the EU referendum, and it is for the Electoral Commission to enforce those rules.
The noble Lords, Lord Wallace and Lord Wrigglesworth, mentioned gift aid. I will pass all the issues raised in this debate to my ministerial colleagues in the Cabinet Office, including the point on gift aid in relation to donations to political parties and the question of tax relief, raised by the noble Lord, Lord Wrigglesworth.
The noble Lords, Lord Wallace of Saltaire and Lord Whitty, asked about the Government’s response to the Select Committee on the Trade Union Bill. I reassure them that the Government have taken account of the committee’s report. Indeed, many of the recommendations on union and political funds now form part of the Trade Union Act, as the noble Lord, Lord Whitty, explained. A formal government response is a matter for BEIS.
My noble friend Lord Leigh mentioned provisions being brought in for Cranborne money similar to those for Short money in the other place. This is a matter for the House of Lords to take forward. I echo my noble friend’s praise for the volunteers in all political parties. Along with, I am sure, everyone here, I have huge admiration for their dedicated work.
The noble Lord, Lord Oates, asked whether the 2012 report of the Committee on Standards in Public Life should be used as the basis for discussions. As the noble Lord, Lord Bew, explained, the committee’s recommendations in 2011 did not obtain cross-party consent. Indeed, dissenting opinions were expressed in the report and, for assorted reasons, the Labour Party and the Conservative Party disagreed with its conclusions. The report does not represent a basis on which to reform party-funding legislation.
The noble Lord, Lord Tyler, talked about revising the legislation on how political parties target, for example, their national spending in constituencies. The Government are currently considering the Electoral Commission’s recommendation on party spending in support of candidates. They are also considering the proposals from the Law Commission on consolidating electoral law, as well as the review by Eric Pickles on electoral fraud.
The noble Lord, Lord Wallace, and the noble Baroness, Lady Hayter, mentioned votes for life and the letter that appeared in the Mirror Online. I reiterate that donations from foreigners remain banned. This has nothing to do with donations; this is about enfranchising British expats, as pledged in the Government’s manifesto. It will ensure that people who have given something to our country are allowed to participate in our democracy, including war heroes such as Harry Shindler.
Increasingly, expats have strong links with the United Kingdom. They may have families here and indeed they may plan to return here in the future. Modern technology and cheaper air travel have transformed the ability of expats to keep in touch with their home country. So far as the Government are aware, there is no evidence as to the voting habits of overseas electors. There is no reason to believe that expats are more inclined to vote for one party or another. In fact, a lead campaigner on votes for expats, Harry Shindler, is a Labour Party member.
The noble Baroness, Lady Hayter, also mentioned a cap on donations, as did several other noble Lords. Although it was not included in the 2015 Conservative manifesto, the principle of capping donations was considered in the cross-party talks held in 2012-13.
I reiterate that I will pass all issues raised in this debate back to my ministerial colleagues in the Cabinet Office. Perhaps now there really is the momentum for cross-party talks. I will of course write to noble Lords if I have failed to answer any questions raised.