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Andrew Stephenson (Pendle) (Con)
The Parliamentary Under-Secretary of State for Transport (Andrew Jones)
The Government are committed to ensuring that courts have sufficient powers to deal with dangerous driving and will soon commence a consultation looking at driving offences and penalties. Rental companies can check Driver and Vehicle Licensing Agency driver records and should not be renting vehicles to unsafe drivers. The British Vehicle Rental and Leasing Association has a code of conduct it expects its members to comply with, and, if concerned, the public can contact the BVRLA or trading standards.
Andrew Stephenson
In my area, and across the UK, a large number of accidents and deaths have been caused by inexperienced drivers, who often hire high-performance cars for just a few days at a time. Later this month, the Lancashire Telegraph will launch a dangerous driving campaign looking at this and many other aspects of road safety. Will the Minister join me in supporting the campaign, which aims to shine a light on what is happening on our roads?
Andrew Jones
My hon. Friend makes an important point about road safety, which is a critical issue, because, despite our enviable national record, 1,730 people lost their lives on British roads last year. Media campaigns in this area can be very helpful, so I do, indeed, support the Lancashire Telegraph campaign in principle, and I look forward to hearing more when it starts.
Graham Jones (Hyndburn) (Lab)
I, too, am supporting that campaign, and we have seen numerous incidents across east Lancashire, but would the Government not accept that one thing that is not helping on motorways is the fact that local government cuts mean that motorway lights are being turned off?
Andrew Jones
There is no evidence that any of the changes taking place on our motorways are impacting on road safety; in fact, it is the other way round—our motorways are some of the safest roads on our network, and our network is among the safest in the world.
Jim Shannon (Strangford) (DUP)
Does the Minister agree that anyone with points on their licence indicating a number of offences should be excluded from the rental of cars with above a 2-litre engine? Would he consider co-operation with the police and insurance companies on this issue?
Andrew Jones
The hon. Gentleman makes a very interesting point. I do not think we can necessarily exclude people from a marketplace, but, of course, all the rental companies do have access to driver records, and I will take that idea forward.
Stewart Malcolm McDonald (Glasgow South) (SNP)
The Minister of State, Department for Transport (Mr John Hayes)
The Secretary of State has regular discussions with the Attorney General on a range of issues.
The Government take any matters regarding the safety and environmental performance of vehicles on UK roads extremely seriously.
Stewart Malcolm McDonald
We hear that quite often, but as consumers in this country look around the world—to New Zealand, Brazil, France, Germany and South Korea—they see action being taken against companies such as Volkswagen, while this Government let people down and drag their heels. Can I hear something firm about what the Government have been doing to take these companies to task?
Mr Hayes
The hon. Gentleman underestimates me. It is true that, in a hard world, I have a soft heart, but companies that care less for their workers or treat their customers without integrity will soon learn that, in my velvet glove, there is a steely fist I am not afraid to use. To that end, I have met Volkswagen twice. I am absolutely determined it should meet its legal obligations. It will meet in full the costs that we have endured as a Government. I can tell the House today that I have received a pledge from Volkswagen to pay £1.1 million, which taxpayers have had to spend as a result of its behaviour, and I expect to receive that cheque before Christmas.
Charlie Elphicke (Dover) (Con)
Drivers have been very concerned by pollution rulings on diesel cars. Would it not be wholly wrong for drivers of diesel cars to be punished for buying cars they were encouraged to buy by the Labour Government?
Mr Hayes
It would certainly be right to encourage people to behave in a way that met the Government’s objectives for emissions. To that end, my hon. Friend, who is a knowledgeable and assiduous Member of this House, will know that the Government have taken direct action to promote the use of electric vehicles and to encourage those who choose to purchase vehicles with lower emissions. He is right that we must act with moderation, but, equally, we must act with determination to ensure that our vehicles are as clean as they can be, for it is emissions that lead to particulate material, which we know—this is a matter not of speculation but of evidence—is injurious to our health and wellbeing.
Graham Stringer (Blackley and Broughton) (Lab)
This is a scandal of huge proportions. Thousands of people have died in this country because of the defeat devices that Volkswagen inserted. The fact is that the European Union’s legislative framework is weaker than the framework of capitalist United States. Does the Minister agree that the European Union does not deserve its reputation for protecting the environment?
Mr Hayes
I am tempted to say that I find it difficult to believe that anything that emanates from the European Union is virtuous, but I will not say that. What I will say is that the Volkswagen scandal is, as the hon. Gentleman says, unacceptable. It would be unacceptable whether we were members of the European Union or not. There are other aspects to this, however. There is the programme of technical fixes that Volkswagen is engaged in, which I pressed it to get on with. There is also the issue of its legal obligations, which I mentioned a moment ago. Let me also be clear that I have not ruled out a separate investigation into these affairs by this Government, and I have told Volkswagen that.
Mr Clive Betts (Sheffield South East) (Lab)
I am sure that the Minister is aware that modern diesel vehicles have either exhaust gas recirculation systems or diesel particulate filters fitted to stop the emission of harmful gases and particles. Is he aware of the increasing practice among the owners of diesel vehicles, including taxis and buses, of illegally removing these systems and causing these harmful gases to be emitted into the atmosphere? If he is aware of it, what is he doing about it, and if he is not will he investigate it and write to me about the action that he intends to take?
Mr Hayes
To write to the hon. Gentleman, who is a distinguished Member of this House whom I met briefly earlier this week, albeit not on these issues, would be inadequate. I will meet him to discuss this matter in some detail, because he clearly has expert understanding to bring to bear.
Mr Speaker
I am sure that the hon. Gentleman feels enormously privileged at the prospect of a meeting with the Minister of State, as of course would most sane people.
Michael Fabricant (Lichfield) (Con)
I wish he would meet me. Question 3, please, Mr Speaker.
Michael Fabricant (Lichfield) (Con)
The Parliamentary Under-Secretary of State for Transport (Paul Maynard)
All the funding under the current pot of money for Access for All has been allocated to stations. We intend to seek further funding for the next rail control period. We will seek nominations from the industry and start to announce the successful projects in 2018.
Michael Fabricant
Lichfield happens to be one of the smallest cities in the country, but Lichfield Trent Valley railway station is an important interchange between the west coast main line and the cross-city line that connects Lichfield with Birmingham and with Redditch. Yet two out of the three platforms are completely inaccessible to anybody who is disabled, or indeed anybody who has baggage with them and wants to get to one of those platforms. We were meant to get disabled access in October this year, so when is it going to happen?
Paul Maynard
I am glad that my hon. Friend shares my commitment to and passion for improving disabled accessibility. I understand that he has met Network Rail at the station to discuss its plans for the project. It intends to start work as soon as possible and it should take about a year to complete, so I hope it will been seen within a year. Network Rail should appreciate that Access for All projects are as important as any of its major prestige projects.
Chris Elmore (Ogmore) (Lab/Co-op)
On Saturday there was a tragic suicide at Pencoed station in my constituency. One of the issues is that it has a level crossing, which is the only way in which disabled people are able to go between the lines. It is far too accessible in terms of the station lines, and there is a very high suicide rate. Network Rail has allocated funding via the Department for Transport to improve the level crossing, but I would like to see it closed. Will the Minister meet me to discuss additional funding to try to close off the access at that station?
Paul Maynard
I am always happy to meet hon. Members. I know that level crossing safety is a particular concern across the country. Every level crossing has its own characteristics and difficulties, so I am more than happy to meet the hon. Gentleman to discuss this case.
Mark Field (Cities of London and Westminster) (Con)
There is obviously no cause for complacency in relation to disabled access, but it is worth putting it on record that in the past 15 years there has been a sea change on our railways; I certainly see that from a London and home counties perspective. While I hope that we can continue this progress on disabled access, substantial improvements have been made in recent years.
Paul Maynard
I thank my right hon. Friend for his comments. He is right to indicate the progress that has been made. However, we cannot accept a situation where some of our busiest stations remain inaccessible, so work will have to continue into the next rail period and beyond. I intend to keep up the pressure on Network Rail and train operating companies, as I am sure Members across the House will, too.
Andy McDonald (Middlesbrough) (Lab)
Despite the fact that so many disabled people rely on public transport, the Government have slashed the Access for All programme, which pays for improvements to access at stations, by 40%. Some 19% of stations currently have step-free access via lifts and ramps to all their platforms. Given that record, we can hardly describe ourselves as an inclusive society when so many stations are inaccessible to disabled people. What representations will the Minister make to the Chancellor ahead of the autumn statement to address that appalling state of affairs?
Paul Maynard
I am glad that the hon. Gentleman also shares my commitment to the issue. We have made important progress in delivering improved accessibility at many of our busiest stations, but there is still more to do. I will not pre-empt the autumn statement, however much he might like me to do so, but I will seek more money for Access for All in control period 6 of our rail investment. That will deliver far more accessibility at far more stations.
Scott Mann (North Cornwall) (Con)
The Secretary of State for Transport (Chris Grayling)
We need to continue to improve transport and rail links in the south-west, and my No. 1 priority is to deal with resilience near the Dawlish sea wall and the Dawlish cliffs. The next stage of the project requires a further £10 million to continue to develop the programme and deal with the issue once and for all, and I can announce to the House today that that funding will be granted and the work will go ahead. That is an important part of ensuring that we protect the essential rail links to the south-west, and I hope that people there will see it as a commitment to making sure that they have a proper transport system for the future.
Scott Mann (North Cornwall) (Con)
That is fantastic news and it shows that this Government really are investing in the south-west. Given that resilience work, will they consider a potential branch line to Okehampton as part of the wider south-west rail package?
Chris Grayling
I pay tribute to my hon. Friend and, indeed, to all my south-west colleagues, who are vociferous champions of the need to make sure that we have the best possible transport links to the constituencies that they represent. I will be very happy to discuss with him the needs of his constituents in Cornwall and, in particular, the potential for improving links to Okehampton.
Kerry McCarthy (Bristol East) (Lab)
The National Audit Office’s verdict on the Great Western Railway electrification fiasco was absolutely damning. It described it as
“a case study in how not to manage a major programme.”
It is estimated that passenger growth on the line will be 81% over the five-year period leading up to 2018-19. Anyone who uses the line will know how overcrowded it is. What reassurances can the Secretary of State give that there will be an improvement in our area?
Chris Grayling
The hon. Lady will not be surprised to learn that I am not happy about the way in which the modernisation and electrification programme has been managed. The NAO report also said that, since 2015, my Department has had a much firmer grip on the programme. I am still not satisfied with the progress that is being made. New trains will, of course, be rolled out across the network sooner rather than later. I am committed to making sure that the project is delivered and that the improvements it brings will happen for passengers.
Kevin Foster (Torbay) (Con)
I welcome the Secretary of State’s announcement on the Dawlish line, given how vital it is in ensuring that my constituency actually has a train service. Does he agree that it was not acceptable for CrossCountry trains to bury in a lengthy timetable consultation document a proposal to axe virtually all of its direct services between the bay and the midlands and Manchester?
Chris Grayling
We have discussed the issue with my hon. Friend. When timetable changes are proposed, it is important that they are as transparent as possible, and I want the cross-country service to grow rather than shrink in future.
Nick Smith (Blaenau Gwent) (Lab)
Chris Grayling
My objective is to make sure that the programmes under way are delivered properly, with the benefits delivered as quickly as possible. As I said, I am not happy with what has happened so far. One great irony is that during the Labour party’s 13 years in power only 10 miles of railway line were electrified. The other is that at a time when Labour is demanding the nationalisation of the railways, these problems have arisen in the one bit of the railway in the public sector.
Conor McGinn (St Helens North) (Lab)
The Parliamentary Under-Secretary of State for Transport (Andrew Jones)
Improving northern transport infrastructure is vital to the success of the northern powerhouse. The Government are committing £13 billion in transport improvements over this Parliament, and we have created Transport for the North, a partnership of key organisations to drive forward a northern transport strategy. Our announcement this week on HS2 phase 2b is further confirmation of our commitment.
Conor McGinn
We are told that HS2 will cut journey times from the north to London and therefore benefit places such as St Helens, but surely the real driver of economic growth and regeneration in the north is good transport infrastructure across the region from west to east. When will we see a commitment to, and action from the Government on, connecting our great northern cities and towns to each other, not just to London?
Andrew Jones
The action the hon. Gentleman is calling for is already under way, with the electrification of the trans-Pennine rail links, the road investments that are taking place and HS3, which we have called “northern powerhouse rail”. That project is being developed by TfN and we will be seeing its proposals early next year.
Martin Vickers (Cleethorpes) (Con)
Notwithstanding what the Minister has just said, when I attended the UK Major Ports Group reception on Monday evening, the port director for the Humber stressed to me how urgently needed east-west connections from Immingham and the Humber ports to Liverpool and Manchester were. He talked about trans-Pennine tunnels and so on, which are decades off, so can the Minister reassure him that action will be taken immediately?
Andrew Jones
I can provide my hon. Friend with much reassurance. I entirely agree on the importance of connecting businesses to our key modes of transport, especially our ports. Developing the connectivity of our ports is a project being taken forward by the Minister of State, Department for Transport, my right hon. Friend the Member for South Holland and The Deepings (Mr Hayes).
Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)
Liverpool2 has recently opened, with a new deepwater port, which raises the possibility of the whole of the north becoming an economic powerhouse. What can the Minister tell us about plans to improve freight access to ports right across the north, in an integrated approach with road and rail?
Andrew Jones
The Liverpool2 development is a very exciting one, opening up the port of Liverpool to 95% of world shipping. Access to the port is, of course, part of the project being taken forward by my right hon. Friend the Minister of State.
Nigel Mills (Amber Valley) (Con)
Does the Minister agree it is vital for infrastructure in the north that we electrify the midland main line through the midlands and on to Sheffield on the existing timetable?
Andrew Jones
The next stage to Corby is just about to start, but my hon. Friend’s point will have been heard by the rail Minister and I will pick that up with him afterwards.
Nic Dakin (Scunthorpe) (Lab)
Andrew Jones
Ninety-five per cent. of the steel used on our railways already comes from Scunthorpe, and that is a key part of all of our procurement. We want to see British steel used in our transport infrastructure, and Scunthorpe will of course play a key part in that.
Mr David Nuttall (Bury North) (Con)
By the time HS2 eventually opens from Manchester Piccadilly, it will take some of my constituents, who live within Greater Manchester, longer to drive to Manchester, especially at peak times, than to travel by train from Manchester to London. What plans do the Government have to improve that?
Andrew Jones
It is not as though HS2 is the only investment taking place in the north: more than £1.25 billion is being spent in the north-west on local transport schemes through the growth deal; £800 million-plus is being spent on north-west road schemes; and a further £1 billion is being spent on other parts of the rail network. It is HS2 plus all the other investments that makes the comprehensive transformation of transport in the north.
Lucy Powell (Manchester Central) (Lab/Co-op)
Does the Minister agree with a group of leading north-west businesses that the gap between investment in north-west transport infrastructure and investment in London transport infrastructure is unacceptably high? Does he agree that if we were to close that gap, we could really transform the commuter services, trams and buses, and we could get the Oyster card of the north, which we so desperately need to transform our transport?
Andrew Jones
Transport investments around the country are not necessarily happening at the same pace, but I suggest to the hon. Lady that £340 million is being spent on rail in the Liverpool city region right now, and nobody could really doubt our commitment to the north after this week’s announcements on HS2.
Andy McDonald (Middlesbrough) (Lab)
I do not want to prick the bubble of self-congratulation, but new analysis published yesterday by the TUC reveals that the UK ranks towards the bottom of the table of OECD countries for capital investment in important areas of economic development, and worst of all is transport. As a percentage of 2014 GDP—these are the latest figures—UK investment was the lowest ranking, in last place out of 34 countries. With pauses and unpauses, and shunting programmes off into the distant future—be it HS3, northern powerhouse rail, or whatever we want to call it—is it not time that the Government started delivering instead of continually breaking their promises?
Andrew Jones
I remind the hon. Gentleman how we collapsed in OECD league tables under the last Labour Government, and that we are spending £13 billion on transport investment in the north during this Parliament, as I outlined earlier.
Amanda Milling (Cannock Chase) (Con)
The Parliamentary Under-Secretary of State for Transport (Paul Maynard)
As my hon. Friend will be aware, we recently announced an improved compensation scheme for passengers that will apply if their train is more than 15 minutes late. All franchise competitions let by the Department will include that policy, and we will be exploring how to roll it out for all our existing franchises during this Parliament.
Amanda Milling
I thank the Minister for his response. On the Chase line, passengers face not only delays, but cancellations and part cancellations. Services often do not reach the two Rugeley stations, leaving passengers stranded and resulting in overcrowding on subsequent services. Will my hon. Friend outline how the compensation scheme will benefit those who are affected by part cancellations?
Paul Maynard
This is the third time that my hon. Friend has brought me to the Dispatch Box to discuss the Chase line, so no one can say that she is not assiduous on the matter. As she may well be aware, if a passenger’s journey is delayed by 30 minutes, for whatever reason—be it cancellation, part cancellation or a train turning around short of its destination—they are entitled to claim delay repay compensation. Under the new invitation to tender for the west midlands franchise, we are looking at how we scope the “delay repay 15” scheme, which will be brought in under that franchise.
Clive Efford (Eltham) (Lab)
My constituency is not served directly by the London underground or the docklands light railway, much as we would like it to be, which means that we are heavily reliant on rail services. I receive a stream of complaints almost daily about delays on Southeastern railway. This cannot be allowed to continue, because people are heavily reliant on that service. One thing I would say for Southeastern is that it needs extra capacity—it needs extra carriages. The carriages that become available when the Thameslink programme is complete must be made available for Southeastern so that we can deal with the capacity problem, but we must also deal with Southeastern’s performance.
Mr Speaker
I think that the question was rhetorical in nature, but if the Minister wants briefly to reply, he may.
Paul Maynard
I am grateful to the hon. Gentleman for his question and look forward to seeing him at our meeting on Southeastern for all affected MPs later this month. He will know the impact that the London Bridge works have had and the extra capacity that they will unlock. We are having a meeting later today with Southeastern to discuss performance issues further, to make sure that we are on top of ensuring that this is an adequate service, delivering for passengers.
Sir Simon Burns (Chelmsford) (Con)
However welcome the Minister’s response is, given the regularity of interruptions to services—they are primarily the fault of Network Rail—for my constituents travelling to Liverpool Street, the end of the Parliament is too long to wait for this improvement in the compensation scheme. May I urge the Minister to ensure that it is brought in for all rail users across the country as soon as possible, rather than by 2020?
Paul Maynard
I share my right hon. Friend’s enthusiasm for bringing in the scheme as soon as we possibly can. As he will understand, an in-franchise change involves a more complex commercial negotiation, but that does not mean that we do not wish to do this as soon as we can.
Simon Danczuk (Rochdale) (Ind)
Although Northern Rail is very reluctant to pay out compensation to rail passengers, it is over-enthusiastic about prosecuting people who have not been able to buy a ticket through no fault of their own. Will the Minister put pressure on Northern Rail to reconsider its approach?
Paul Maynard
I am sure that the hon. Gentleman recognises the importance of engaging in adequate revenue protection on the railways, but I accept that when people have inadvertently, for whatever reason, not been able to purchase a ticket, there is a sense of unfairness. I will make sure that I write to Northern Rail and get a reply for him.
Maria Caulfield (Lewes) (Con)
The Secretary of State for Transport (Chris Grayling)
My hon. Friend will be aware that we are making a range of substantial investments on the rail network in Sussex, including in longer platforms on the Uckfield line, a new Thameslink depot and upgraded power systems. That said, I want to be clear that I am well aware of the frustrations felt by passengers in her constituency. Quite apart from the disgraceful and unwarranted industrial action that is taking place at the moment, one of the key issues is that this network is not reliable enough. I give her and her constituents an assurance that I am looking very hard at how to step up a programme of incremental improvements to stop the day-by-day breakdowns that are making the current issues much worse.
Maria Caulfield
I welcome the investment in infrastructure, which is causing 50% of the delays. Does the Secretary of State not agree that, in the long term, a second rail main line between Sussex and London is needed to increase rail capacity in the south-east and to improve journey times for my constituents?
Chris Grayling
I am well aware of the degree of campaigning behind the Brighton main line 2 concept. My hon. Friend the rail Minister and I have discussed that, and I am aware that a report has sat on the desk for much too long. I intend to make sure that it does not sit on the desk for very much longer.
Pat Glass (North West Durham) (Lab)
The Secretary of State will no doubt have seen the “Panorama” programme that was broadcast on 7 November that highlighted the daily hell faced by passengers, especially those using Southern rail on the line mentioned by the hon. Member for Lewes (Maria Caulfield). Is he content that Southern rail customers are facing this commuting hell every day, or will he act to do something about it?
Chris Grayling
No, I am not at all content. Of course, the biggest step that could be taken would be for the rail unions to call off their action so that we can deal with some of the underlying infrastructure problems, which I described a moment ago. One of the things I find sad is that, far from joining us in calling for the strikes to end so that we can improve the situation, Labour Members seem keener to line up with the militants rather than opposing them.
Pat Glass
Southern rail was a disgrace before the current industrial action, and it will continue to be a disgrace long after the current industrial action is complete and the dispute is settled. The Department for Transport sets the routes, allocates the franchises, dictates the number of trains that run and sets fare increases, so when will the Secretary of State stop pretending that this is nothing to do with him, stop blaming everybody else around him and act to stop the daily hell on this line?
Chris Grayling
I have every intention of addressing the issue and I am working as hard as I can to do so. I would tell Labour Members that figures published this morning show that, across our railways, far more—more than twice as many—problems arise as a result of infrastructure, which is in the public sector, than as a result of train operations, which are in the private sector. Their persistent arguments that nationalising would solve the problems are just plain wrong. We need to invest; interestingly, we, unlike the Labour party, are doing so.
Crispin Blunt (Reigate) (Con)
The utility of any rail infrastructure investment on the Brighton main line in Sussex will depend on the trains running effectively through Surrey. Will the Secretary of State undertake to look at proposals from people in my constituency about extra infrastructure investment in Surrey, alongside the Sussex proposals?
Chris Grayling
This is a Surrey, Sussex and south London problem, and we must look at the whole thing holistically. My hon. Friend will be aware that I have asked Chris Gibb, a senior rail executive, to look at the issues and to identify ways of addressing resilience problems. He has now put in place detailed plans, and some of that work has already started. For example, a joint team to control the railway on a day-by-day basis was put in place three weeks ago—at Three Bridges, one person will be in charge on a day-by-day basis—and individual infrastructure issues are now beginning to be addressed. I am determined that we do as much as we can, as fast as we can, to improve the resilience of the network.
Philip Davies (Shipley) (Con)
The Parliamentary Under-Secretary of State for Transport (Andrew Jones)
Northern powerhouse rail, which is sometimes called HS3, is the Government’s vision for dramatically faster and more frequent rail journeys across the north, to help to build the northern powerhouse and strengthen the British economy. With Transport for the North, we are investigating the benefits, both to passengers and to the economy, of northern powerhouse rail serving key markets such as Bradford.
Philip Davies
It is absolutely essential that a city the size of Bradford has a station stop on the HS3 route, otherwise the economic benefits in West Yorkshire will be only for Leeds, which will be like throwing apples into an orchard that is already full. Will the Minister therefore commit to making sure that Bradford is on the route so that the Bradford district can also benefit from the northern powerhouse?
Andrew Jones
We are expecting Transport for the North to publish its priorities for northern powerhouse rail development early next year. I will make sure that the voice of my hon. Friend is heard in that planning, and I will keep him informed of progress.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Will the Minister give a good talking to to the infrastructure tsar—who waxed lyrical on the radio this week about how important it was to link Oxford and Cambridge—about concentrating on the links across Yorkshire and Lancashire? That is the emphasis we want. We do not want Huddersfield left off the map on any occasion.
Andrew Jones
It is impossible to think that Huddersfield would be left off the map on any occasion. Obviously, we are investing in transport in all parts of our country, including connectivity in the north, and between Oxford and Cambridge.
Holly Lynch (Halifax) (Lab)
The Parliamentary Under-Secretary of State for Transport (Paul Maynard)
I am very aware that that is a busy line, which is why we are seeking to ensure that the new northern franchise tackles overcrowding with investment in new rolling stock that will increase capacity by 37% on peak services into our northern cities. There will be the improvements on the line that the hon. Lady seeks.
Holly Lynch
I am grateful to the Minister for that response but, further to the comments made by other hon. Members from the region, HADRAG—the Halifax District Rail Action Group—tells me that two morning trains from Halifax to Leeds have been cut from four carriages to two, leading to quite serious overcrowding. Services connecting our major northern towns and cities are essential to delivering the northern powerhouse, so will the Minister tell me what he is doing to avoid the crush that we are seeing on those commuter services?
Paul Maynard
I recognise that we have a number of issues with trains arriving in Manchester and Leeds with passengers standing because of issues with capacity. That needs to change, which is why in the new northern franchise we have ensured that the pacers will be removed, and we are investing in new carriages that will mean more seats for passengers. We are also investing specifically in the Caldervale line. We have just completed work on the west section, and we will start on the east section in the new year. I hope that the hon. Lady will start to see improvements on that particular network soon, not least because that will help to improve connectivity to Bradford as well, which will bring joy, I am sure, to my hon. Friend the Member for Shipley (Philip Davies).
Greg Mulholland (Leeds North West) (LD)
The Parliamentary Under-Secretary of State for Transport (Paul Maynard)
I have had no such discussions with Leeds City Council.
Greg Mulholland
That is a worrying answer. The Government made an excellent decision when agreeing with the inspector that the new generation trolleybus scheme was not right, while allowing Leeds to keep £173.5 million to be match funded with £81 million from local authorities. The Department said that that money was clearly for the right system and that NGT was the wrong one, so does the Minister share my dismay that authorities have failed to consider any other system, and specifically failed to consider light rail?
Paul Maynard
We should congratulate my hon. Friend the Member for Pudsey (Stuart Andrew) on his work to ensure that that money was retained in Leeds, but it is now a matter for Leeds City Council to decide the appropriate scheme for Leeds. It is not my role as rail Minister to dictate to Leeds what scheme should be selected.
Stuart Andrew (Pudsey) (Con)
A survey by Rawdon Parish Council showed that Leeds’s solution of getting passengers to the airport through the road system would not cope with the number of passengers and where they would be coming from. Surely using money for the road and the £173 million for a rail link to the airport would give us an opportunity to address that problem, and would also be the first stage of the properly integrated transport system that the city deserves.
Paul Maynard
My hon. Friend’s question demonstrates the range of ideas in the wider Leeds region about how the money can be spent. I understand that the combined authority is also looking at matters. I am more than happy to meet him to discuss such ideas further, but it has to be Leeds City Council that decides what the best option is for Leeds.
Mary Creagh (Wakefield) (Lab)
Thousands of people in Leeds, and my constituents in Wakefield, use buses to travel to work, school and college every day. In the absence of a new light rail system for Leeds, will the Minister look at the Bus Services Bill, which is about to be introduced in this place, and giving powers to integrate and regulate bus services not just to the metro mayors of Manchester and Liverpool, but to the cities of Leeds and Wakefield? That would have the advantage of not costing the Government one penny piece.
Paul Maynard
I recognise the importance of bus services, particularly in many of the great northern communities—they are vital to Blackpool, too. We will have ample chance to discuss the Bus Services Bill in this place, and I am sure the hon. Lady will make her voice heard.
Mr Speaker
Order. Wolverhampton has much to commend it, but it is a long way from Leeds.
Mr Speaker
This is about light rail schemes for the city of Leeds, which is a very considerable distance from the constituency so ably and eloquently represented by the hon. Gentleman.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
The Minister of State, Department for Transport (Mr John Hayes)
The right hon. Gentleman will know I am a proud trade unionist. This is an area of great concern to me. I have met my friends in the National Union of Rail, Maritime and Transport Workers, and Nautilus International—I have Nautilus’ charter with me. My officials have been working closely with officials in the Department for Business, Energy and Industrial Strategy and HMRC, as well as stakeholders, on the application of the national minimum wage to seafarers in UK waters more generally.
Mr Carmichael
I am grateful to hear that the Minister is taking this matter seriously. It surely cannot be right for HMRC to deem that a ferry service that starts in Aberdeen and finishes in Lerwick is operating wholly outside UK territorial waters. It is nonsense for the body that is supposed to enforce the minimum wage to be undermining it in this way. Will the Government do something to stop this?
Mr Hayes
I worked with the right hon. Gentleman in government and he knows of me what I know of him, which is that he does his homework. I have the statutory instrument and the original legislation in my hand as I speak. Let me tell him this: I am committed to reviewing the legislation to ensure that it applies to the offshore sector.
Ian Paisley (North Antrim) (DUP)
The Secretary of State for Transport (Chris Grayling)
Heathrow airport expects to add six more domestic routes across the UK when the new runway opens in the middle of the next decade. This will strengthen existing domestic links to regions such as Northern Ireland, Scotland and the north of England, and allow the development of new connections to regions such as the south-west. We expect Heathrow to meet these pledges. We will ensure that the Government hold the airport to account; that is an obligation, not a desirable.
Ian Paisley
I thank the Secretary of State for that excellent answer, and for the hope and expectation contained therein. Is he, like me, taken aback by the EU’s decision to block a multimillion pound aid package to United Airlines, which has effectively removed one of our air carriers out of Northern Ireland? Will he investigate who lodged the complaint to the EU that has effectively destroyed this business in Northern Ireland?
Chris Grayling
I fear it probably will not tell us, but I agree with the hon. Gentleman that the decision was deeply unwelcome. My Department spent a fair amount of time working alongside the Northern Ireland Office and the Northern Ireland Executive on trying to make sure that we sustained this route for Northern Ireland. The loss of the route because of EU action is deeply unwelcome and precisely the kind of unnecessary decision from Brussels that led this country to vote to leave the European Union.
Nigel Huddleston (Mid Worcestershire) (Con)
Could air connectivity between Northern Ireland, Heathrow and other parts of England be improved by changes to air passenger duty, especially in response to the impending cut to APD in Scotland?
Chris Grayling
My right hon. Friend the Chancellor of the Exchequer is listening carefully to representations on this issue. The Scottish National party stood on a platform of getting rid of air passenger duty in Scotland, but it is now discovering that it is more difficult to make ends meet than perhaps it had previously realised. That is one of the challenges of actually having to take decisions, rather than just talking.
Ms Margaret Ritchie (South Down) (SDLP)
What further discussions have taken place with the Treasury and the Northern Ireland Executive on lowering air passenger duty to underpin our local economy?
Chris Grayling
The Treasury has held detailed discussions about this, and lots of Members representing different parts of the United Kingdom have made representations, but I fear that it is a matter for the Treasury to indicate whether it plans to do anything in response.
Danny Kinahan (South Antrim) (UUP)
Lord Empey’s Bill in the other House would have guaranteed slots to Northern Ireland. As the Secretary of State knows, air connectivity is very important to us, but the Bill fell because of EU regulation. Can we ensure that it is put back after Brexit?
Chris Grayling
We have to be quite careful about the mechanism. I am not personally of the view that the solution is just about slots. There are slots at inconvenient times of the day. We want connectivity at times that maximise benefits to the regions of the UK, so that Northern Ireland, Scotland, the south-west and the north of England have proper, good, effective international links. My commitment to the hon. Gentleman and to the House is that we will ensure proper protection for that connectivity, but the actual mechanism needs to await more detailed work.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
Just to correct the Secretary of State: it is Ruth Davidson and the Tories who are trying to stop the APD cut in Scotland.
Additional regional capacity is of use only if there are airlines willing to fill it. The lack of a Brexit plan has seen businesses literally in flight from the UK. For instance, easyJet has confirmed that it is in the process of setting up a separate airline based on the European mainland. It said:
“We are not saying there will be no agreement. We just don’t know the shape or form. We don’t have the luxury of waiting”—
and neither do we or those counting on these services. What is your plan?
Mr Speaker
I do not have any plan on this matter. The hon. Gentleman is a well-meaning fellow, but the question was too long.
Chris Grayling
Let me tell the hon. Gentleman who does have a plan. Bombardier has a plan: it is now investing in a major international rail hub in the UK based on the excellent work in Derby. Nissan has a plan: it is expanding its plants in the north-east. Honda has a plan: it is investing more money in Swindon. Google, Facebook and Apple have plans: they are opening new headquarters in London. In an economy that continues to grow well post-Brexit, that proves that this country will do well regardless.
Mr Speaker
Hoping for laser-like precision and succinctness, I call Mr Drew Hendry.
Drew Hendry
Instead of deflecting, will the Secretary of State at least agree to a meaningful update of route development and assistance for supporting additional services on existing routes, as well as new services, and—crucially—will he bring forward, before March 2017, firm proposals for specific airport-to-airport public service obligations?
Chris Grayling
The Government have not shied away from public service obligations when necessary—most recently, between Londonderry and Stansted airport. There are routes in and around the UK that are essential to the maintenance of our regional economies, and we have always been committed, and will remain committed, to ensuring that those obligations are met when necessary.
Jeremy Lefroy (Stafford) (Con)
The Minister of State, Department for Transport (Mr John Hayes)
The UK now has 11,000 publicly accessible charge points, with Europe’s largest network of rapid charge points and provision at 96% of motorway service areas. We will continue to support the roll-out of electric vehicle charging infrastructure to ensure that we realise our ambition that almost every car and van on UK roads is a zero-emission vehicle by 2050.
Jeremy Lefroy
I welcome the Minister’s reply. I also declare an interest: I am in the process of buying a Nissan Leaf to show my support for Nissan’s welcome investment in electric vehicles and indeed in other vehicles. Will the Minister explain how he is looking to support small businesses investing in electric vehicles for their staff and their businesses?
Mr Hayes
I am delighted that my hon. Friend is taking that step. I had the joy of driving a Nissan Leaf for the first time last week, and I know that he is as committed to this cause as I am, but he asked a very particular question. Disraeli said that justice is truth in action. Now, I am going to offer him some justice for those who want to get this right. I am pleased to inform the House that the £7.5 million grant scheme for charge points at workplaces will be rolled out—applications will begin—this Monday.
John Pugh (Southport) (LD)
Sorry to break the consensus, but is there not a danger of the Government putting too much emphasis on electric vehicles and not enough on liquefied petroleum gas and hydrogen cells, which do not require the same level of infrastructure?
Mr Hayes
The hon. Gentleman is right that technology is changing in all kinds of ways, and there will be all kinds of results from that in respect of the zero emission ambition that I set out. The electric vehicle developments that I described, and to which the hon. Gentleman referred, are important. The Government’s role is to make sure that we do what we can to make them as attractive to consumers as possible. Charge points are at the heart of that.
Roger Mullin (Kirkcaldy and Cowdenbeath) (SNP)
The Minister of State, Department for Transport (Mr John Hayes)
The Prime Minister has made it clear that we will convert existing EU regulations into UK law when we leave the European Union. Once the great repeal Bill is given Royal Assent, Parliament will be free—subject to international agreements and treaties with other countries and the EU on matters such as trade—to amend, repeal and improve any law it chooses.
Roger Mullin
The collapse of low-cost holidays this summer emphasises the importance of the EU package travel directive, which offers consumers protection in the case of insolvency. Can the Minister give me a guarantee that any rights to which UK passengers are currently entitled will not be eroded by Brexit?
Mr Hayes
The hon. Gentleman must understand that this Government remain entirely committed to putting passengers at the heart of our transport policy and ensuring that we have the right regime for passenger rights. In the end, it comes down to this simple fact. As Ruskin said, quality is never a matter of accident, but the result of intelligent effort. I believe in the determination of this House to do right by passengers. If the hon. Gentleman does not believe that, I suggest that he comes into the new light of the dawn of our leaving the EU rather than staying in the murky darkness of Scottish nationalism.
Jim Fitzpatrick (Poplar and Limehouse) (Lab)
The Secretary of State for Transport (Chris Grayling)
In the wake of last week’s dreadful accident in Croydon, I would like to start this topical questions session by paying tribute to the British Transport police, for which I have ministerial responsibility, to all the emergency services and to the transport staff who worked so hard in the aftermath. I want to send all the good wishes of this House to those injured and our condolences to the families who tragically lost loved ones.
Jim Fitzpatrick
Recently published annual figures for those killed or seriously injured on our roads at the end of the second quarter of 2016 show a 3% increase on last year. For the third year running, deaths are higher than they were the year before and went up by 2% last year and this year. Thirty deaths may not sound that many out of 1,800, but for every grieving family, they are a tragedy. What is the Government’s plan to arrest and reverse this disturbing trend?
Chris Grayling
Of course every death on our roads is one death too many. It has to be said that our roads are among the safest in Europe and the world, but that is no reason for complacency. A trend in the wrong direction is an unwelcome one. The Under-Secretary of State for Transport, my hon. Friend the Member for Harrogate and Knaresborough (Andrew Jones), who is in his place alongside me, has responsibility for road safety. He is actively engaged, and will continue to be actively engaged, in looking at measures we could take that will improve things. We will look at different investment measures and different ways of educating motorists and those using the roads, and we will work with anyone who can come up with suggestions about how we can improve the situation.
Philip Davies (Shipley) (Con)
The Parliamentary Under-Secretary of State for Transport (Andrew Jones)
I am fully aware of the merits of the scheme, and I will make sure that officials from the Department, the West Yorkshire Combined Authority and Bradford Council sit down to sort this out. There is no reason why Government mechanisms for approval should hold back schemes in Bradford. We are seeing schemes progressing all over the country, so I shall make sure that Bradford knows what to do so that the people of Bradford can see the investment they need.
Daniel Zeichner (Cambridge) (Lab)
May I associate Opposition Members with the Secretary of State’s comments about the tragedy in Croydon?
The latest statistics from the Department for Transport show a marked decline in bus patronage across the whole country—a drop of some 3%, along with a drop of 2% in bus mileage. Given that we are trying to get passengers out of cars and on to buses, is this not a mark of Government failure? What is the Secretary of State planning to do about it?
Andrew Jones
We are, of course, maintaining our support for buses, which we see as the workhorses of our public transport system. They make more than 5 billion passenger journeys per year, compared with 1.7 billion on our railways. We are maintaining, for instance, the bus service operators grant and the £1 billion for the concessionary bus pass scheme, and the Bus Services Bill will be introduced next week.
Daniel Zeichner
I rather expected the Minister to refer to the Bus Services Bill. Given that franchising is the answer, why is he denying the choice to many swathes of the country? Why cannot parts of England which do not take on elected mayors—and which are represented largely by his own side—have powers to improve their services as well?
Andrew Jones
I think the hon. Gentleman is mistaken when he says that franchising is the answer. All the conversations that I have had with local authorities have produced a mixture of solutions, but most of have focused on partnerships: good partnerships between local authorities and bus companies which will meet local needs.
Mrs Cheryl Gillan (Chesham and Amersham) (Con)
Chris Grayling
I have looked at the report, and I recognise the importance of protecting our biodiversity. Our country is probably more covered in woodland today than it has been for many centuries in our history, and I find it encouraging that organisations such as the Woodland Trust are continuing to plant the forests and woods of the future. However, I am sceptical about a 1:30 ratio which appears to be based on nothing more than a gut instinct. I am not sure that that is an appropriate way of dealing with the issue. What is important, to my mind, is replacing lost woodland with extra planting, and following a “finger in the air” formula may not be the best way of doing so.
Robert Flello (Stoke-on-Trent South) (Lab)
The Minister of State, Department for Transport (Mr John Hayes)
The hon. Gentleman has already attended a round table discussion with me on just such matters, and I believe he will be attending another this afternoon. I am spending more time with him and the truckers than with almost anyone else. He can be assured that the case that he makes is dear to my heart, and that it will inform Government policy. He is right to say that we need to look after the smaller operators as well—he has taken a proud and informed stance on that—and I will ensure, through him and through other mechanisms, that they are involved in the discussions.
Chris Davies (Brecon and Radnorshire) (Con)
As my hon. Friend knows, rural Wales is the most beautiful part of any country in the world to drive through. I wonder what more he can do to press the Welsh Government to improve investment in roads in my area, so that our world-class countryside is accessible via a world-class road network.
Andrew Jones
I do indeed know how beautiful rural Wales is, and my hon. Friend is right to stress the importance of good connections to the tourism industry. I, too, wonder what I could do to press the Welsh Government. Perhaps we could simply highlight to the people of Wales the greater priority placed on investment in infrastructure by Conservative Governments.
Nic Dakin (Scunthorpe) (Lab)
Chris Grayling
Absolutely, but that does not apply only to the steel industry. I believe that HS2 is a great engineering project for the United Kingdom, and I was pleased to note a substantial British presence in the first set of contracts that we announced this week. I have made it very clear that the firms that hope to participate in this project should expect to leave a skills and expertise footprint behind in the United Kingdom, and that those that fail to do so should not expect to find themselves at the front of the queue when it comes to contracting.
Mr Philip Hollobone (Kettering) (Con)
On the midland main line, East Midlands Trains often gets it in the neck for train delays when often the responsibility is failures by Network Rail. Will the Secretary of State and the rail Minister design a rail compensation scheme that sends the correct signals to Network Rail to raise its game?
The Parliamentary Under-Secretary of State for Transport (Paul Maynard)
I recognise the situation my hon. Friend describes. We have a number of compensation schemes operating within the rail industry focusing on schedule 8 payments. I recognise the need to make sure that that remains a very clear system for passengers to understand why delay attribution occurs and recognise that there is much work to be done.
Ruth Cadbury (Brentford and Isleworth) (Lab)
Chris Grayling
There are two separate issues here. Improvements are needed to local roads in west London, and the M4 is one of those where plans are afoot now to deliver improvements way before we have a new runway in place. Heathrow airport will be expected to pay for the infrastructure improvements directly linked to the new runway. There are of course other improvements, such as M4 improvements, that are not directly linked and that have for some while been envisaged as part of the ongoing road improvement programme this Government are pursuing. My commitment is that where a transport improvement is required to make the third runway possible, that will be met by Heathrow airport.
Helen Whately (Faversham and Mid Kent) (Con)
I thank the Minister of State, my right hon. Friend the Member for South Holland and The Deepings (Mr Hayes), for his commitment to tackling illegal HGV fly-parking across roads in Kent and throughout the country. Does he agree that ending this blight requires not only more lorry parking spaces, but more effective enforcement?
Mr Hayes
My hon. Friend knows I have also held a round table on that issue—as I have said before, my table is ever more round and I always welcome hearing from hon. Members across this House. My hon. Friend has made this case forcefully; she has done so at Westminster Hall and again today. She is right that we need to look at these matters because they affect local residents in exactly the way she said. We want to get a balanced package for HGVs, but a package that takes account of the overtures my hon. Friend has made in the interests of her constituents.
Rob Marris (Wolverhampton South West) (Lab)
When the Minister has discussions with Leeds City Council about the light rail scheme, will he also discuss trolleybuses? I drove a trolleybus for three years; they are very efficient and are a lot cheaper in infrastructural costs, and it would be a lot cheaper for Leeds and elsewhere if we had trolleybuses rather than trams.
Paul Maynard
The hon. Gentleman does not need to localise it any more to Leeds or Wolverhampton. I am in constant discussion with UK Tram and am very keen to lower the cost of all options, whether it be light rail, tram, train or trolley bus, but it is for local councils to decide on the most appropriate scheme for their local area.
Mr Speaker
I never cease to be impressed by the varied life experience of the hon. Member for Wolverhampton South West (Rob Marris).
James Heappey (Wells) (Con)
Does the Secretary of State share my concern that the reduced growth deal 3 offer made to the Heart of the South West local enterprise partnership has threatened a number of important road and rail improvement schemes in Somerset? Does he also agree that driving growth through improvement to transport infrastructure should trump the devolution agenda?
Chris Grayling
First, it is important that the funding we allocate to different parts of the country delivers real improvement, whether to congestion and connectivity, economic development or housing. I met the Secretary of State for Communities and Local Government earlier this week to discuss the issue. No offers have yet been made on funding to LEPs; that will happen shortly.
Diana Johnson (Kingston upon Hull North) (Lab)
The electrification of the line to Hull was included in the Government’s northern transport plan published in March. The hon. Member for Brigg and Goole (Andrew Percy), now the Minister for the northern powerhouse, said:
“The problem if you are not included in the electrification is the risk that you then become just a shuttle service connecting into the main line.”
So can the Secretary of State explain to me why yesterday the decision was made not to include the electrification of the line to Hull, and to leave the TransPennine electrification finishing at Selby, 30 miles outside Hull?
Chris Grayling
The train companies got there first, and the good news for Hull is that both Hull Trains and TransPennine Express are going to be running on this route with new generation state-of-the-art hybrid trains that will run on both electric and diesel, and will connect Hull across the Pennines and connect Hull to London. That is good news for the passengers.
Several hon. Members rose—
Post Office Closure in Tonbridge
(7 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text
Tom Tugendhat (Tonbridge and Malling) (Con)
The post office in Tonbridge provides an accessible service to people across our community, and closing it would deprive residents of our growing and thriving town of the central services and support that this stand-alone Crown post office provides. That is why more than 1,000 people have signed a petition calling for the decision to be reversed.
The petition states:
The petitioners therefore urge the House of Commons to note their objections to the proposed closure by Post Office Ltd of the existing stand-alone post office on Tonbridge High Street and its proposed relocation within another existing local business.
Following is the full text of the petition:
[The petition of residents of the United Kingdom,
Declares that the proposed closure by Post Office Ltd of the existing stand-alone post office on Tonbridge High Street is unacceptable; and further that the post office should not be relocated within another existing local business.
The petitioners therefore urge the House of Commons to note their objections to the proposed closure by Post Office Ltd of the existing stand-alone post office on Tonbridge High Street and its proposed relocation within another existing local business.
And the petitioners remain, etc.]
[P001979]
Chagos Islands
(7 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Andrew Rosindell (Romford) (Con)
(Urgent Question): To ask the Minister of State for Foreign and Commonwealth Affairs to make a statement on the future of the British people of the Chagos Islands and the British Indian Ocean Territory.
The Minister for Europe and the Americas (Sir Alan Duncan)
The islands of the Chagos archipelago have been British territory since 1814, when they were ceded to Britain by France. In 1966, the UK agreed with the United States to make the British Indian Ocean Territory available for the defence purposes of the US and the UK, and the Chagossian people were removed from the islands. Like successive Governments before them, this Government have expressed their sincere regret about the manner in which Chagossians were removed from the British Indian Ocean Territory in the late 1960s and early 1970s. It is right that the UK Government paid substantial compensation to Chagossians—nearly £15.5 million in current prices—and the British courts and the European Court of Human Rights have confirmed that compensation has already been paid in full and final settlement.
We must now look forward, not back, on decisions about the future of the British Indian Ocean Territory. The Government have considered this complex issue very closely and carried out an independent feasibility study of the practicalities of resettlement and a public consultation, which sought better to gauge the demand for resettlement by illustrating the most realistic way in which resettlement would hypothetically take place. The Government have looked carefully at the practicalities of setting up a small remote community on low-lying islands and the challenges that such a community would face. We were particularly concerned about the difficulty of establishing modern public services, about the limited healthcare and education that it would be possible to provide—which would create difficulties for any new population and especially for elderly Chagossians returning to the islands—and about the lack of realistic economic opportunities.
The Government have now considered all the available information and decided against the resettlement of the Chagossian people on the grounds of feasibility, defence and security interests, and the cost to the British taxpayer. Although the Government have ruled out resettlement, we are determined to address the aspirations that drove Chagossians to seek to resettle—for instance, their desire for better lives and their wish to maintain a connection to the territory. To meet those aspirations, the Government are creating a significant and ambitious support programme to provide Chagossians with better life chances and developing an increased visits programme. The British Government intend to liaise with Chagossian communities in the UK and overseas and to work closely with the Governments involved to develop the kind of cost-effective programmes that will make the biggest improvement in the life chances of those Chagossians who need it most.
Andrew Rosindell
I thank the Minister for his reply, but does he not understand the shock, anger and dismay among members of the Chagossian community in the United Kingdom, in Mauritius and in the Seychelles who were displaced from their homeland in the 1960s at the Government’s decision not to allow resettlement? Does he not realise that they are British subjects who are entitled to the same rights, freedoms and self-determination that all British citizens should have? How can the Government defend the right of self-determination for the people of the Falkland Islands, Gibraltar and other British overseas territories, while completely denying the same rights to the people of the Chagos Islands?
Why have the Government ignored the arguments put forward over the years by the all-party parliamentary group on the Chagos Islands and by experts concerning viability, sustainability, cost, funding, defence and security, international human rights obligations and the views of the courts, which since 2000 have deplored the treatment of the Chagossians? Have the Government properly considered the Supreme Court conclusion that, in the light of the KPMG study, maintaining the ban on Chagossian return might no longer be legal?
Does the Minister accept that the United States was not opposed to resettlement and that any security concerns would be easily manageable, just as they are when indigenous people around the world who live around military installations are accommodated? Will he clarify whether the right of abode, which is different from resettlement, can be restored, giving Chagossians the right to visit their homeland whenever they wish? Does he not see that this decision continues to undermine the United Kingdom’s human rights record and the British sense of fair play? Why should Chagossians, who are British, be treated any differently from other nationals of overseas territories? How does this leave the Government’s so-called “unwavering commitment” to human rights?
British Chagossians should have the right of self-determination that is afforded to all Her Majesty’s subjects, who rightly expect the protection of the Crown, which is being denied to the Chagossians today.
Sir Alan Duncan
I fully accept my hon. Friend’s passion on this subject, which he has demonstrated for many years. He has become a champion of this issue. However, as he will appreciate, the Government and I do not agree with many of his points. First, we do not consider that the right of self-determination actually applies to the Chagossians. In fact, the issue here is one of sustainability and viability—[Interruption.] Well, let me go into that.
When I was an International Development Minister, looking at communities such as the Pitcairn Islands, one needed to appreciate that it is demographically difficult to sustain a population of that size in such a remote area: services cannot be provided; the travel distances are enormous; and the costs are quite significant. The costs here have been estimated to vary between £55 million for a mere 50 people and something like £256 million for 1,500. The obligation on Her Majesty’s Government to pay on an annual basis the costs of sustaining the population would be triggered. When no hospital is available and when care cannot be delivered urgently, it is unsustainable to expect a community of any such size to exist in such a setting.
Emily Thornberry (Islington South and Finsbury) (Lab)
Thank you for granting this urgent question, Mr Speaker. After four decades of intense debate on the disgraceful relocation of the Chagossians, after the campaign for their resettlement and after all the legal disputes, the marches and rallies, the parliamentary debates and the reviews and inquiries, it is disappointing that the Government thought they could deal with the issue with a 500-word written statement in the other place yesterday.
After KPMG provided a comprehensive analysis of the resettlement options, why have we not at least seen an equally detailed evaluation of those options from the Government, so that we can understand the rationale behind the decision? We are told that cost is one of the three factors, but that comes from a Government who have spent £285 million building an airport on St Helier—[Hon. Members: “St Helena.”] Whether it is called St Helier or St Helena, the fact is that we have spent £285 million on an airport where it is impossible to land planes. If cost is of such importance, let us put it in that context. If the Government are prepared to spend such amounts on an airport that does not work properly, why not evaluate this situation in those terms?
We are told that the agreement with the United States on the Diego Garcia military base is another factor, but that agreement is due to expire at the end of this year. Has the Minister even discussed with the incoming US Administration whether the renewal of the agreement could be made conditional on both parties facilitating the resettlement of the Chagossians?
Finally, we are told that feasibility is also a factor, but why has that not been tested by means of a pilot programme of relocation, as considered by KPMG? The treatment of the Chagos islanders is a dark stain on our country’s history. Yesterday’s decision, and the manner in which it was made, has done nothing to remove that stain. It is another disgraceful attempt to cover it up, but it will not be covered up. The Chagossians can be assured that the Opposition, led as we are by someone who has campaigned for them for 30 years, will never give up on their right to return.
Sir Alan Duncan
May I at least agree with one thing the hon. Lady said, which is that we all deplore the relocation that took place in the 1960s, and the manner in which it took place? That is why compensation has been paid to those who were displaced in that manner. May I also point out that the written statement yesterday was not in another place, but here in this House of Commons?
Sir Alan Duncan
The statement goes out in parallel to both Chambers. Perhaps the hon. Lady would like to learn something about how parliamentary procedure works. It went out at the same time.
The Government have been looking at this issue for more than four years, and the decision was made at Cabinet level by appropriate Ministers. During that process, there has been a full consultation. Perhaps I should point out that, of those invited to express a view, 832 people answered. When it was described what life on the islands would look like, only 25%—approximately 200 people—indicated that they would like to go to reside on the islands. As for Diego Garcia, the hon. Lady needs to appreciate that the Chagos Islands, or the British Indian Ocean Territory, comprise 58 islands—it is not just Diego Garcia. The agreement is likely to be renewed before the new President comes in and is expected to continue—indeed, it will continue—until 2036.
Henry Smith (Crawley) (Con)
It has been my privilege, since 2010, to represent one of the largest communities of the Chagos Islands anywhere in the world—it is certainly larger than that on the Chagos Islands. I have pursued this issue since before being elected to this place and it has been my honour to do so. I believe that the Chagos islanders have a right of return, and I am very disappointed with yesterday’s statement by the Foreign and Commonwealth Office. I note that a compensation package of £40 million over 10 years has been proposed. Can the Minister say a little bit more about how that will be spent in local communities such as mine in Crawley? And rather than just regretting the forced eviction of Chagos islanders from their homeland, will the British Government now apologise?
Sir Alan Duncan
Yes, I am very prepared to—and do—apologise. That is why compensation has been paid, and the matter has been recognised by the courts. My hon. Friend, who has a large Chagossian population in his Crawley constituency, has taken a keen and proper interest in this issue ever since he was elected. That must be respected, as must his views and opinions. He has touched on something that is very important, which is that, in looking forward, the Government intend to allocate £40 million, shared between the Department for International Development and the Foreign Office, to address the needs of Chagossians wherever they are—whether in Mauritius, the Seychelles or the United Kingdom. In respect of how that will be paid, some of it will qualify as official development assistance—the DFID element—and the rest will do lots of other things in conjunction with the communities and with the Governments in the countries in which they reside. I very much hope that this £40 million over 10 years will be well spent and particularly address the needs of those older Chagossians, who might have been displaced in the ’60s and ’70s, but who are still alive and who are perhaps the ones in greatest need.
Alex Salmond (Gordon) (SNP)
Has it occurred to the Minister that, in the era of President Trump, an island group in the middle of the Indian ocean, thousands of miles from anywhere, might be one of the safer and more desirable places on this planet? In the late 1960s, the community on the Chagos Islands was fully employed and perfectly sustainable. How can the Minister seriously argue now that it would not be so in modern times, particularly with the advantage of an airport with a very long runway? Finally, the Minister has said that the right of self-determination does not apply here. Why exactly is that? The shame of successive Administrations is not something to do just with the 1960s and 1970s. It covers the past 15 years, where successive Administrations have used every effort through the courts to block and tackle the rights of the Chagossians, including the use of the royal prerogative, disgracefully, against Her Majesty’s subjects. Instead of apologising for the past, will the Minister properly address the future and allocate to these people their right of self-determination and their right of return?
Sir Alan Duncan
The right hon. Gentleman’s reference to the runway refers to only a very small part of the archipelago, where there are 58 islands. There is no obvious manner in which a few people on low-lying islands will be able to sustain themselves economically without outside help.
As for what the right hon. Gentleman describes as the runway, and hence implicitly Diego Garcia, the nature of the employment there did not prove attractive to those Chagossians who were consulted, because in most cases they are people who cannot take their families and work in a solitary manner, and they did not find the likely package of employment attractive. The right hon. Gentleman may shake his head, but that is the response that came through in the consultation.
On self-determination, the legal advice that we have received is that the Chagossians were not and are not a “people” for the purposes of international law and hence self-determination.
Dr Matthew Offord (Hendon) (Con)
There are many issues that we could raise in connection with the statement, and many of us did raise them on 25 October, when there was a Westminster Hall debate on the issue. At that time, I asked the Minister what the timeframe was for announcing his decision about the islands, and we were told that it would be announced before the end of the year. Does he accept how regrettable it is for many of us to have read the contents of the written ministerial statement in The Guardian on Tuesday night and how concerned we were, whether the written ministerial statement was published in this House or the other place, that it was published two hours before a long-standing meeting of the all-party parliamentary group to discuss the matter? Many of us feel that that was an affront to many Members. Will he undertake an investigation to determine how the statement ended up in a national newspaper, rather than here on the Floor of the House?
Sir Alan Duncan
I understand what my hon. Friend is saying, although the Minister to whom he refers was not me. What I am doing today is repeating a statement that was made in another place. I hope and believe that the APPG was afforded proper respectful attention. I think that there were three Ministers there, properly explaining the policy. Quite how the matter got into The Guardian I do not know. All I can say is that that is not the natural paper for Her Majesty’s Government, and I therefore suspect that the sources probably lie elsewhere.
Chris Bryant (Rhondda) (Lab)
The Guardian contacted me on Tuesday and asked me whether the Minister was going to make an announcement. Nobody in this House or in this country thinks that Britain behaved well in the 1960s in relation to the Chagos Islands. How we behaved then is a disgrace. The question is how we proceed now. Many people have suggested, incorrectly, that the Chagos marine preserve zone, which was initiated in 2010, was deliberately put in place to prevent the Chagossians returning to the British Indian Ocean Territory. That is completely untrue. Will the Minister update us on where we are now with protecting the biodiversity there, which is vital not only in itself, but to the entire east coast of Africa?
Sir Alan Duncan
I acknowledge the keen attention that the hon. Gentleman gave to the matter when he was a Minister. He is right that the creation of a marine protection area or zone has no bearing on what we are discussing today, but in respect of his subsequent question, I am pleased to say that I was in Washington last month at the ocean summit and, because we have a number of these islands as part of our historic legacy, I was able to announce a 4 million sq km marine protected area around many of them, which puts the UK in the forefront of marine biodiversity and protection.
Sir Desmond Swayne (New Forest West) (Con)
Did any of the estimates for the cost of resettlement include the building of a prison such as we have had to build in Pitcairn?
Sir Alan Duncan
I am not aware that they did, but my right hon. Friend and successor as Minister in the Department for International Development puts his finger on an example of a small community on a remote island that has had serious difficulties—demographic, behavioural and economic difficulties. Under our legislation we are obliged to offer reasonable support to such a population, even though on the Pitcairn Islands there are only 46 people. Simply for child safeguarding, when I was a Minister I insisted that all teenagers go to New Zealand to be educated, rather than suffer improper behaviour on the island.
Kate Hoey (Vauxhall) (Lab)
I know the Minister quite well, and I detect a bit of embarrassment about his statement today, perhaps partly because of the way this whole thing has been handled, with a statement being rushed out yesterday, having been leaked to the papers. This is a very sad day for our country and it reflects so badly on our attitude to human rights across the world. Is there anything he would listen to that would make the Government change what I think is a deplorable decision?
Sir Alan Duncan
I am afraid I have to say directly to the hon. Lady that I diametrically disagree with her. I am not in any way embarrassed, although, of course, when it comes to leaks, I neither like nor approve of them. However, this is the final decision. I do not think it is deplorable. Certainly in my direct experience, and looking at the evidence—and, indeed, in response to a consultation where so few people actually said, given what they thought the conditions would be in living there, that they wanted to go—it is not deplorable or a breach of human rights to say that, in our judgment, this would be creating a community that would actually not be sustainable and that, probably, at the end of the day, would be neither safe nor happy.
James Duddridge (Rochford and Southend East) (Con)
This is a sensitive decision, but it is the right decision. Is the Minister of State aware that, when I was Minister for overseas territories, I actually travelled out to the Chagos Islands and also went out to the outer islands? I think I am the only person in the House today who has visited. It was certainly quite a difficult experience; over five days, I spent only 15 minutes on land in a bed. This is a massive area, and it is very difficult to get to. It would be wholly impossible to populate the islands, as other Members of the House have argued. Does the Minister agree that, while this is a sensitive issue, it is good to have what I hope will be closure on it going forward?
Sir Alan Duncan
I am very grateful to my hon. Friend, who has served, of course, as a Minister. As he says, he is probably the only one of us who has visited. I really think that what he has said is right: it is wise to realise that, despite the many arguments we have heard for repopulating the islands, that would not lead to an attractive existence for those who lived there, in what we foresee as the circumstances in which they would live. For instance, if someone has appendicitis and it takes them five days to get to a hospital, they are probably not going to get there alive. I hope the House will listen to my hon. Friend’s first-hand evidence and experience.
Patrick Grady (Glasgow North) (SNP)
What have the Government actually decided here? They say they will not facilitate resettlement, but do they accept or not that the Chagossians have a right of return or a right of abode? If I won the lottery and decided to spend my winnings on building a paradise retreat for myself on one of the Chagos Islands, would that kind of development be permitted?
Sir Alan Duncan
It would potentially be illegal. In my view, it is quite clear that our decision is that there should not be resettlement or repopulation on these islands.
Bob Stewart (Beckenham) (Con)
When we renegotiate this treaty with the Americans for the use of the Chagos Islands, could not part of the conditions of agreement be that Chagossians should be the people of choice for employment in the American airbase there? They would then be sustained by the American infrastructure and be looked after that way. That would be an honourable thing for us to do; what we decided to do yesterday is dishonourable.
Sir Alan Duncan
I do not agree with my hon.—and gallant—Friend. I do not think this is dishonourable. As I have already said, Diego Garcia is only one small part of this large archipelago. The nature of the employment there would not necessarily prove attractive, and it is not seen as practical to link subsistence payments for a repopulated series of islands to the use of the defence base, for which, at the moment, there is no payment anyway.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
May I assure the Minister that I understand better than most people in this House the challenges of providing public services in remote island communities? However, if the Chagos Islands are where people belong and that is where they want to be, they have an inalienable right to be there. What the Minister describes today as practicalities exist only because of what this country did some decades ago. Paying £40 million over 10 years cannot buy out our responsibilities.
Sir Alan Duncan
Notwithstanding the fact that, as I said earlier, the manner in which the Chagossians were displaced in the ’60s and ’70s was deplorable, we think it inappropriate to return them. We have to look to the future, not the past. Compensation has already been agreed and upheld in the courts, so we are now trying to offer a forward-looking support package of £40 million in the manner that I described.
Charlie Elphicke (Dover) (Con)
If resettlement went forward as an option, how resilient would that be to climate change and changes in sea levels, which have been a problem elsewhere in the area? Will the Minister explain the background on the business of ceding the archipelago to Mauritius if it is no longer used for defence purposes?
Sir Alan Duncan
My hon. Friend answers his own questions in a way. Yes, the islands are low-lying and so do face some of the perils of climate change, although I hope that recent decisions and the actions of Governments will stop the water level rising any further. He is correct in saying that there is an understanding that we would cede the islands to the Mauritians in the event that they were no longer needed for defence purposes.
Mike Kane (Wythenshawe and Sale East) (Lab)
I believe this decision to be wrong. I also believe that the FCO has not comported itself well in how this information has come out. This morning I spoke to my constituent, Louis Elyse, who is the leader of the small Chagossian community in Wythenshaw and Sale East. He is utterly heartbroken and said that it was cruel and unusual that the KPMG report gave so much hope only for it to be undermined in such a way by Government yesterday.
Sir Alan Duncan
It is not entirely fair to say that the KPMG report was undermined by Government. The report gave a whole range of possible scenarios, and consultation then followed. I say again that only 25% of the 832 people who responded after further discussions indicated that they would want to return. These are very, very small numbers that would, under the KPMG report, trigger a very high cost per capita. I very much hope that the package we have announced will benefit those of the hon. Gentleman’s constituents who qualify for assistance as Chagossians. It is on those people on his own doorstep that I would like to concentrate the expenditure of this money. We are very happy, in the FCO and DFID, to discuss how that might take place.
Bob Blackman (Harrow East) (Con)
I welcome my right hon. Friend’s commitment to increase the number of visits to the Chagos Islands, and the package of measures for elderly people who were removed forcibly from the islands. Will he undertake to ensure that priority is given particularly to enabling elderly former residents of the islands to return to see the land of their birth, and their children and other parts of their family to see the beauty of the area?
Sir Alan Duncan
My hon. Friend puts his finger on a very important element of the support package that has been designed. It is a heritage package, in most respects, such that those who were born there and are still alive can go back and see the place of their birth, while those who are descendants can see the origin of their heritage. I very much hope that an appropriate amount of the £40 million will be directed to that end and will promptly facilitate exactly what he has described.
Jim Shannon (Strangford) (DUP)
A study by the coalition Government in 2014-15 concluded that resettlement was possible and affordable if Diego Garcia was involved. What consideration was given to that option? How have we moved from the resettlement that the previous Government decided was a good idea to a statement today that says there will be no resettlement at all?
Sir Alan Duncan
The link with Diego Garcia as a potential payer, as it were, for all this is illusory, particularly because following consultation and the discussions that followed the KPMG report, it was clear that few, if any, Chagossians really wanted to work on the base.
Dr Paul Monaghan (Caithness, Sutherland and Easter Ross) (SNP)
On the rights of Chagossians, the United Nations has found in their favour in regard to return, and recently the UN Committee on the Elimination of Racial Discrimination has found against the UK Government and criticised their policy. Why is the Minister ignoring the view of the United Nations?
Sir Alan Duncan
We are not ignoring the view of the United Nations, and I do not accept the hon. Gentleman’s interpretation. For all the reasons that I have described at length today, this would be an impractical proposal that would not lead to happy lives for those who might choose to go there.
Alan Brown (Kilmarnock and Loudoun) (SNP)
The original decision is a throwback to colonial thinking, and the support package currently on offer does not even match the original discount given to Polaris nuclear missiles, so more money should be made available. More recently, the KPMG report says that it is feasible for Chagossians to return, and despite the Minister’s comments on the quality of life that they would get, the consultation showed that more than 200 of them want to do so. How can the Government decide that they are not allowed to return because they would not get a good enough quality of life?
Sir Alan Duncan
Because of the expense and, indeed, because they would not get a good quality of life. Only 200 maximum said that they wished to do that, and it is not the case that the KPMG report said that it was straightforwardly feasible. It presented a number of scenarios, most of which came out at a very high cost that could not justify the resettlement of Chagossians on the islands.
Peter Grant (Glenrothes) (SNP)
I am sure that the Minister knows his history. A couple of hundred years ago, his predecessor would have stood in the same place and assured Parliament that the colony called America could not possibly deliver a decent standard of life to its people. Does not he accept that if the decision whether it is in the interests of islanders to return is made here and they are not given the right to decide, that is a return to the days of the arrogant, colonial, Britain-knows-best days, which should have been consigned to the dustbin of history 100 years ago?
Sir Alan Duncan
No, because, as I have already said, that right of self-determination is not considered legally to apply. We have gone through all the arguments today and explained why we think that would be impractical. It is better to look to the future and to make sure that the help that the islanders need, wherever they are, be it in Mauritius, the Seychelles or the United Kingdom, is properly given by Her Majesty’s Government.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Last but certainly not least, I call Ian Paisley.
Ian Paisley (North Antrim) (DUP)
The Minister’s statement about no right to self-determination will have much wider implications and will be listened to by many people on other islands and rocks around the world. Will he make it clear to those people who may have felt a shiver down their spine when they heard that statement that Her Majesty’s Government do not intend to roll back self-determination anywhere else?
Sir Alan Duncan
My interpretation of the hon. Gentleman’s question—I think that this will be to his satisfaction—is that he is implicitly also referring to sovereignty. May I make it absolutely clear that questions as to the existence or presence of a population on the British Indian Ocean Territory do not affect our position on sovereignty? We have no doubt whatsoever about our sovereignty of the British Indian Ocean Territory.
Business of the House
(7 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Valerie Vaz (Walsall South) (Lab)
Will the Leader of the House give us the forthcoming business?
The Leader of the House of Commons (Mr David Lidington)
The business for next week is as follows:
Monday 21 November—Remaining stages of the Higher Education and Research Bill.
Tuesday 22 November—Opposition day (13th allotted day). There will be a debate on education and social mobility, followed by a debate on the national health service. Both debates will arise on an Opposition motion.
Wednesday 23 November—The Chancellor of the Exchequer will present his autumn statement, followed by a general debate on exiting the EU and transport policy.
Thursday 24 November—Debate on a motion on reform of the support arrangements for people affected by contaminated blood and blood products, followed by a debate on a motion on reducing health inequality. The subjects for these debates were determined by the Backbench Business Committee.
Friday 25 November—Private Members’ Bills.
The provisional business for the week commencing 28 November will include:
Monday 28 November—Remaining stages of the Digital Economy Bill.
Tuesday 29 November—Second Reading of the Commonwealth Development Corporation Bill, after which the Chairman of Ways and Means is expected to announce opposed private business for consideration.
Wednesday 30 November—Opposition day (14th allotted day). There will be a debate on a motion in the name of the Scottish National party. Subject to be announced.
Thursday 1 December—Debate on a motion on transgender equality, followed by a general debate on the future of the UK fishing industry. The subjects for these debates were determined by the Backbench Business Committee.
Friday 2 December—Private Members’ Bills.
I should also like to inform the House that the business in Westminster Hall for 21 and 28 November will be:
Monday 21 November—Debate on an e-petition relating to free childcare.
Monday 28 November—Debate on an e-petition relating to child cancer.
It may be for the convenience of the House if I also say that in view of the intense speculation in the media this morning about the Strathclyde report, my right hon. and noble Friend the Lord Privy Seal intends to make a statement in the House of Lords later today, and I shall place a copy of it in the Library of the House and in the Vote Office as soon as it is available. The Government intend to respond very soon to the Strathclyde report and to the Select Committee reports of both Houses on that subject. I can confirm that although the Government found Lord Strathclyde’s analysis compelling and we are determined that the principle of the supremacy of the elected House should be upheld, we have no plans, for now, to introduce new primary legislation.
Valerie Vaz
I thank the Leader of the House for the information he gave, particularly on the Strathclyde report. Obviously, we will wait to see what it says when he places a copy of it in the Library, but I understand that problems may remain despite the report’s contents.
We have heard nothing from the Leader of the House about the dates for the next recess and the next terms. We appear to stop at 9 February—then there is radio silence; there is absolutely nothing after that. Is there any business? Are we on an election footing? Who knows? Even if the Government do not have plans, the staff and Members, and their families, all have to plan for Easter and summer. We might want to go to see Dippy the dinosaur, who is leaving the Natural History Museum and going on tour—there are rumours he might end up in 1,600 Pennsylvania Avenue in January 2017. The Prime Minister knows what it is like to talk to the winner of the votes of the electoral college—not the popular vote—in the US presidential election. She made the call and heard, as the rest of us do when we try to make an appointment with our doctor or we are talking to our banks, “Thank you for holding. You are ninth in the queue.”
In the Prime Minister’s first foreign policy speech, at the Lord Mayor’s banquet, she said that globalisation—and liberalism, a dirty word—
“in its current form has left too many people behind”.
What we say is that people have been left behind by the past six wasted years of this Government. They have been left behind by: austerity measures; freezes on wages; zero-hours contracts, which now extend to lecturers; current childcare provision; cuts in grants to local authorities, which have decimated local services and caused the closures of libraries; the bedroom tax, which has now been ruled in two cases to be unreasonable; and the reduction in Her Majesty’s Revenue and Customs staff, which has stopped us addressing tax evasion and tax avoidance schemes, and therefore stopped money flowing into the Treasury coffers. Will the Leader of the House give us a debate in Government time to analyse how people have been affected by their policies in the past six years?
May we also have a debate on the sustainability and transformation plans in the NHS? We have had an Opposition debate, but we need a debate in Government time. The British Medical Association and the King’s Fund have added their voices, saying that the plans are not transparent and there is no legal or clinical accountability. Clinicians, patients and the public should be involved, or we will all be left behind by the new NHS plans. I do not know whether you have heard, Mr Deputy Speaker, but they are called STP footprints—that reminds me of Dippy the dinosaur. STPs will form a group with clinical commissioning groups, local authorities and goodness knows how many other people, adding another tier of bureaucracy. We have had a reorganisation of the NHS, under the Health and Social Care Act 2012, and it cost £3 billion. Is this another one? Where are patient care and patient safety in this? These plans need to be made public immediately.
May we have a debate on reaffirming the independence of the judiciary and the rule of law? A judge made an analysis of a case in a lecture to students, and the comments about that are extremely threatening. An hon. Member said:
“If judges dip their toes in political waters by making speeches outside the courtroom, they are asking to get splashed back.”
If anyone says something the Government do not like, they are trolled and trashed. Judges give speeches outside the courtroom all the time. Lord Denning and Lord Scarman did so in the Hamlyn lectures. Lord Bingham did so in the Sir David Williams lectures in Cambridge, and he produced a book called “The Rule of Law”. As I have done before in this House, I encourage all hon. Members to read that book. The situation is a far cry from the Youth Parliament last week, which wanted to debate a better, kinder democracy.
And now to Brexit. The Prime Minister yesterday said that our democracy is underpinned by the freedom of the press. However, No. 10 does not like the fact that the press have said that Whitehall is struggling to cope and that there is no plan for exiting the Union. Will the Leader of the House make a statement on whether there is a plan and whether extra civil servants are required for the 500 projects that relate to leaving the EU? The Leader of the House was the longest-serving Minister for Europe, and he has built very good relationships. He is best placed to be there to negotiate with friends rather than out of secrecy and fear. He must be despairing of the right hon. Members for North Somerset (Dr Fox), for Uxbridge and South Ruislip (Boris Johnson) and for Haltemprice and Howden (Mr Davis), who are like “Three Men in a Boat”, only without the oars. The sequel to that is “Three Men on the Bummel”. Bummel is a German word, so let me explain what it means. Jerome K. Jerome—who was, incidentally, born in Walsall—described it as a:
“journey, long or short, without an end; the only thing regulating it being the necessity of getting back within a given time to the point from which one started”.
That seems to describe the Government’s policy on exiting the Union. The British people are being left behind by this Government.
Mr Lidington
I join the hon. Lady in welcoming and celebrating the sitting of the UK Youth Parliament in this Chamber last Friday. She and I, and the Minister with responsibility for civil society, my hon. Friend the Member for Reading East (Mr Wilson), were present. We all came away feeling energised by the enthusiasm of those hundreds of young men and women for open, vigorous debate and for the process and the institutions of parliamentary democracy. I hope that following their experience here they will go and spread the word in all parts of the country about how important it is for young people, whichever political party they sympathise with, to become involved in helping to shape the future of their country.
Apropos of recess dates, I am keen, too, to bring an end to the suspense as soon as possible, and I recognise that colleagues in all parts of the House wish to have clarity on future recess dates. Equally, the hon. Lady will appreciate that any Government have to bear in mind the pressures that there will be on handling Government legislative business, but I hope to make an announcement as soon as possible. I can promise the hon. Lady that her appetite for additional legislation and other Government business will be more than satisfied in the months to come.
I was surprised that the hon. Lady made slightly disparaging comments about the Prime Minister’s efforts to build, from the start, a strong and robust relationship with the new President-elect of the United States of America. I had always thought it was common ground between the main political parties to accept that it is in the fundamental interests of the people of the UK for a British Government, whatever its political complexion, to seek to maintain a strong, intimate relationship with the US Administration, whether it is Democrat or Republican.
The hon. Lady asked about NHS plans. The STPs that she mentioned will all be made public. Indeed, the arrangements for STPs explicitly provide for local authority health oversight committees to challenge and check any proposal for significant service changes proposed by the NHS as a result of locally based reviews.
The hon. Lady asked me about EU exit. I am sorry if she was not listening during my right hon. Friend the Prime Minister’s response to the Leader of the Opposition yesterday, because my right hon. Friend spelled out the fact that the Government have a very clear plan. It is to secure for British business the maximum access to, and the greatest possible freedom to operate within, the single European market. It is to continue our strong tradition of close co-operation with our European colleagues on police and judicial matters, fighting together against terrorism and organised crime. It is to continue the essential network of relationships on which our foreign and security co-operation is founded. It is certainly to bring an end to the freedom of movement of people as it currently exists. It is also about forging a role for the United Kingdom as a champion of freedom of trade and investment worldwide. I would once have hoped that the Labour party aspired to support those objectives as well.
Equally, I was sorry that the hon. Lady painted such a bleak and inaccurate picture of the Government’s record in office without acknowledging this week’s employment figures. The figures show that more people are in work in the United Kingdom than ever before, and they show that more people with disabilities have secured employment than ever before. The Resolution Foundation has hailed the past 12 months as the best year in history for low-paid employees because of this Government’s introduction of the national living wage.
The hon. Lady said that she was looking forward to following the tour of Dippy the dinosaur around the country. It is somehow appropriate that Opposition Members should pay such attention to that event. It probably brings back fond memories of their recent leadership campaign. Perhaps the fact that the Opposition is mired in Jurassic-era policies helps to explain why so many of the hon. Lady’s Labour colleagues now fear political extinction.
Mr Nigel Evans (Ribble Valley) (Con)
Like the shadow Leader of the House, I believe in the freedom of the media to report, but the BBC increasingly appears to be becoming the “Brexit Bad Corporation”. I was listening to the “Today” programme at 8 am this morning, when it reported on the launch today of four satellites as part of the European Space Agency and the EU’s Galileo programme. At the end of the report, the BBC said that British businesses were fearful they would not be able to co-operate fully with the programme following Brexit. I did a bit of research and found out that China, Ukraine and Morocco are part of the programme, but the last time I looked, none of those three countries was in the European Union. Will the Leader of the House arrange for the Secretary of State for Culture, Media and Sport to come to the House to tell us what discussions she is having with Lord Tony Hall about having some fairness in the coverage of our Brexit?
Mr Lidington
My hon. Friend is right to say that there is active participation by a number of non-member states in the Galileo and various other EU programmes. That indicates that it is possible for a country outside the EU, but enjoying friendly relationships with it, to forge such a partnership. It is probably fair to say that the BBC got a lot of flak from both camps during the referendum campaign. The best position for Ministers to take is to respect the independence of the BBC. We should make complaints if we feel that the Government’s position is misrepresented in some way, but, in a free society, we ultimately have to respect the editorial judgment of the broadcasters and newspaper editors.
Pete Wishart (Perth and North Perthshire) (SNP)
I thank the Leader of the House for announcing the business for next week.
Well, well—it looks like the unelected circus down the corridor has just won the battle of the statutory instrument, as the Government hastily and embarrassingly withdraw all their plans to rein in the powers of the unelected ones. With the imminent ennoblement of the dark lord Farage it seems as though the only intention the Government have for the House of Lords is to increase the numbers in that grotesque place down the corridor.
Today’s piece of Tory Brexit cluelessness does not come from the prosecco-swilling Foreign Secretary as he goes around Europe upsetting the diplomatic community but from the Treasury, as we learn that £100 billion is to be sucked out of the economy because of this shambolic Brexit. Given that dramatic news I presume we are not going to be getting our £350 million for the NHS. May I suggest a way in which we might be able to resolve that situation—could we perhaps get some of the Brexiteer clowns who made that absurd statement during the referendum to come forward and apologise for what they said during the campaign?
We are now anticipating that the Government will be defeated in the Supreme Court when it comes to the appeal on the High Court ruling. Will the Leader of the House tell us what provisional plans he has for legislation as it comes forward? As Leader of the House—this House—will he pledge that there will be opportunities for Members to properly debate that legislation and for amendments to be tabled, and there will be no attempts whatever to curtail any debate on it?
Lastly, after business questions the Labour shadow Leader of the House and I will be doing some recording for the Jo Cox Foundation, as we reclaim the song “You Can’t Always Get What You Want”. It is for a great cause, and I am sure that the Leader of the House will be prepared to support it; perhaps he will even help us get to No. 1 in the new year.
Mr Lidington
The hon. Gentleman will have the opportunity to put questions to the Chancellor of the Exchequer after the autumn statement about the implications for the economy of EU exit and many other matters.
The Government believe that we have a powerful case to argue in the forthcoming Supreme Court case. We intend to make that case. We should not forget that the High Court in Northern Ireland came to a different conclusion from the High Court in England on the matter. Both the Belfast and the London cases are to be heard together by the Supreme Court later this year. The Government are of course completely respectful of the role of the courts and their independence, and of the rule of law. That is written into the ministerial code and the civil service code alike.
I am certainly happy to wish the hon. Gentleman and his colleagues well in their chart-topping endeavour. Given the character of some of the songs that have managed to top the charts at Christmas and the new year over recent decades, he could follow in the footsteps of Clive Dunn and children’s choirs in becoming an emblem of this country’s somewhat eclectic tastes in music.
Pauline Latham (Mid Derbyshire) (Con)
I read with interest today in the Telegraph an article by the Secretary of State for Environment, Food and Rural Affairs about the conference she has been to in Vietnam. May we ask her to give an urgent statement next week to explain why she is saying that we are leading the world in banning ivory but the fact is that we are only consulting on it after Christmas?
Mr Lidington
There will be questions to my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs on 24 November, which will give my hon. Friend the opportunity she seeks. I think hon. Members on both sides of the House will want to support strongly the lead my right hon. Friend the Secretary of State is taking in trying not just to highlight this issue in terms of British public opinion, but in persuading other Governments, in particular those from which the demand for ivory and other products from endangered species largely comes, that it is in their interests and in the interests of the people of the world to maintain wildlife, habitats and the biodiversity of the planet.
Ian Mearns (Gateshead) (Lab)
I thank the Leader of the House for the welcome development of giving the Backbench Business Committee notice of available dates. That has allowed him to announce this morning the next two Thursdays’ Backbench Business debates. Long may that continue.
I was not able to get in on Transport questions this morning, but the delay to the electrification of the Great Western main line is having a knock-on impact. That electrification was going to release class 150 and class 153 diesel trains for use on the northern rail franchise. There is a massive differential in investment in rail between the north and the south, but I am afraid to say that even delays to the investment proposals in the south and the south-west are having a knock-on effect on rail in the northern “poorhouse”.
Mr Lidington
I am grateful to the hon. Gentleman for his comments about my efforts to try to give greater notice to him and his Committee about forthcoming Backbench Business days. I am committed to trying to maintain that good practice.
The Government are committed to pursuing the electrification of the Great Western main line. As the recent announcement reflected, however, we need to ensure that constant attention is paid to the need for best value for the taxpayer in how we go about that. I will draw his concerns about the possible impact on the northern rail franchise to the attention of my right hon. Friend the Secretary of State for Transport.
Sir David Amess (Southend West) (Con)
Will my right hon. Friend find time for a debate on the system of testing at key stage 1 and key stage 2? Concern has been expressed about whether teachers are being adequately trained in the new rules. There also seems to be some inconsistency in the implementation and moderation of the testing, with particular regard to reading at key stage 2 and the disadvantageous effect it may have on children with special educational needs.
Mr Lidington
I ought to declare an interest, as my wife is a primary school teacher who teaches key stage 1 and key stage 2. A wide-ranging consultation, which will commence in the new year, was announced on 19 October by the Secretary of State for Education. It will give teachers, headteachers and others the opportunity to have their say on the current arrangements for primary assessment. The objective surely has to be to have a system in place that seeks always to drive up the standards attained by children in primary school, while of course at the same time making sure that children with disabilities and special educational needs have their particular needs taken into account, and that they are themselves able to succeed to the very limit of their own talents and determination.
Jim Fitzpatrick (Poplar and Limehouse) (Lab)
Fourteen-year-old Nasar Ahmed, who lived in my constituency, died on Monday this week after falling ill at school last Thursday. His family are, naturally, devastated. His death is being investigated by the police as unexplained; by the local authority, which has a duty of care; and possibly by the Health and Safety Executive. I have every confidence that the authorities will conduct a thorough examination, but in the event of wider implications and lessons to be learned my request of the Leader of the House is that I can rely on his support for access to appropriate Ministers outside this Chamber—and, with your approval, Mr Deputy Speaker, inside this Chamber—should that prove necessary in due course.
Mr Lidington
First, may I express my sorrow and deep sympathy for the family of Nasar Ahmed? What has happened to them is the most appalling and unspeakable tragedy that any parent or relative can imagine. Clearly, as there are ongoing investigations, the hon. Gentleman would not expect me to comment further in detail, but I can assure him that the Government will want to pay close attention to the findings, and I am confident that should central Government need to reflect on current law and practice the relevant Ministers will be happy to talk to him.
Bob Blackman (Harrow East) (Con)
Last weekend, we commemorated those who sacrificed their lives in service to this country to enable us to live in freedom and democracy. This weekend, we will celebrate the role of the Indian army in the great war and world war two, and on Sunday the Association of Jewish Ex-Servicemen and Women will march at the Cenotaph, and I will be pleased and honoured to join them. Will my right hon. Friend find time for a debate in Government time, particularly in the centenary of the great war, to commemorate the role of the various parts of what was then the empire, and is now the Commonwealth, in securing our freedom?
Mr Lidington
I cannot promise my hon. Friend a debate in Government time—this might well be a suitable subject for an Adjournment debate either here or in Westminster Hall—but I think that the House will be at one in joining him in saluting the sacrifice and service of those who served in the Indian army during both world wars and in saluting Jewish servicemen and women who also fought for freedom.
Ms Margaret Ritchie (South Down) (SDLP)
Will the Leader of the House facilitate a statement from the Home Secretary regarding the position of non-EEA fishermen, mainly Filipinos, who are critical to the fishing industry in the County Down ports and the ports of the west of Scotland and who have already been subjected to raids by UK border agencies? We urgently need proper regulation in this area. We have already had meetings with the Immigration Minister, but we now urgently need a statement from the Home Secretary outlining a solution.
Mr Lidington
Having visited Kilkeel a few years ago, I am aware of the importance of the fishing industry in the hon. Lady’s constituency, and I will certainly draw to the Home Secretary’s attention the points she has made. It is clearly important that we have arrangements to ensure that people from other countries who come and work here are legally entitled to be here, not least because legal status enables them to take advantage of the opportunities to work and, to some extent, access services they might need. Without legal status, they can so easily be exploited by rogue employers. I accept, however, that the fishing industry has for some time needed to take on labour from the Philippines and other countries, and I will make sure that Home Office Ministers are aware of this problem.
Graham Evans (Weaver Vale) (Con)
The House of Commons briefing paper on the northern powerhouse, issued on 1 November, states that the ability of the north-west to retain talented graduates was identified as a key factor in the success of the northern powerhouse. May we have a debate on how the Government, in partnership with north-west universities and business, will work to better retain skills developed in the north-west?
Mr Lidington
My hon. Friend makes a powerful point. When we look at how to encourage a revival of the civic dynamism that characterised the growth of the great northern cities during the 19th and early 20th centuries, we need to think about economic stimuli and about how we can further encourage those cities as centres of educational and research excellence and as centres of culture and the arts. That is why the devolutionary model initiated by my right hon. Friend the Member for Tatton (Mr Osborne) and being taken forward by the present Government is so attractive. It enables elected authorities in the region itself to work across the piece on policies that address the cultural and educational issues, alongside those simply to do with economics.
Alex Salmond (Gordon) (SNP)
Will the Leader of the House assure us that next week’s debate on Europe will be broad enough to encompass today’s opinion poll finding that 90% of the country wants to be within the single marketplace? Given that I want to be in the single marketplace, that I know the Leader of the House wants to be in the single marketplace and that anybody with an ounce of a sense understands that in this Trumpian world of protectionist economics where the special relationship means being 11th in the telephone queue for a call with the new American President, we had better be in the single marketplace, will the Leader of the House now get up to the Dispatch Box and tell us that he actually understands the difference between access to a marketplace, which the association of Patagonian shoe manufacturers has, and being within the single marketplace, which should be the overwhelming priority of the Government to secure?
Mr Deputy Speaker (Mr Lindsay Hoyle)
Business questions are about understanding—that is the only slight difference.
Mr Lidington
I remind the right hon. Gentleman that, as the Prime Minister repeated yesterday, her declared objective is not just the maximum access for British companies to the European market, but the greatest possible freedom to operate within that market as well. Clearly, the detail of that future trading and investment relationship is going to be an absolutely core element of the negotiations that we intend to start next year. I am sure the right hon. Gentleman will be ingenious and experienced enough to find ways of weaving his particular concern into next week’s debate or indeed on other occasions.
Wendy Morton (Aldridge-Brownhills) (Con)
My right hon. Friend may not be aware that Walsall Council is proposing to close all the libraries within the borough, save for one in the town centre. There are six libraries in my constituency and they are all under consideration for closure. What advice can my right hon. Friend give me about this, and will he consider allowing time for a debate on libraries and on the fact that libraries are about much more than just books?
Mr Lidington
My hon. Friend is right to challenge some of the decisions that Walsall Council is proposing to take about libraries. Of course local authorities throughout England have a statutory duty to provide a comprehensive and efficient library service, and the Secretary of State for Culture, Media and Sport has a statutory duty to superintend that local provision. She also has the power to call a local inquiry if she believes that there is evidence to doubt that the local authority is providing the required service. I am sure that my hon. Friend will ensure that, if such a service is not being provided by Walsall Council, she will put a strong case to the Secretary of State.
Maria Eagle (Garston and Halewood) (Lab)
Following the publication of the Cheshire and Merseyside NHS sustainability and transformation plan on Wednesday, a senior manager from Liverpool clinical commissioning group has admitted in the Liverpool Echo that the plans are financially driven, were drawn up in secrecy and are already being implemented—yet none of my constituents has had any say in how the proposals were formulated. May we have a debate in Government time so that we can properly consider the impact on my Garston and Halewood constituents of the proposals to reduce the opening hours at Whiston A&E and supposedly “reconfigure” the Liverpool women’s hospital while merging the Royal, Aintree and Broadgreen Trusts?
Mr Lidington
As the sustainability and transformation plans are published, it is important that they are examined closely. As I said earlier, local authorities have the power in law to exercise scrutiny and a check on proposals for changes in service delivery. The Government have delivered to the NHS all the money that the NHS chief executive asked for to fund reforms to the NHS to make it suitable for the health policy challenges of today and the future. When any of us talk to clinicians in our constituencies, we often find that it is the doctors and the nurses who say that there sometimes needs to be a change to the pattern of the location of services, particularly to deliver more specialist units, to provide patients with better treatment.
Henry Smith (Crawley) (Con)
With today’s news that Boeing is planning to open a new aviation maintenance facility at Gatwick airport, supporting over 100 jobs, may we have a debate on the importance of the British aviation industry—particularly post-Brexit, given that we are an island trading nation—hopefully including the issue of reducing air passenger duty?
Mr Lidington
I shall take my hon. Friend’s last comment as a late bid to the Chancellor of the Exchequer prior to the autumn statement, but he has made a good point about the importance of the aviation industry to the country’s economic health and job creation. I think that Boeing’s investment at Gatwick is a further sign that, despite the political turbulence that is bound to follow the referendum result, our country is still seen as an extremely attractive destination for global investors.
Chris Bryant (Rhondda) (Lab)
This building is one of the most iconic in the world, and millions of people take photographs of it every day, but it has problems. Last week the House of Lords had to go into “Pleasure”—its word, not mine—because of the noise of the building work that was going on. It is now 10 weeks since the Joint Committee, two of whose members were Ministers, produced its report on what should happen here, and all the evidence suggests that any delay of this nature costs millions of pounds more. Why can we not have a debate as soon as possible, and certainly before Christmas?
Mr Lidington
Both the Leader of the House of Lords and I want Parliament to have an opportunity to debate this matter and make a decision as soon as possible. As a responsible Government, we have felt the need to seek the advice of the independent Major Projects Authority about the Government’s proposals in particular, but I hope that we shall be able to announce a date before much longer.
Amanda Milling (Cannock Chase) (Con)
Voting in my shop competition closes in a couple of weeks’ time, on 1 December, and I shall be announcing the results on Small Business Saturday. I urge those who have not yet voted for their favourite shops to do so before voting closes. May we have a debate about the role that our high streets play in creating new jobs and ensuring that we have thriving local communities?
Mr Lidington
My hon. Friend is right to speak up for the importance of high streets as a focus of both civic identity and economic activity in towns and villages throughout the country. I applaud the initiative that she has taken, and I hope that not only many Members of Parliament but many members of the public will play an active part in the poll she has launched.
Ian Paisley (North Antrim) (DUP)
May I press the Leader of the House a little further on his response to the earlier question about the Joint Committee’s report on restoration and renewal? Does he intend the motion and debate proposed in the report to be dealt with in the House before Christmas?
Mr Lidington
I am not yet in a position to announce a firm date. I am, however, as aware as anyone else of the intense pressures on services in the building that need to be completely renewed, and of the links between the R and R project and the timetable for other restoration work that needs to be done.
Chris White (Warwick and Leamington) (Con)
As we approach the winter months, it is essential to ensure that people have access to the best possible tariffs for their energy. May we have a debate about competition in the UK energy market?
Mr Lidington
That is an important point, especially as winter is now approaching. We have a more competitive domestic retail energy market than ever before, and nearly 4 million energy accounts were switched between January and June this year, but my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy wants to do more. He is particularly anxious to ensure that customers are not penalised for loyalty, and that energy companies treat all their customers fairly, not just those who switch between suppliers.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
May I remind the Leader of the House that our constituents will be deeply affected by the decision to take action on article 50, which will, it seems, be made in March? It will make a dramatic change to their lives—indeed, to all our lives. Is it not about time the Leader of the House told us that we shall have a major opportunity every week to debate our progress towards that date? This is such a big issue that my constituents demand accountability of that kind from the House. Will the Secretary of State introduce special measures to meet their needs?
Mr Lidington
I have just announced the second in a series of debates in Government time about aspects of the public’s decision in the referendum that this country should leave the European Union, so the Government are committed to providing the opportunities the hon. Gentleman seeks. He will also have the opportunity to put questions to the Foreign Secretary on 22 November, and to the Secretary of State for Exiting the European Union on 1 December.
Mims Davies (Eastleigh) (Con)
Will my right hon. Friend assist in securing a debate on the preservation of ancient woodland and veteran trees? People are writing to me, along with my hon. Friends the Members for Winchester (Steve Brine) and for Meon Valley (George Hollingbery), about the possible bulldozing of ancient woodland and its loss to our communities and the environment. This needs further protection where there are no neighbourhood or local plans, but options B and C in our proposed local plan are putting my constituents and their green spaces in peril.
Mr Lidington
My hon. Friend’s point will strike a chord with many Members on both sides of the House. She may get an opportunity to raise that matter on Monday 28 November during Communities and Local Government questions, but I should add that the sooner local authorities get their local plans in place, the sooner they will be able to assure local people that there will be proper protection for ancient woodlands and for other key environmental amenities.
Joanna Cherry (Edinburgh South West) (SNP)
Yesterday the Exiting the European Union Committee heard evidence from Dr Hannah White, director of research at the Institute for Government. It has warned that there will be a full-blown constitutional crisis unless all nations of the UK are involved in the negotiations around leaving the EU. Under questioning, Dr White said it would be almost unprecedented for one of the devolved legislatures to express concern and refuse to pass a legislative consent motion but for the UK Government to go ahead none the less. May we have a debate about how we can avert the constitutional crisis that the Institute of Government has warned about by involving all the devolved nations fully in negotiations to leave the EU?
Mr Lidington
The Government have made it clear again and again that we are committed to engaging in detail and constantly with all three devolved Administrations, whether that is at the level of the Joint Ministerial Committee, or at operational level between Ministers here and Ministers in the devolved Administrations or between officials in the different Administrations.
Mr David Nuttall (Bury North) (Con)
May we have a debate on responsibility for repairing damaged culverts? They result in flooding in certain parts of my constituency every time there is heavy rain, and there is a problem with determining who is responsible for the damage, who is responsible for repairs, and what can be done if nobody accepts responsibility, or if they do but cannot afford to pay for the damage.
Mr Lidington
I will draw my hon. Friend’s concern to the attention of the relevant Minister at the Department for Environment, Food and Rural Affairs, but I can say to him that under the Flood and Water Management Act 2010, unitary authorities and county councils have a duty to be the lead local flood authority. That Act also requires all authorities to co-operate and exchange information.
Paul Flynn (Newport West) (Lab)
Is the Leader of the House excited by today’s news of a unique parliamentary series of events next year with the performance of a brand-new musical under the snappy title of “The Public Administration and Constitutional Affairs Committee takes oral evidence on the relationship between Whitehall and Kids Company”? Does he not think that arrangements by him to have a performance in this House would be both politically instructive and culturally enriching?
Mr Lidington
I can barely contain my excitement. I look forward to the Chairman of the Public Administration and Constitutional Affairs Committee, my hon. Friend the Member for Harwich and North Essex (Mr Jenkin), who has a fine baritone voice, playing himself in such a performance.
Several hon. Members rose—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. Let’s hear from a man who should be able to deliver well: Conor McGinn.
Conor McGinn (St Helens North) (Lab)
Thank you very much, Mr Deputy Speaker. My Bill to introduce Helen’s law would deny parole to murderers who refuse to reveal the location of their victims’ remains. It has the support of 400,000 members of the public and many Members on both sides of the House, but will only become law if the Government support it or incorporate it into their legislative programme. Will the right hon. Gentleman and perhaps the Justice Secretary meet me and Helen’s mum, Marie McCourt, to discuss how we might work together on this?
Mr Lidington
I will ask the relevant Minister in the Justice Department to contact the hon. Gentleman about this case. No one in the House today will have anything but unreserved sympathy for the family involved, or indeed for any other family in the same appalling situation. There will be also opportunities for him to highlight this issue further through Adjournment debates.
Greg Mulholland (Leeds North West) (LD)
It has now emerged that the person appointed to the quasi-judicial role of Pubs Code Adjudicator has made personal loans of more than £230,000 to Fleurets, a company that is dependent on income from the pub companies that he is supposed to regulate. Having taken four months to respond to the Select Committee, which said that the adjudicator’s appointment should be rescinded, the Secretary of State has now said that he is not going to look into the matter. That is not good enough. May we have an oral statement at the Dispatch Box from the Secretary of State?
Mr Lidington
I am not familiar with every detail of this case, but my understanding is that the regulator in question was appointed following the normal public appointments process involving all the Nolan principles. I also understand that the criticisms that the hon. Gentleman and others have made have been carefully considered and that there was no evidence to justify a change to the original decision.
Diana Johnson (Kingston upon Hull North) (Lab)
On 15 September, the rail Minister, the hon. Member for Blackpool North and Cleveleys (Paul Maynard), told me that I could expect “good news” about rail electrification to Hull shortly. Yesterday afternoon that scheme was scrapped, despite it appearing in the Government’s northern transport plan. May we please have a debate in Government time about whether people in Hull, who pay their taxes and often pay higher rail fares, can believe anything that a Tory Minister says to them about being included in the northern powerhouse?
Mr Lidington
As the hon. Lady knows, the Government are investing large sums of taxpayers’ money in improvements to transport infrastructure and, more generally, in northern cities, but I will alert the rail Minister to her particular concern about the situation relating to Hull.
Chris Law (Dundee West) (SNP)
The city of Dundee has spent years and hundreds of thousands of pounds preparing a bid to become the 2023 European city of culture, which would bring funding from Brussels, as well as being a major boost for tourism and cultural, social and economic development. This has now been thrown into doubt, bizarrely by the UK Government’s Culture Secretary, who wants to withdraw from the competition. This has led to the Foreign Secretary having to write to suggest that this move would be framed as “pulling up the drawbridge”. The Culture Secretary should check her job title—the clue is in the name. May we have an urgent debate on this matter before yet more Brexit folly leads to a devastating blow for Dundee?
Mr Lidington
Cities of culture will be one aspect of the forthcoming negotiations between the United Kingdom Government and the EU 27. This is tied up with our EU membership and our eligibility to draw upon EU funds.
Paula Sherriff (Dewsbury) (Lab)
Four months have passed since the end of the Government’s consultation on tips, gratuities and service charges, but abuses are still happening, with workers being told that they will receive a share of the service charge only if their pay is cut by a third. The former Leader of the House promised some months ago that the Business Secretary would update the House about this, but there has been a deafening silence. Will the Government now provide time as soon as possible for the new Business Secretary to make a statement on this matter?
Mr Lidington
If that commitment was given in the past, I will ensure that the Secretary of State for Business, Energy and Industrial Strategy is made aware of the hon. Lady’s wish for such an announcement as soon as possible.
Kirsten Oswald (East Renfrewshire) (SNP)
Twice visitors from the diocese of Hyderabad have been refused visas to visit the Church of Scotland Presbytery of Glasgow, despite the Church having committed to bear the costs. The reason for the refusal suggested that the visitors were not genuine, despite the existence of an ongoing twinning relationship. I hear similar spurious reasons for visa refusals week in, week out. May we please have a statement in Government time on how the Government plan to sort out this sorry situation?
Mr Lidington
I know from my constituency experience that decisions by immigration officers about individual visa applications are often difficult and sensitive. My advice to constituents is always to ensure that the paperwork—the audit trail—is wholly in place so that it is absolutely clear that people are going to abide by the terms of the visa, if granted, and that they will return to their own country at the end of the visa term. The hon. Lady will clearly not expect me to know about that particular case, but if she writes to me, I will pass the details to the Immigration Minister.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
Yesterday, the National Assembly for Wales unanimously supported a motion led by my colleague Steffan Lewis calling for an urgent review of the mineworkers pension scheme. Over the years, the Treasury has cashed in around £8 billion of surpluses from the scheme for acting as a guarantor. May we have a Treasury statement on the matter so that MPs who represent mining communities can make the case for a review?
Mr Lidington
Treasury questions on 29 November may well provide the hon. Gentleman with that opportunity.
Chris Stephens (Glasgow South West) (SNP)
May I check with the Leader of the House whether the Government will publish Sir John Parker’s national shipbuilding strategy prior to the autumn statement? If so, may we have a debate in Government time to discuss this iconic, highly skilled industry, which employs many of my constituents and other workers in the United Kingdom?
Mr Lidington
I will ensure that the shipping Minister knows about the hon. Gentleman’s wish for the strategy to be published as soon as possible. I hope that the hon. Gentleman will welcome the Ministry of Defence’s commitment to spend more money on building new ships in Scottish shipyards, which will maintain the jobs and expertise that he rightly celebrates.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
I recently spoke to the CEO of Pernod Ricard, who informed me that the Chivas Brothers site in Paisley will close in three years. I learned yesterday that while the workforce consultation is in its infancy, the company has applied for permission to demolish part of the site. May we have a debate on employment rights to ensure that such applications can take place only after a consultation has concluded?
Mr Lidington
As the hon. Gentleman will acknowledge, this is a clearly a commercial decision for the company concerned, but the company must, of course, act in accordance with UK and European employment law as it goes about such things. An Adjournment debate might give the hon. Gentleman the opportunity to highlight this important local issue.
Alan Brown (Kilmarnock and Loudoun) (SNP)
My youngest son is doing an accountancy course. He explained to me that if I want to spend 2% of my budget on one thing and 0.7% on another, I need to set aside 2.7% of my budget. Will the Leader of the House therefore explain how the Government can claim to spend 2% of GDP on defence and 0.7% on overseas aid when those two sums do not add up to 2.7%?
Mr Lidington
The 0.7% target refers to official development assistance expenditure, as defined by the OECD. The 2% is a NATO target, which relies on a completely different set of criteria. The hon. Gentleman is asking me to compare apples with pears.
Mr Mark Williams (Ceredigion) (LD)
In February, Department for Culture, Media and Sport Ministers froze rather than cut their contribution to S4C’s budget pending the outcome of a review into the broadcaster’s future. We still have no review. Will the Leader of the House allow us a debate on a sustainable future and funding for S4C?
Mr Lidington
I completely understand why Welsh-language broadcasting is important to the hon. Gentleman’s constituents. I note that Welsh questions are on 30 November, which might provide him the opportunity to raise that matter.
Jim Shannon (Strangford) (DUP)
Pakistan’s poverty rate is some 39%. It has weak governance and political institutions. It has been gripped by violent extremism—it is No. 22 in the league table—and its levels of persecution of Christians and other ethnic minorities put it at the top of the league table for that. It is affected by climate change and natural disasters, which have exacerbated migration and food insecurity. Will the Leader of the House agree to a debate on the important issue of the shrinking space for civil society in Pakistan?
Mr Lidington
The hon. Gentleman is a formidable champion of religious rights in parts of the world where those rights are under threat. I think everyone here would want to join him in arguing passionately for freedom of worship and religious expression everywhere. Foreign Office questions are coming up on 22 November, at which he might wish to raise this subject. We do need to continue to help the fragile authorities in Pakistan, but we try to target our aid through non-governmental organisations and others to ensure that it reaches those who are in such desperate need.
Martyn Day (Linlithgow and East Falkirk) (SNP)
Following inquiries from constituents who are serving prison officers, I tabled written parliamentary questions 46654 and 46655 on 15 September regarding officers’ life expectancy, and their medical and injury awards. To date, I have had no answer, and not even a holding response to what were named day questions submitted more than two months ago. That is unacceptable. May we therefore have a debate in Government time on the response times to parliamentary questions?
Mr Lidington
The Government not only set expected standards for replies to parliamentary questions, but publish regular bulletins showing how each Department has performed against those standards. I am concerned by what the hon. Gentleman says and I shall make sure that it is chased up today with the Department concerned.
Mark Durkan (Foyle) (SDLP)
Earlier, the Leader of the House waxed positive about the Government’s commitments to city deals and regional growth deals. May we have a debate in this House on the range and reach of such deals across the UK, including the very positive developments and prospects in Scotland and Wales? That might help to illuminate the resistance and negligence on the part of the Northern Ireland Executive in failing to take up what previous Whitehall Ministers have said would be their readiness to support deals—if they get proposals—including cross-border deals.
Mr Lidington
It may well be that either a long debate in Westminster Hall or a Backbench Business Committee debate would provide the opportunity for the kind of exchange of best practice that the hon. Gentleman wants, so that Members from different parts of the UK can all share their relevant experiences. Clearly the Northern Ireland Act 1998 devolves important powers to the Northern Ireland Executive and Assembly, and it must be for the authorities in Northern Ireland primarily to decide how to take this policy further.
Peter Grant (Glenrothes) (SNP)
The business statement gives us no indication of when the Brexit Secretary will come to the Dispatch Box, as required by a resolution of this House, to explain why he signed up to the comprehensive economic and trade agreement without waiting for it to clear parliamentary scrutiny, and nor does it give us any indication as to when an urgent debate in Government time, which is also required, will be held. I raised this matter in business questions on 20 October. During the intervening four weeks, will the Leader of the House tell us what he has done to get those two items of urgent business on to the Order Paper?
Mr Lidington
The position is that CETA has to be ratified by all 28 member states of the European Union. Under our system, that means that the treaty—for that is what this is—must be laid before Parliament under the terms of the Constitutional Reform and Governance Act 2010 and that can, if Members so wish, provide the trigger for a debate.
Stewart Malcolm McDonald (Glasgow South) (SNP)
How many more times do the Government expect to end up in court? Not only have they been taken to court over the article 50 shambles, but they lost their appeal against the Terence Higgins Trust and are now compelled to provide PrEP—pre-exposure prophylaxis—anti-HIV drugs to those who badly need them. Given that, can we have a debate in Government time on the commissioning of this treatment, which will make a massive difference to rolling back the tide on the spread of HIV across the United Kingdom?
Mr Lidington
We welcome the clarity that the recent court judgment on PrEP provided. As the hon. Gentleman knows, there was a genuine difference between the view of the NHS and the view of local authorities as to where legal responsibility ought to rest, and we now have that clarity. Over the years, Governments of every political shade have got used to being taken to court by way of judicial review or other challenge. That is what living in a free society under the rule of law is about.
Backbench Business
(7 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text
Employment and Support Allowance and Universal Credit
(7 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
15:25 - The House divided: - Ayes: 127 / Noes: 0 - Question accordingly agreed to.
Mr Speaker
To move the motion, in a contribution that should not exceed 15 minutes in total—I make this point by way of reminder, as there has been slippage in recent times—I call Mr Neil Gray.
Neil Gray (Airdrie and Shotts) (SNP)
I beg to move,
That this House notes the Government’s plans to reduce the Employment and Support Allowance work-related activity component and the corresponding limited capability for work component in universal credit in April 2017; further notes that this measure will cut the weekly amount received by recipients with long-term health conditions or disabilities by £30 and that these cuts are due to take place before the promised Work and Health programme Green Paper can be considered or implemented; and therefore calls on the Government to use the upcoming Autumn Statement to postpone the cuts to Employment and Support Allowance work-related activity component and the corresponding limited capability for work component in universal credit until appropriate alternative measures to progress the commitment to halve the disability employment gap have been considered, in order to secure support for current and future claimants so that sick and disabled people are supported adequately when they are unable to work.
I thank the Backbench Business Committee for accepting my application for this urgent debate today. It was brought to the Committee at short notice and with my added time pressures ahead of the autumn statement, so I am grateful to the Committee. I am grateful also to the MPs from nine parties in this Parliament who supported the motion.
From April 2017, new employment and support allowance claimants who are placed in the work-related activity group will receive £29.05 less than do current ESA WRAG claimants. The Welfare Reform and Work Act 2016 legislated for this cut, and the Government promised
“new funding for additional support to help claimants return to work.”—[Official Report, 8 July 2015; Vol. 598, c. 333.]
This afternoon, I intend to set out why the Government should use the opportunity of the autumn statement, a new Prime Minister, a new Chancellor and a new set of Department for Work and Pensions Ministers to pause the cuts to ESA WRAG and the corresponding universal credit work allowance elements, at least until the new system that they are to propose has been scrutinised and implemented.
Stephen Timms (East Ham) (Lab)
I agree with the motion. Does the hon. Gentleman recall, as I do, that the Conservative party manifesto said that the target for increasing employment support for disabled people was to halve the disability employment by 2020, and does he share my dismay that that target has been abandoned?
Neil Gray
I sincerely hope that it has not been abandoned and that the Government will continue to work towards it. I will come to that later in my speech.
It is clear to me that it is not Opposition politicians but Government Back Benchers who are most influential in changing the minds of Ministers, especially when those Ministers currently have such a narrow majority, so I am pleased to have the support of at least five Conservative Members for this motion. In their actions in supporting this debate, they are indeed honourable, for it is not an easy thing to go against the current thinking of their party. I am aware that a number of other Conservative Members are expressing their concerns in private, and some have made more public statements of concern, such as the right hon. Member for Wokingham (John Redwood) and the former Secretary of State for Work and Pensions, the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith). I am not standing here today to lambast the Government. I am here to make a cross-party appeal to the Government: please press pause on these cuts.
Today is about this new set of Government Ministers having an opportunity to look at this issue again—to look at the timetable of events that have led us to this point and to look ahead to the impact that these cuts will have on nearly half a million sick and disabled people who have been found unfit for work. Yesterday, I attended an event in Westminster with Disability Agenda Scotland, which is an organisation of six disability charities north of the border. One of the speakers at the event really highlighted for me, and should highlight for us all, why this issue is so important.
John Clarke from Stirling spoke about his experience of trying to enter the employment market. He volunteered for 10 years in a charity shop. He took on all the responsibilities that an employee would be expected to take on. He did cash handling, was customer facing and turned up for his shifts in a timeous fashion at all times. He has been making a very meaningful attempt to find work. John has been trying to find paid employment, using the significant experience that he gained from his time at the shop to progress that, but has failed to do so.
John just happens to have a learning disability and is in receipt of ESA WRAG. He is not financially incentivised to be out of work because he is on ESA WRAG; he is desperate to get a job. He needs his ESA WRAG, because he has additional costs associated with finding work, but John also needs the Government to come forward with that additional package that the Prime Minister talked about yesterday—such as supporting employers, publicising Access to Work more widely and helping employers see that someone like him would be an asset, not a liability, to their workplace.
What is most concerning for me about John’s story is that he has a new volunteering role after moving on from the charity shop, but the jobcentre wants him to stop that so he can come in to carry out job searches. I put it to those on the Treasury Bench today—what is more beneficial to John, not just for his ability to get a job, but for his emotional wellbeing, his self-worth and his feeling of contributing to society?
This is where we come to the crux of the issue, and John summed it up so well. He said, “Everyone has needs and it is important that these needs are met.” That is the starting point from which the UK Government should be working. We cannot escape the fact that part of that need is financial. It is worth remembering that the rationale for paying some claimants more than others was considered by Richard Berthoud in his 1998 report on disability benefits. He found that the primary reason historically was that those who have to live for a long time on social security could not be expected to survive on the very low income available as a temporary measure for a short-term claimant.
Some people may argue that those who currently receive ESA WRAG, like John, will not be affected by the cut, but as people fall in and out of work, with many of those who receive ESA WRAG the subject of fluctuating conditions, they could well be affected. So if John gets a job after April next year, which I hope will happen sooner for him, and if, unfortunately, it does not work out, although obviously I hope it does, John will reapply for ESA, but will receive £30 per week less than he does now. That is a reduction in income of almost a third between what John receives now and what he would receive next year.
This cut will create two tiers of disability support and create an arbitrary cut-off for people to receive a reduced support rate, purely by virtue of their application date. The Scottish Association for Mental Health agrees. It says that this cut could provide a perverse disincentive to work for people with mental health conditions, who make up 49% of ESA WRAG recipients. It says that people who are currently in receipt of ESA may be affected by the forthcoming change in April 2017 if they have been claiming the benefit and move into work before they are well enough to do so.
Why should John’s peers who apply for ESA WRAG next year get two thirds of the support that John gets now and could continue to receive if, sadly, he does not find a job? John just wants a job. He is not incentivised to be out of work because of ESA WRAG payments. Such a suggestion is an insult to John and to the hundreds of thousands of sick or disabled people like him who want to work but struggle to get noticed in the employment market. The Government will add to that frustration and the feeling of rejection by telling them that the £30 a week lifeline is being pulled away because it somehow holds them back.
The payment of a higher rate of ESA WRAG compared to jobseeker’s allowance was supposed to acknowledge the longer time that someone in that position will take to find employment. It was also supposed to acknowledge the additional costs that someone with a long-term illness or disability incurs as they carry out work-related activity. Scope is particularly concerned at this aspect and says that this cut to disability support will have an impact on the financial wellbeing of sick and disabled people, leaving them further from work, not closer. Its research suggests that 49% of disabled people rely on credit cards or loans to pay for everyday items such as food and clothing.
New figures today from the StepChange Debt Charity show that a third of ESA recipients were running a budget deficit, and that figure could rise to over a half if they had a cut to their income, however small that cut. John’s experience shows us that it is not easy to tell ESA WRAG recipients to find work to make up for that cut. He has done everything he can to do that.
This leads me on to the timing issue before us. During the debates on the Welfare Reform and Work Bill, the Government at the time said that they would find new funding for additional support to help claimants return to work—new money and a new system, which was included in the work and health programme White Paper, now the Green Paper. I argued then and I repeat now, that the Government cannot cut away this lifeline support before the new system of support is in place, otherwise there will be a vacuum of support from April. ESA WRAG will no longer be available for new or returning clients, but the new system, which the Government hope will do a better job, will also be unavailable.
The Government need to get the horse back in front of the cart. They need to put these cuts on pause, at least until we can see what is coming forward. Their new system is still in Green Paper consultation form. The ESA cuts happen in four months. Even if the new system will be better, we have seen nothing more than consultation proposals, and we do not know when the new system will be implemented.
That view is supported by the Disability Benefits Consortium, which represents 60 disability charities. It has published an open letter today, which is signed by 74 disability charities and other organisations, including Action on Hearing Loss, Age UK, the National Autistic Society, Enable Scotland, Action for ME, Carers UK, the MS Society, the Royal College of Psychiatrists, Scope, Mencap, the Royal British Legion, Citizens Advice and dozens of others I wish I had time to mention individually, as they represent health conditions and disabilities that hon. Members’ families, friends and, certainly, constituents will have. Those organisations say that this cut will undermine the Government’s welcome commitment to halve the disability employment gap. Their survey of over 500 disabled people found that seven out of 10 said that ESA cuts will cause their health to suffer. More than a quarter said they sometimes cannot afford to eat on the amount they currently receive from ESA, and nearly half said that this cut will probably mean they will return to work later than they would have done.
The Government predicted that savings of £450 million a year would be realised from these cuts. Just two weeks ago, we saw the welcome publication of the health and work Green Paper, which sets out the options for the Government to create a replacement system. The budget for that for next year is £60 million, rising to £100 million by 2020-21. That does not equate to new money; it does not even match the cuts being made to ESA WRAG—a point echoed by today’s open letter from the charities, which cannot see where the additional support for disabled people to find work will come from, or how it will mitigate the effects of the cut.
There must also be concern on the Treasury Bench after the Supreme Court ruling on the bedroom tax. Letters, which have been published, between the Equality and Human Rights Commission and the hon. Member for Birmingham, Hall Green (Mr Godsiff) highlight the concerns the EHRC has regarding the Government’s impact assessments on these cuts.
Ian Murray (Edinburgh South) (Lab)
I congratulate the hon. Gentleman on securing this debate. Most disabled people I know in my constituency are desperate to work if they can and would give every penny they have to get back into work, but can I just press him on one point? He said at the start of his speech that the only way we will persuade the Government to change their mind is through a Conservative Back-Bench rebellion. That is not going to happen, so can I plead with him to join me in persuading the Scottish Government to use the welfare powers they have to replace ESA for disabled people in Scotland? They have done it with the bedroom tax; let us persuade them to do it with this as well.
Neil Gray
Thank you, Mr Speaker. I am disappointed in the hon. Gentleman. He knows well that ESA has not been devolved, and it is not in the Scottish Government’s competence. I genuinely believe that there is a feeling on the Conservative Benches that the Government can change their mind and that there are workings under way to make that happen, so his pessimism about where the Government might be going is, I hope, unfounded.
Parkinson’s UK points out that the Government’s statutory obligations may not have been met, leaving them open to further legal challenge.
In conclusion, I want today to be a time for reflection for the Government. I want them to reflect on whether they truly believe that people such as John will benefit from this cut without a replacement support system being in place. I want them to listen to those 74 disability charities and other organisations, and to right hon. and hon. Members on both sides of the House, and I want them to pause these cuts, at least until they have delivered what they promised would be a better system. Everyone has needs, and it is important that those needs are met. I hope those are the words ringing in the ears of Ministers today.
Several hon. Members rose—
Mr Speaker
Order. I advise the House that, on account of the number of would-be contributors, we need to start with a limit on individual Back-Bench speeches of eight minutes, and we will see how we get on.
Peter Aldous (Waveney) (Con)
I do not think I will be taking the full eight minutes, Mr Speaker. I am grateful to the hon. Member for Airdrie and Shotts (Neil Gray) and to colleagues on both sides of the House for securing this important and timely debate.
Any welfare-to-work system needs to satisfy four criteria. First, it should support people and families in their times of need. Secondly, it should provide every assistance to people in moving forward and in getting back into work, where that is a realistic objective for them, taking into account their personal circumstances. Thirdly, there should be an underlying theme that work must pay, so that welfare does not become a lifestyle choice. Fourthly, any system must be affordable to the nation as a whole.
The system we have, which has evolved over many years, has, I am afraid, become incredibly complicated. It would be great if we could start with a clean sheet of paper, but I fear that is not possible, given where we are at present. The Government should be commended for taking on the challenge of seeking to reform the system and for not filing it away in the “too difficult” tray. Credit is also due to them for some of their initiatives in this Parliament and the last Parliament: taking the low-paid out of tax altogether, the introduction of the national living wage and the provision of 30 hours of free childcare.
The question today is whether the proposed changes to universal credit and ESA satisfy the four criteria I outlined. I would just like to make three observations as to whether they do or not. First, I would like to look at whether the changes are properly researched, backed up by evidence and supported by impact assessments.
When the Welfare Reform and Work Bill was going through Parliament in the spring, it was made clear to me that reductions in ESA WRAG would be followed by a full consultation on the package of support measures to help the disabled into work. At that time a White Paper was proposed, and we were assured on the Floor of the House that it would be published before the summer recess. In the event, a Green Paper, which is actually very good, was published at the end of last month, and a consultation will now run until 17 February. I say to the Government that it surely makes sense to digest the outcome of that consultation—to get feedback from non-governmental organisations and other groups that have the detailed first-hand knowledge as to what changes we need—before making any radical changes.
There is a concern, as we heard from the hon. Gentleman, that there has not been a full and proper impact assessment on the proposed changes. It has been suggested that the impact assessments published with the original Welfare Reform and Work Bill may fall short of the Government’s statutory obligation to properly analyse policy, according to the Equality and Human Rights Commission. In its report, “MS: Enough—Make welfare make sense” the MS Society has recommended that the Government undertake a full impact assessment of any changes they make to disability benefits.
There is also a concern that what is emerging is a lottery, with some family types being more adversely affected than others. Research has highlighted that two thirds of single-parent families will be hit particularly hard by the work allowance cut and the delay to childcare support.
I move on to my second issue—support for vulnerable groups. Again, there is concern that particular groups are being unfairly hit, and I have in mind those with fluctuating conditions such as Parkinson’s and MS. There is also a worry that it has not been recognised that not every disabled person is able to work. The all-party group on multiple sclerosis, under the chairmanship of my hon. Friend the Member for North Dorset (Simon Hoare), has just published a report on support for people with MS in the workplace, and I urge the Government to take on board its three recommendations.
It must always be borne in mind that Parkinson’s and MS are degenerative conditions: people do not get better, there is no cure, and the severity of symptoms fluctuates not just from day to day but, very often, from hour to hour. The consultation on the work capability assessment is to be welcomed, but the feedback I receive, such as that from Waveney Suffolk Help in Multiple Sclerosis—an MS support group I will be with tomorrow—is that more needs to be done.
My third issue is the roll-out of universal credit. The full roll-out of universal credit went live in Waveney on 25 May. While I acknowledge the hard work of Jobcentre Plus and DWP staff on the ground, I have to report that it is not going well. Those in my constituency office are spending most of their days addressing very real problems that people face in having nothing to live on, nothing to pay for food, and no money to pay the rent. The DWP is being helpful in addressing these cases, but I have to question whether it is right to make further changes to universal credit at a time when there are major practical problems in its roll-out.
Heidi Allen (South Cambridgeshire) (Con)
Is the universal credit that my hon. Friend has in his constituency the full version or the initial straightforward version just for single claimants?
Peter Aldous
We have the full version being rolled out at the moment.
I am concerned about research showing that people in areas now on universal credit will, as a result of these changes, be significantly worse off than their neighbours and those in other regions who remain within the tax credit regime. Will the Minister address these concerns? Why should the people I represent in Waveney, and indeed those in other areas where universal credit has been rolled out, be unfairly treated in this way? It is a really unfair postcode lottery.
Justin Tomlinson (North Swindon) (Con)
There is also early evidence that those on universal credit are 13% more likely to go into work, and are getting in-work support to help them progress. They will often enter low-paid work and continue to progress, so in some cases the lottery is very beneficial to my hon. Friend’s residents.
Peter Aldous
I thank my hon. Friend. We are yet to receive those benefits in my area, where universal credit was rolled out only on 25 May, but I am happy to look at that information.
The Government have the time to get this right. They should use the autumn statement to address these concerns, consider targeting support at those who need it most, and pause and consult. If they do those three things, they can get it right.
Ian Mearns (Gateshead) (Lab)
Thank you, Mr Speaker, for giving me the opportunity to speak on a matter that affects a large number of my constituents.
The latest employment figures show that unemployment in my constituency is twice the national average, but as we know, this forms only a small part of the problem. Both this Government and their predecessor have systematically targeted the most vulnerable in our society. Our welfare state has become a game of numbers and a debate about the bottom line, and once again Members of this House find themselves debating cuts to the incomes of those who can least afford it.
It is clear that for the vast majority of the 693 of my constituents claiming it, universal credit has been nothing short of a punitive disaster. As we sit here today, we all know of constituents across the country who struggle to choose between heating and eating, and where actually living takes second preference to just surviving. This Government’s answer to that is to take another £30 from those who most need it, many of whom suffer from often debilitating disabilities. If only Conservative Members had the same levels of compassion for those living on the breadline as they do for those whose wealth knows no bounds and for whom they strive to gain tax cuts.
Gateshead has rising unemployment and rising under-employment. A lot of my constituents who are lucky enough to be in work are often working many fewer hours than they would like to, with little or no job security. We all have constituents who are living in the most terrible circumstances. My office deals daily with individuals who are suffering at the hands of a Victorian regime of sanctions and bureaucracy, dreadful administration and, I am afraid, Kafkaesque hoops through which they are expected to jump in order to claim their entitlements.
I would like to focus on one individual who really highlights the extent to which the safety net of social security has become a trap. Simon Westlake is a young lad who, because of family issues, moved to Gateshead from London, not very far from this place. He had a job working at a local supermarket, paying his way, renting a flat in Gateshead and contributing to the local community. Unfortunately, he was made redundant in February 2016.
Universal credit has been operating in Gateshead for about 18 months, so Simon reported to the local jobcentre—which has since been closed by the DWP despite an increase in those needing to use its services—to apply for universal credit. In total, Simon made nearly 10 applications, week after week, on the computers in the jobcentre, each time hoping that he would receive enough money to enable him to feed himself.
Seven weeks passed and still nothing, so Simon returned to the jobcentre, where an adviser watched him go through the online application and saw that nothing happened: no error message, no refusal, but more importantly, no claim lodged with the DWP. This lady kindly wrote a supporting letter for Simon, stating what she had witnessed, and lodged his claim over the phone—something that is very rare for the ordinary constituent.
Simon began receiving universal credit in June 2016, nearly four months after his initial application. In the meantime he had been evicted from his flat, threatened with violence by the landlord due to unpaid rent, and pursued by various utility companies and the local authority for unpaid bills. Simon was living in temporary accommodation in Gateshead, and I am afraid to say that, for a period, he was sleeping wrapped in a curtain and only able to feed himself by warming tins of soup with a tealight.
We in this House are often accused of being out of touch and living in a political bubble, but Conservative Members often do not seem interested. There are constituents in the same predicament as Simon in all our constituencies, and they need help urgently.
Simon contacted my office because the DWP had refused to backdate his universal credit to the date in February when he first applied. Despite my personal intervention, the DWP required evidence from Simon that he was in the jobcentre making online claims when he claimed to have done so. The only problem was that that jobcentre had been closed. He did not know where the staff were. He could not prove to the DWP, and the DWP could not explain to him how he was meant to prove, that he had been there in a now closed jobcentre. This would be an absolute scandal in itself, but Simon is not alone.
My question is this: how can Conservative Members vote for further cuts to a system that is already leaving our constituents living in absolute poverty, utterly destitute? Welfare recipients and would-be recipients in this country are already shouldering a very great burden—much greater than many of them can handle. They are citizens but now dismissed as claimants representing a financial cost to a Government who regard them as numbers. The media continue, in a mythological way, to purport that they are all fraudulent claimants, while we leave people who have had a tough break in life, or are suffering from terrible illness, in crisis. This is not right. These further cuts are nothing more than a penalty for becoming ill or losing one’s job.
We live in 2016. We are paid well to serve our constituents. I do not know how Conservative Members can put their constituents through the torment of further cuts in the name of unnecessary levels of austerity. I am sure that all Opposition Members can relate to Simon. For the sake of his story alone, these cuts must be opposed.
Jeremy Lefroy (Stafford) (Con)
I pay tribute to the hon. Member for Airdrie and Shotts (Neil Gray) for introducing this debate and for assembling here a large number of right hon. and hon. Members.
My father became disabled when I was two weeks old, when he was 34. He worked for the rest of his working life until he was 65. It was only after he died that I found that at one point he had had to consider emigrating to Australia in order to get work, but thanks to the foresightedness of a church in Highbury in Islington—he was a vicar—he was able to work in the United Kingdom. Throughout my childhood, as we were growing up, we saw the gradual improvement of the situation for disabled people in this country. I pay tribute to Governments of all colours over the past 50 years for that, because it has been incredibly important. I saw, for instance, the significant improvement that Motability made to his life and his ability to do his work—he benefited from the scheme from its introduction. That is why I believe that the motion should be supported and that the cuts to the work-related component in both ESA and universal credit should be paused and reconsidered.
The Government’s argument, which I understand, is that they wish everybody in the work-related activity group to return to work as soon as possible, and they intend to put in money to support and assist them in that process. Three assumptions underline that argument. The first is that the cost of living for those on ESA is pretty much the same as that for those on jobseeker’s allowance; in other words, it covers basic living costs. The second assumption is that any additional costs relating to sickness or disability can be covered by the personal independence payment. The third is that people will not receive ESA for very long, because they will get back into work.
On the face of it, one can assume that those assumptions are well meaning, but I would challenge all three of them. On the cost of living, those in the WRAG tend to have mental health conditions, cancer or musculoskeletal conditions, and they are often housebound for long periods. That means that they face an additional cost for heating, because they are not able to go out searching for work all the time. Macmillan says that 28% of cancer sufferers say that they cannot keep their homes adequately warm. They also face an additional cost for food: some of the diets involved are expensive and there is no particular help available. There is also the cost of transport, as people go frequently to hospital and doctors’ appointments.
The argument has been put to me that those costs could be covered by PIP, but fewer than half of those in the WRAG are eligible for and claim PIP. In any case, PIP covers mobility and care costs; it does not cover heating or dietary costs.
The final assumption, which is understandable, is that those in the WRAG will be able to return to work relatively soon, but that is not borne out by the facts. People tend to be in the WRAG for an average of two years, while the figure for JSA is six months. JSA is set at a level that assumes that people will be on it for only a few months, and it is very difficult to see how people can continue at that level without in the end getting into considerable debt. It seems to me that the assumptions, understandably made by the Government, do not hold up.
Stephen Timms
The hon. Gentleman will recall the commitment that was made to increase support for disabled people to get into work as a quid pro quo for the benefit cut. Does he agree, however, that it appears that the Government now propose to spend less on employment support for disabled people than has been spent on the failed Work programme? Surely they should be spending more, not less.
Jeremy Lefroy
I am not clear on the figures, but what I do know is that the Government are committed to providing support to people to get into work. That is absolutely vital, but I do not think it is a substitute for the additional financial help that has been given until now.
I welcome the Green Paper and the Government’s work on it. I welcome the work that my hon. Friend the Member for North Swindon (Justin Tomlinson) did on it, and the work of my hon. Friend the Minister for Disabled People, Health and Work, who is in her place, and everyone else at the Department for Work and Pensions. The excellent paper covers joint supporting, the promotion of mental and physical health, and occupational health support. I want all those things to be put in place, because I know that they will be of great benefit to many of my constituents. The Green Paper does not, however, cover the question of costs, and that is why I support the motion.
I want to make some constructive proposals for the Government to consider. I want them to consider modifying or postponing the changes while the proposals are consulted on and put into practice. Let us see them work: let us see people get into work more quickly before we actually remove the additional support. Let us also consider maintaining an element of support above JSA, specifically to cover the particular costs that people face, especially if they have been on the standard rate of ESA, as they will have been for a short period. It should not be indeterminate and indefinite. A discretionary fund has been used in other areas, so let us consider introducing one that is substantial enough to cover those additional costs for people in the WRAG.
I know that the Minister is listening. She has shown that in her responses to me both privately and publicly. I urge her to continue to listen, particularly to the points made by Members in this debate.
Anne McLaughlin (Glasgow North East) (SNP)
As there is a real chance of Members from all parties reaching agreement today, I will resist the temptation to talk about what I would usually talk about, which is the political ideology behind cuts to the welfare system. Instead, I will concentrate on the unfair implementation of the cuts and the counterproductiveness of removing £29 a week from people in the work-related activity group of employment and support allowance.
Let us remember that many people who are in receipt of ESA are currently unable to work because of poor health—“unable” being the operative word. Although it can be extremely difficult for jobseekers to find jobs, it is more than just difficult—it is often impossible—for those in the WRAG to do so; otherwise, they would not be in the WRAG. They therefore have fewer opportunities to improve their financial situation than someone who is able to actively seek employment. They do not have that potential light at the end of the tunnel. At the very least, their tunnel is a lot longer, because, as has been said, those on ESA tend to be on it for longer than those on JSA. For those on JSA, 60% are off it within six months, whereas the average figure for those on ESA is two to two and half years.
The sum of £73 a week is a shockingly small amount of money for anyone to have to live on. I am sure that we can all agree on that. It is a pittance, but having to live on a pittance for about six months is an entirely different proposition from having to survive on it for about two and a half years. People need the additional £29 a week simply because they have almost no prospect of any increase in their income and there is not an awful lot they can do about it.
The situation is not just unfair; it is also counter-productive. The Government say—in the spirit of consensual politics, I am willing to take them at their word—that the reason they are taking the money away is that people will be more likely to move from the WRAG into employment more quickly. The charity Scope argues that taking the money away will, in fact, take them further from the workplace, and I completely agree.
Being poor is a very time-consuming way of existing. It is a constant juggling act and a battle to stay afloat, and it takes up a lot of emotional and physical energy. For someone in the WRAG who has a disability, whether it is physical or psychological, to have to use up what little energy they have left trying not to go under financially when they are living, long term, on just £73 a week leaves them with very little energy to get well and to get the support they need to get back into the job market. Neither is it difficult to imagine the impact on the self-esteem of the dramatically increasing number—at the moment it stands at 49%—of people on ESA because of mental health problems.
To believe that keeping people on the very lowest income, rather than giving them the additional £29 a week, will help get them off the sick and into work is to believe that people are making themselves ill or swinging the lead in order to access that extra £29 a week. Do we have such little faith in people that we honestly believe that great swathes of those currently in the WRAG would not give anything to be well, to be working and to be able to play a full part in society, and to not be looked down on by others, as is often the case?
That is not what I see, and I represent one of the most deprived constituencies in the UK. I see incredible people in Milton and Ruchazie and in Blackhill and Royston—right across Glasgow North East—who, even when they have next to nothing themselves, keep giving to and sharing with others in their communities, because they are good people in an area with very high levels of health-related unemployment.
Davy in Possilpark has a disability. He walks with a stick, sometimes struggles to breathe and is in the WRAG. But when he is up to it, he spends his time voluntarily helping very many other people in his community. He could not possibly have a job right now, as he is just not well enough often enough, but he can sit down with others, for example, in the local men’s support group that he is a member of, to just listen and advise. He does that as often as he can. Davy told me that despite having that extra £29 a week he feels like a failure, because he still cannot afford to buy his granddaughter a decent Christmas present. That man is no failure, but does anybody here seriously believe that Davy likes feeling like a failure and that he would not give anything to replace his life with the one he once had, when he had his health and his job, and he was earning enough money to buy that wee girl a present that would have made her eyes light up? Does anybody honestly believe that his precious granddaughter is not motivation enough to get well and back into work?
My concern is that although every Member in here may well be thinking that they can empathise with Davy, some may also be thinking, “ It is not the Davys from Possilpark of the world we’re trying to sort out here, it’s the others.” I am anything but naive, and I can tell Members that Davy may be an exceptional man, and he is, but he is no exception to the rule. Those “others”, like Davy, would also rather be working, and an extra £29 a week will not stop them doing it, when they are able to. Removing that £29 a week will, however, make getting well and getting into the workforce much, much harder, and I appeal to the Government to please think again.
Justin Tomlinson (North Swindon) (Con)
It is a pleasure to speak in this debate, although I have a feeling of déjà vu, as I was talking about this subject only yesterday—no wonder “Groundhog Day” is one of my favourite films. I pay tribute to the hon. Member for Airdrie and Shotts (Neil Gray) for his proactive work in this area. When I was a Minister, I enjoyed engaging with him on a number of occasions. He always brought forward real experience and practical suggestions to challenge the Government and hold them to account in this important area. It is also good to see so many Members in the Chamber, on both sides of the House, to engage in this debate—it is a credit to them. That is important, because the Department has excellent Ministers who genuinely do listen, engage, act and influence the direction of policy.
I wish briefly to talk about the background to the current position. Yesterday I talked a lot about universal credit and less about the ESA WRAG, but today I will flip that around. The Government have introduced the national living wage, which has helped 2.75 million of our lowest earners, and we hope that it will rise to more than £9 an hour by 2020. We have increased the personal allowance from £6,495 to £11,000, taking the lowest 3.2 million earners out of paying any income tax. This country has the strongest economic growth of any developed economy, which is delivering record employment, with yesterday’s figures showing another 461,000 people entering work. We have also seen 590,000 more disabled people in work in the past three years—an increase of about 4%—although there is still much further to go.
Stephen Timms
I mentioned this yesterday, but let me remind the hon. Gentleman of the press release issued in his name by the Department for Work and Pensions on 29 June last year, which stated:
“The Government…aims to halve the gap between the disabled employment rate and the overall employment rate by 2020.”
Is he dismayed, as I am, that that commitment—he made the promise in good faith, I am sure—to a 2020 deadline has been abandoned by his successor?
Justin Tomlinson
I predicted that that intervention was coming, and it is an important point. The pledge was incredibly popular with stakeholders and focused officials’ minds. When I was a Minister, a lot of my work involved lobbying other Departments, so it was helpful when I was able to namecheck the then Prime Minister, as this was his personal pledge. I do not actually recall that press release, as my understanding was that we had not set the date because that was going to be determined in the Green Paper. Personally, I wanted to see significant progress year on year.
One problem with just adopting the approach in the pledge is that the number of disabled people in work could remain static yet in a recession the overall number of people in work could fall, meaning that the gap would close without any more disabled people benefiting. I wanted to set a target such as having 1 million more people in work by a certain date, which would mean that we would know that 1 million more disabled people had benefited. We were due to consult on that as part of the Green Paper process when I was in my ministerial role.
Kate Green (Stretford and Urmston) (Lab)
I agree with the hon. Gentleman that a single target can be a crude measure, so would it not have been sensible to have had two targets: to halve the disability employment gap by 2020, as the Department appeared to be committed to doing last year; and a numerical target? Does he think the new ministerial team might consider that suggestion?
Justin Tomlinson
I think that is twice as good as the current plans—it is a brilliant suggestion. All these targets focus minds, and this one made a difference in terms of pushing. That was a lot of what we had to do. We did not necessarily have all the levers ourselves, so having that target to focus minds makes a significant difference.
Wages have increased by 2.3% this year against the backdrop of an inflation rate of 0.9%—that fell again this week, helping people. We have also extended childcare. Let me briefly talk about universal credit, which will make a significant difference.
George Kerevan (East Lothian) (SNP)
When the hon. Gentleman talks about rising incomes and wages, the implication is that more people in work will benefit, but as a result of the collapse in the value of sterling, the Bank of England predicts a 10% fall in real incomes over the next three years.
Justin Tomlinson
We are awash with predictions from experts, as we have been since the middle of the referendum campaign. So-called experts predicted that inflation would spike this week, but we saw it fall. We will see what happens. Good Governments keep a close eye on these things and act accordingly.
We are still some way away from the full roll-out of universal credit, but our aspiration and the difference that this will make for people are significant, because through universal credit people will have a named work coach. The hon. Members for Gateshead (Ian Mearns) and for Glasgow North East (Anne McLaughlin) highlighted some examples of people’s experiences, and we have all encountered difficult cases in which the system has failed. One key advantage of the full roll-out of universal credit is that every claimant will have a personal, named coach who will stay with them. The job of the coach is not only to help people to get into work, but to navigate all the challenges they face when dealing with complex benefits. If the system does not support claimants in the way it should, the coach will help them to address that. People will not have to rely on going to their Member of Parliament, councillors or local citizens advice bureau, and that will make a significant difference.
Ian Mearns
I understand the point that the hon. Gentleman makes, but my constituent was unable to get any backdating and was left destitute. The Department’s behaviour was outrageous, and I am sorry to say that all I can see is a cost-cutting exercise.
Justin Tomlinson
I do not recognise this as a cost-cutting exercise, but without knowing all the details, it is difficult to comment. I hope that the ministerial team will look at this, meet the hon. Gentleman and find out whether there are lessons to be learned.
These coaches will also signpost where training is available to enhance people’s hopes of getting into work or progressing in work. Obviously, the traditional job-searching work will be done and, for the first time, these coaches will also provide support for people as they go into work. A lot of people coming off benefits will go into relatively or very low-paid work and will not necessarily have the confidence or skills to push themselves forward to get roles with higher wages. For the first time, these coaches will keep in touch with those people and say, for example, “You have turned up for work for three months; why don’t you now try to go for a supervisor role or increase your hours?”
Crucially, for people with fluctuating health conditions the benefit is in real time, so if people can work fewer hours one week than another, they will have a minimum income. The process goes from there, so if they do more hours, the income increases. This system removes the 16-hour cliff edge that was preventing people from benefiting.
Today’s debate is predominantly about ESA WRAG. Before I comment about that, I pay tribute, as I did yesterday, to the fantastic work of the staff in jobcentres, support groups such the Shaw Trust and Pluss, and the many local charities and national charities that provide support. They do a huge amount of brilliant work and often go unrecognised. ESA has had so many reviews and changes, yet still only 1% of people come off the benefit every month. That cannot be described as doing anything other than failing the people who are on it. A number of speakers highlighted the fact that people are typically on ESA for two years, whereas someone on JSA would expect to get into work much sooner. Bizarrely, people on JSA, who are closer to the jobs market, would get 710 minutes of professional support, whereas those on ESA, who are recognised as further away from the jobs market, would get only 105 minutes of that support. Some of the changes that are being introduced will equalise the position. It is crucial that we identify what people can do, not what they cannot do.
We are all different, and we all have challenges in our lives. Some people have more challenges than others, but most have an opportunity with the right support. The Green Paper is welcome, because it highlights the significance of that “can do” approach. We have to offer personalised and tailored support to give everybody an opportunity. Crucially, the major charities, including Scope, Leonard Cheshire Disability, the Royal National Institute of Blind People, the National Autistic Society and Mencap, as well as many other charities, right down to the smaller ones, will be contributing to the development and delivery of this policy. They will make a big difference.
Heidi Allen
I agree that those charities are very welcoming of the new Green Paper, but does my hon. Friend agree that they are still consistent in saying with one voice that the cuts to the ESA WRAG are wrong, and that they are not replaced in the Green Paper?
Justin Tomlinson
When I was a Minister, I was challenged on a whole host of issues, and that is what the charities are there to do. I feel that the extra support makes this approach worthwhile because only 1% of people are coming off that benefit. When people on ESA are surveyed, and when we talk to them in our constituencies, we find that the overwhelming majority are desperate to be given an opportunity to work.
Justin Tomlinson
I am running out of time, so I will try to wrap up. I have only two minutes left.
The Green Paper includes proposals for more personalised and tailored support, as well as quicker assessments. That is particularly important because 50% of people on ESA have a mental health condition, but typically wait nine months for an assessment. The Green Paper will address that by making sure that people are assessed quickly and given support before they navigate often difficult personal challenges when they take the step back into work.
There will be a place on the work and health programme or Work Choice for those who wish to take it—it is a voluntary opportunity. There will be additional places on the very popular specialist employment support programme. There will be job clubs run by peers—people with disabilities who have gone through the system and overcome their fear at the thought of going back into the process. That is often a big fear for people who have been out of work for a long time. There will be 200 new community partners; again, this is about utilising disability expertise. There will be increased access to work for young people with mental health conditions. There are further opportunities through the Disability Confident campaign.
My personal favourite, which I continue to champion, is the small employer offer. Time and time again, employers say to us, “We have skills gaps and we are struggling to find people to fill these roles,” but they have never thought to take on somebody with a disability because they lack the confidence to do so and do not realise that a huge amount of support is provided to help people to come into the workplace. Businesses that take that step benefit, more often than not, and I say that as a former employer who employed disabled people and benefited from doing so. I hope that the current small employer pilot will be expanded and will become a nationwide offer. It is making a significant difference.
The Chancellor was right to increase significantly the funding for Access to Work. On the fit for work scheme, we need to ensure that we provide advice at the beginning of a potential problem for people in work, not just at four weeks, because it is so much easier to keep people in work with suitable support than it is to get them back into work after they have dropped out. We have a fantastic ministerial team who are engaging with charities, with all their experience and knowledge, and the Green Paper represents a real opportunity.
Kate Green (Stretford and Urmston) (Lab)
It is a pleasure to follow the hon. Member for North Swindon (Justin Tomlinson). I pay tribute to him for his work and the commitment that he showed when he was the Minister for Disabled People. I congratulate the hon. Member for Airdrie and Shotts (Neil Gray) and thank him for introducing the debate. I also thank the Backbench Business Committee and its Chair for making time for this debate.
I join colleagues in expressing our deep concern about these cuts, which are based on several misconceptions and the effect of which will be cruel and perverse. Everybody wants disabled people and those with long-term health problems who can work to do so, and to have the support to do so. Everyone agrees that those people face additional barriers and may need that additional help.
As we have heard, the Government have published a Green Paper that makes a number of welcome proposals for improving that support for disabled people. I welcome in particular the replacement of the disastrous Work programme with personalised, tailor-made support for disabled people. I welcome the introduction of specialist work coaches, who will support the disability employment advisers in jobcentres, but I regret the fact that the number of disability employment advisers was reduced under the coalition Government. I welcome, too, the introduction of the health and work conversations, although it is a pity that they had to come in several years after the coalition Government prematurely scrapped Labour’s work-focused health-related assessments.
All those additional measures of support are proposed in the Green Paper, but it is none the less surely perverse to cut benefits for disabled people before the support is in place. There is no evidence at all that cutting financial support makes people more likely to move into work. Indeed, investigation by our colleagues in the House of Lords, Lord Low and the Baronesses Meacher and Grey-Thompson, has shown that the opposite is the case. They point out that it becomes more difficult when financial resources are reduced for disabled people to afford training and to undertake volunteering opportunities or work experience that could help them to move towards work. The Centre for Regional Economic and Social Research in 2011 confirmed that cutting benefit for those who are unable to work because of illness does not result in more people moving towards work because it does not address the barriers they face—their health, employer attitudes, availability of suitable jobs, lack of reasonable adjustments or skills gaps—which the Government’s Green Paper acknowledges and seeks to address.
Ministers have said, particularly during proceedings last year on the Welfare Reform and Work Act 2016, that an additional £30 a week of benefit disincentivises disabled people from working. There is no evidence at all for that. Indeed, as the hon. Member for Airdrie and Shotts pointed out, removing the £30 of additional support creates perverse incentives. If someone leaves the ESA to try to find work and they find that it does not work for them, after April 2017, when they reapply for benefit, they will be treated as a new claimant. They will not be able to retain the protection of the additional £30, which existing claimants will retain. Other people are likely to move from the ESA WRAG into the support group, where they will not be expected to look for work at all.
The proposals fail to recognise the nature and purpose of ESA for those in the WRAG. It is an income replacement benefit, in recognition of the fact that those in the WRAG have undergone a work capability assessment that has found that they are currently not fit for work. Employers, in many cases, would not have them in the workplace. Those employers would say that it was not safe to do so. In such circumstances, by definition, an individual cannot derive income from earnings, hence the need for the income replacement benefit. As we have heard several times this afternoon, because of the longer journey to return to work that people with disabilities and health conditions experience, there is a need for additional financial support and a higher rate of benefit.
I would like to say little bit about the support in universal credit for those with limited capability for work. Those people are set to lose out even if they are in work. At the moment, the limited capability for work element and the additional support through the disabled person’s work allowance in universal credit are roughly comparable to the support in tax credits for disabled people working 16 hours a week. If those in work on universal credit lose additional support, they will be substantially worse off than those on tax credits. That is surely a perverse outcome of these cuts that Ministers will want to address.
All such perverse outcomes might have been avoided and the policy improved if an equalities impact assessment had been properly carried out at the time of parliamentary proceedings on the legislation. As we have heard, the Equality and Human Rights Commission offered help with such an assessment and set out a methodology for carrying it out. Regrettably, that suggestion was rejected by the then Government.
Heidi Allen
Did the EHRC not offer to do that assessment for free? I seem to remember that it did, such was its wish to contribute.
Kate Green
I do not know whether the EHRC offered to do the assessment at no cost, but it certainly set out a substantial and detailed methodology by which the assessment could be carried out. Further, when the Government produced their own rather thin analysis, the EHRC was very clear that it was unsupported by evidence and that it was insufficient.
We now have the Green Paper, which has some welcome proposals and a welcome ambition to halve the disability employment gap, although as my right hon. Friend the Member for East Ham (Stephen Timms) pointed out, we do not know when that goal is to be reached. I hope that the Minister will consider the suggestion, which I think the hon. Member for North Swindon supports, that we should consider more than one measure of success in assessing disability employment.
I must tell the Minister that, for all the good in the Green Paper, her proposals will be seriously undermined if she proceeds with the current cut before the proposals have had a chance to take effect. There is no justification for making sick and disabled people poorer. It will not help them to recover, and it will not help them to find work. Disability charities, Opposition MPs and, indeed, MPs from the Minister’s own party have all expressed their deep disquiet about the proposals. It is not too late to think again, to call a pause on this cut and to ensure that disabled people receive the financial support to enable them both to maintain a decent standard and quality of living and, where they can, to have the wherewithal to look for work, prepare for work and take the steps on the journey back to work that so many of them are desperate to make.
Heidi Allen (South Cambridgeshire) (Con)
As all speakers have done so far today, I thank the hon. Member for Airdrie and Shotts (Neil Gray) for bringing this debate to the House. I am glad that Members on both sides of the House are contributing to this debate, which is such an important one.
When I look back at my first year as an MP, I cannot think of a vote that has been so regretted by my colleagues on the Government Benches. I remember the pressure we all felt at the end of February, when the ESA WRAG element of welfare reform was being batted between this House and the Lords. I remember the feeling of desperation when this House sent it back. I abstained in the vote as a plea to the Government to rethink their decision, knowing the Lords would have one more opportunity to convince the Government, too. The Lords stuck to its guns and sent it back one more time, and I remember the relief when it did.
As a new MP, I was still trying to understand how the relationship between the two Houses worked, but I was exhilarated that the House of Lords was willing us on and watching and nudging us like a parent, hoping we would finally do the right thing. However, that sense of optimism was short-lived, as we failed in this House on the Bill’s final return. So few of us on the Government side voted with the Lords on its amendment, because many believed a White Paper was imminent and would describe what alternative support would be made available, and there was a promise of some £l00 million. However, the White Paper never came and the money never came, and I know that some of my colleagues have regretted their vote ever since.
Dr Tania Mathias (Twickenham) (Con)
My hon. Friend is making some very important points. Does she agree that Members who supported, as I did, the Government changes to the ESA in March did so on the absolute understanding that there would, in parallel, be appropriate support for people getting into work? Although the Green Paper is laudable, it will not be implemented in time, and therefore the ESA changes have to be delayed.
Heidi Allen
Absolutely. I could not have put it more succinctly myself. It was because of that promise and guarantee that Members opted to support the Government, but, unfortunately, that has not yet been fulfilled.
Most heartbreakingly of all, the Lords was not asking for much. It was not so naive as not to accept that the ESA system needed reform, as it so clearly does. The announcement from our new Secretary of State that the whole work capability assessment process will be reviewed is very welcome. I sense this is a precious opportunity, and our disability charities, which have been invited to do so, are poised and eager to contribute to the review. I know that we will do better. I am confident that my Government will do better. The Green Paper is the first step in this process, and charities have welcomed it. With charities, as well as organisations such the Conservative Disability Group, for which I am the parliamentary link, the expertise exists to help us. I am so encouraged by the opportunities that lie ahead, and I sense transformation is possible.
However, my discomfort—this was expressed by the Lords when we last debated this issue—is about having agreed the proposals for new support before we took away the extra £30 per week for those in the ESA WRAG, individuals recovering from significant illness who are slowly transitioning to work. The Government’s argument was that the WRAG support was not doing its job, with individuals sometimes on it for up to two years. The Government concluded there was some perverse financial incentive for people to stay in that group. I say now, as I said at the time, that the fact that people are stuck in the group says more about the failure of DWP processes than about claimants’ active choices. People in that group do not have an easy time. They must demonstrate an appetite to transition towards work, and they can be sanctioned if they do not do so. I still maintain that anyone who has beaten a significant illness is desperate to get back to normal and to get their life back.
The Lords back in February and March, many of us in this House then and many of us today are just asking for a pause. What harm could it possibly do to the Government’s plans or reputation if we were to pause these cuts until an alternative support plan was agreed? Moreover, I passionately believe that it is the sensible and moral thing to do. Would we still be having this debate, would it still be the first thing on the lips of every health and disability charity and would MPs still talk of their regret if we had made the right decision last time around?
I have a guiding principle in life: we should always listen to the loudest voice in our head. We may choose to ignore it, or try and drown it out with distractions and alternative arguments, but we know it is there. In fact, we can sometimes see it when we look in the mirror. I think that we all know what that voice is saying: let us just pause these cuts. The £30—I repeat, £30—represents 29% of the weekly income of some 500,000 people, which is big money for relatively few people. Let us just pause. The risk of damage is high, and the financial cost of pausing is low.
What kind of Government do we want to be? If we want to be a unity Government, rallying and rejoining the nation after the splits caused by Brexit, how will we explain such a vision to two cancer sufferers—I picture them sitting side by side in hospital to have chemotherapy —who are receiving different levels of welfare support, because one was a claimant pre-April 2017 and one became a claimant just afterwards? If we are saying that we will continue to make the payment to those already on it, that must mean we acknowledge that the benefit has some value.
The Green Paper talks about the flexible support fund, which is promising, but it is only £15 million for 2017-18 and 2018-19. The Green Paper suggests that it could be used to buy mentoring or additional support, so could some of it be used to give direct financial support to claimants as well? If ESA WRAG is not the answer, perhaps a boosted support fund, consistently applied by well-trained jobcentre work coaches to provide additional financial support where needed, could be an acceptable alternative. I am open to such a suggestion, and I suspect my colleagues the Opposition Benches would be, too.
If we get the work allowance rates in universal credit right, we could support those transitioning back to work in that way, rather than their facing a cliff edge of having the £30 withdrawn the moment they enter work. That scenario would most definitely keep people away from the workplace, as they would be worried about losing money if they suffered a temporary, but debilitating, health relapse. As I keep saying, the work allowances in universal credit hold the key: because we can set them individually for every type of claimant, universal credit could offer the ultimate flexibility for the disabled and those recovering from poor health. It would offer them reactive, flexible and unwavering support on their entire journey in and out of work. However, for this group of vulnerable claimants, the work allowances need to be higher.
Whether it is a bigger flexible support fund or work allowances in universal credit set at the right level specifically to help those with disabilities or long-term health conditions, let us talk about these options and see whether they hold the answer. We are so close now. With the Green Paper, a new Secretary of State, a new Prime Minister and a new Government, we have a priceless opportunity to build a system that supports and realises the aspirations of people with disabilities and health conditions. That is clearly this Government’s proud and right mission, so let us not waste it by retrospectively fitting policies to savings targets that were agreed in a completely different era.
Mark Durkan (Foyle) (SDLP)
Like other hon. Members, I commend the hon. Member for Airdrie and Shotts (Neil Gray) for introducing the debate in the terms he did, and I commend other hon. Members for the way in which they have addressed the issues. Hon. Members have rightly reflected on what the impact will be on a range of their constituents. They have reflected on the questions they have received from a number of policy groups that campaign on behalf of people with disabilities and people with variable conditions. These changes will have a huge and grave impact on those people.
Whenever the Welfare Reform and Work Bill was discussed on its way through the House, several of us, on both sides of the House, specifically opposed clauses 13 and 14 in the original Bill—we are addressing those clauses, particularly clause 13, today—and I pay tribute to those Conservative Back Benchers who expressed concerns and misgivings at the time; some even voted accordingly.
We need to remember that what drove all that was the welfare cap. It was a bit of a flagship for the Government in the last Parliament, but ended up becoming the search engine for more and more cuts. That was recognised even by the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith). He was almost grinning like a horse chewing thistles when the measures were first brought forward—there could not be enough of them—but then even he began to see that the way in which the welfare cap had become a search engine for the Treasury to find more and more cuts was doing harm and injury to his conception of universal credit, not least in terms of the very measures addressed in the motion of the hon. Member for Airdrie and Shotts.
Today is our opportunity, ahead of the autumn statement next week, to lay down a marker and say that, given all the developments and circumstances, perhaps we should pause and think whether we have to follow through with this cut. The Government rightly stopped on the tax credits changes, and hon. Members on both sides of the House were rightly seized of the problems connected to those changes. What we are debating today is the longer-term effect—the sting in the tail of those proposals. These longer-term measures are the after-effects that result from that same mind set.
We have a new range of Ministers in different Departments, including the Treasury. They have seen fit to say that they are not bound by the constraints of previous pronouncements, nor even by the terms of previous legislation passed by the same Government. I ask them to find some time and space on these issues.
I hope that at no point will Ministers use the specious argument that they have committed to these changes, have framed them and are bound by them. In particular, I do not ever want to hear Ministers say that one reason why they have to stay on this course is that, unfortunately, there was a legislative consent motion in the Northern Ireland Assembly specifically endorsing the clauses of the Bill that brought the changes in. That legislative consent motion was passed in the Assembly at the hands of Sinn Féin and the Democratic Unionist party as a way of handing direct rule powers back to Westminster—supposedly temporarily—on welfare reform. It dealt not just with the Northern Ireland (Welfare Reform) Act 2015, but referred to the clauses of the Welfare Reform and Work Bill as originally tabled in Westminster. This is our chance to make it clear to the Government that they are not bound by those clauses as originally tabled or passed, but can and should find a new way. I hope that the Government will do that.
I have heard the Minister for Disabled People, Health and Work at different events in Parliament speak directly to activist groups and patient groups, and people with disabilities. She has spoken with some heart and sincerity about her hopes for what will come from the Green Paper. Many people have engaged positively with that, as we have heard from Members on both sides of this House. No one is decrying the potential of the Green Paper. But it will mean nothing if we do not put a brake on the cuts that are to come in next year. We cannot pretend that the tyre is only flat at the bottom and say that people will be taking a hit now but good things will come again eventually.
People cannot understand why they have to bear the burden of the cuts now. The Chancellor is now saying that he will not promise to deliver on expenditure and deficit levels on the same terms as his predecessor, and people are hearing understandable questions about quantitative easing. If that is the climate now, and given the scale of quantitative easing that has taken place, people cannot understand why the punitive squeezing has to be of those who will bear the brunt of these cuts—the people for whom other hon. Members have spoken so well and so strongly today.
I hope that the Minister listens to the strength of opinion across the House. I hope she listens to her colleagues, here in the Chamber and in the corridors outside and in other meetings. They are saying that we can find a better way on this and should alter course. We are better than this, we can do better than this and the people we represent need better than this.
Mr David Burrowes (Enfield, Southgate) (Con)
It is a pleasure to take part in this debate. I have signed the motion, which represents a cross-party concern and call to the Government. I very much commend the hon. Member for Airdrie and Shotts (Neil Gray) not only for securing the debate but for his constructive tone. Some restraint was shown by the Scottish National party in avoiding what the hon. Member for Gateshead (Ian Mearns), who is no longer in place, sadly lapsed into, namely seeking to politicise an issue about which there is cross-party concern. When we deal with welfare there is a sad tendency to get into a narrative—one that I wholly reject—about Conservatives not caring for the vulnerable with their austerity cuts. On the right, we then get the narrative that this is all about the workshy. I reject both narratives, which, sadly, can end up weaponising welfare.
Today’s debate is constructive. Reference has been made to bravery on the Conservative side. Frankly, it is not particularly brave to support this motion. But this is not a binary issue. I support the bravery shown by my hon. Friend the Member for North Swindon (Justin Tomlinson) when a Minister, and that of my right hon. Friend the Member for Chingford and Woodford Green (Mr Duncan Smith) as well. It takes a lot of bravery to reform disability welfare, which had been unreformed for too long. There is bravery on the ministerial Bench as well—it would have been easier not to go down this route. But there was nothing brave about a status quo that left only 1% of the group affected able to get into work.
The people who are really brave are those trying to make ends meet. As we know, people who are disabled have disproportionately higher costs than others. They are trying to travel, or to deal with energy costs. They are trying to do what they all want to do—to get better and get into work. Through no fault of their own, some of them are not able to do so. They are brave. They are the people we care about, and we need to do more for them.
Politics at the moment is a topsy-turvy world. Some may say that it is topsy-turvy for me to be involved in a motion that is predominantly supported by SNP Members; nevertheless, the motion is cross-party. It is a topsy-turvy motion, to the extent that it was drafted before the Green Paper was published. In essence, the issue is topsy-turvy, as has been mentioned, because it would have made so much more sense to have a White Paper before the decision was made on this cut, so that we could see the direction of travel and see what the parallel track of financial and practical support for these claimants would be.
Still, here we are. Some might say that I am being somewhat topsy-turvy in my position on this issue. I voted for the cuts in February. I stand by that vote, and maintain that we can look to a better reformed system. But as I said at the time—and many hon. Friends held the same position:
“I recognise that the WRAG is not fit for purpose, as only 1% are getting into work, but it does have a purpose. It has a purpose for the most vulnerable individuals, for whom the financial element of £30 really matters...As we move towards 2017, with the flow of new applicants, we must do all we can to reassure everyone that we are in the business of reform…I will support the Government tonight, but we must get the White Paper out and show our practical support in meaningful ways before 2017.”—[Official Report, 23 February 2016; Vol. 606, c. 235.]
Today’s motion is about making sure we deliver on that. A considerable number of hon. Friends gave conditional support because we want to ensure that we deliver for those claimants.
I recognise that there has been good progress. The latest employment stats, as has been mentioned, show that 590,000 disabled people are in work. That is much better than three years ago, with an increase of some 4%. However, that still constitutes a scandal of five in 10 disabled people in employment compared with eight in 10 non-disabled people. We must do so much more. Recent announcements from Ministers have been encouraging, not least that yesterday on homeless people and people with mental health illness facing sanctions. The Secretary of State said:
“We want our jobseekers to focus on getting into work and enjoying the dignity and security of a good job.”
Those fine words also need to be applied properly to WRAG claimants. We need to realise the vision in the Green Paper of a new era of joint working between the welfare and health systems. By April, that long-term vision must be a reality for this group of people. It is important and encouraging to provide coaches, the Access to Work and Fit for Work schemes, and personalised integrated support. The Disability Confident scheme is also important, as is removing prejudice where some look to difference and otherness rather than positive diversity. All of that comes together, but we need to do something about the £30. Perhaps one way to deal with it is to look at the flexible support fund as a way of bridging the gap.
We must ensure that, as we move into 2017, financial and practical support is available. The 2013 incarnation of the support fund managed only to assist people with getting job interviews. It must be about much more than that. I want to hear from the Minister that this will be a much more integrated package, which incorporates the vision in the Green Paper. Let us grasp that vision and ensure it becomes a reality. Let us make sure there is local discretion on disability that pulls together practical health and welfare needs, not just a one-size-fits-all approach. The words in the Green Paper need to become a reality for the new WRAG claimants.
I appreciate that the Green Paper has far wider aims, aspirations and objectives. Those of us on the Conservative Benches—we have a good track record, which we can be proud of; we spend more than Labour did when it was in office and will continue to do so, despite the cuts for this group of people—must accept that there is a credibility and confidence gap on how we support the most vulnerable and disabled. We must not lose on this, but recognise that the great approach in the Green Paper can be realised by showing real practical support, particularly as we get to April. The new WRAG claimants will still need that £30 support for travel, heating and so on.
I believe that, as we approach April, the way in which we show our support and care for the vulnerable and disabled is a litmus test for the Green Paper. I look forward to hearing from the Minister today. I will be working with Ministers on how we can ensure practical, integrated support to meet that test and to deliver for this group of people.
Tommy Sheppard (Edinburgh East) (SNP)
We are discussing whether the state can afford to give less than 1% of its citizens, who have been assessed as unfit to work through illness or disability, £30 a week to help them to get through their lives. In one sense, it is a remarkably small amount of money, yet for the people involved it is really quite major. In some cases, it makes a difference of up to a third of the money they subsist on over the course of a week.
I want to deal first with the question introduced by the architects of the policy. It was put about that somehow the existence of more money on employment and support allowance would create a disincentive for the people in that category to seek employment, compared with those on jobseeker’s allowance. It was thought that this extra payment would somehow create a disincentive to their search for work. That argument is possible only if we assume that the needs of people claiming ESA are no different from and no greater than those who claim JSA. I hope that by now the Government are persuaded by the testimony, given by many Members from across the House about individual constituents in this situation, that that is not the case. People on ESA have greater needs and that is why the additional payment is justified.
We know that many people who claim ESA are isolated and vulnerable. Many are temporarily housebound. They spend much more time at home than their able-bodied peers, which means that their household bills are greater. We know that many people have a condition that may suddenly mean they have to get a taxi or may face some extra expense that other people do not face. We also know that some people are using this money to buy medical supplies not available on the NHS for their condition. The extra payment is there to assist people, to help them to cope with the conditions they suffer from while they try to get back into employment. The House really has to recognise that.
It is particularly iniquitous to have some people continue to claim £109 a week, while others in an identical situation who make a fresh claim will be paid less. How, as a matter of public policy, can we justify that? The Government suggest that this will affect only new claimants and that those already on the benefit need not be too concerned. In fact, the people already claiming the benefit are extremely concerned, because the nature of the benefit is such that we are talking about recurrent claims. People need the benefit for a period of time, after which they may have a period of employment before having to rely on the benefit again. Many such people suffer from mental illnesses, such as anxiety and depression. In that condition, I cannot think of anything worse than knowing that, were they to take a job offer that does not work out, when they ask the state for help again they will be offered £30 less than the amount they currently receive. That situation will exacerbate the mental illnesses that many people face.
I was impressed yesterday when the former Secretary of State, the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith), said that there is not a simple dichotomy of being either fit for work and not receiving benefit, or being unfit for work and receiving benefit. There are lots of shades of grey and nuances. If people are unable to work at all and are in need of permanent support, they are transferred to a support group. The WRAG claimants are trying to get back into the job market. The support they receive is to enable them to get back into employment. Far from incentivising people, I fear that if this cut goes ahead it will drive many people into deeper despair and greater isolation, and make it less likely that they will be able to enter the jobs market. For that reason, I ask the Government to think again.
The Minister is listening intently and I appreciate that. I ask the Government to consider the character of this debate: the language being used and how the arguments are being presented. It is the job of the Government to govern and make decisions, and it is the job of the Opposition to attack those decisions. Such is the rough and tumble of politics. However, I ask the Government to note that in this instance that is not the nature of the debate. Members from across the House have come together to make a heartfelt plea for reconsideration of this particular policy. I am hopeful that we will get some movement. I do not accuse the Department for Work and Pensions of malicious intent towards disabled people. Tomorrow, I will be speaking at a DWP conference in Edinburgh at the Hibernian stadium, which will bring 100 local employers together to try to encourage them to take on people with disabilities and to explain the precise support the Government can give to them as employers. That is a good thing and I welcome the Green Paper, on which we can have a debate and consultation.
What sense does it make to pursue this cut now, introduce it in April and reduce the benefit for potentially 600,000 people, while considering how to improve the situation for the very same group of people? Surely the most sensible thing to do is to press the pause button and to put off any final decision on the level of support that claimants in this particular category receive until after April next year. There would then be the opportunity to look at the other means of support available, consider the consequences of the discussion on the Green Paper and then take a balanced decision. It seems to me that we actually jeopardise and hinder some of the potential improvements by making this cut now.
Somebody once said that when you’re in a hole, stop digging. I appeal to the Government to consider doing exactly that. I also appeal to them again to understand the nature and the tenor of the debate. People from across the House are coming together and trying to build a golden bridge over which the Government can retreat. I urge them to cross that bridge. I promise that if that happens, they will not find people on this side of the House condemning them for making a U-turn. Rather, we will salute them for doing the right thing.
Caroline Ansell (Eastbourne) (Con)
I congratulate the hon. Member for Airdrie and Shotts (Neil Gray) on securing this important debate, and I welcome its tone, not least because when this change was first proposed, there was such heat and rhetoric that I had to field very many calls from distressed constituents. One in particular stays with me to this day: a father concerned that he was about the lose the benefits associated with supporting his eight-year-old daughter. It is hugely important, therefore, when we speak about such changes, that we be mindful of the people who might be affected by it, so as not to cause undue distress.
This important debate is an opportunity for us to challenge the Government and raise concerns and for the Minister to offer reassurances, particularly on the position of existing claimants and those on reassessment and on the grace period extended to those who move into work. For them, it should not be game over; rather, their support should continue, or they might face too early a challenge. I hope to hear the Minister reassure people in receipt of that benefit.
I welcome the comments made by the hon. Member for Glasgow North East (Anne McLaughlin) about abandoning the ideology that has sadly underpinned this debate. It is not driven by ideology. As we have heard today, there are many Members on both sides of the House who have compassion and want the best for everyone in our country, whatever their position, background or—crucially—disability. As a Member of Parliament with disabled family members, I can say there is nothing more important to me.
Moving into the world of work is a hugely positive step for people, and it brings with it identity, purpose and connection, but when only 1% of claimants are doing so, we must recognise that the system has failed. Whatever the cause, whether it be the assessment or the fact that people should actually be in the support group, one in 100 is simply not good enough.
We need always to remember the bigger aspiration when we are talking about benefits and work. I share the concerns over the changes to ESA. We have heard many speeches from hon. Members expressing those concerns eloquently and movingly, and I would endorse the proposals from my hon. Friend the Member for Stafford (Jeremy Lefroy).
Work is a hugely positive thing, as has been recognised by Governments of all hues and colours, not least by the previous Labour Government in a DWP report that associated the renewal of work with positive mental health outcomes. I am a member of the all-party group on disability, which has an imminent report containing a host of recommendations not just about reforming support services to help people into work but about the need to reform our attitudes to disability in the workplace.
I welcome the Green Paper, especially for its engagement with disability charities. On the change to the WRAG, I have been contacted by many constituents who share the concerns expressed today, so I am looking forward to some reassurances, and, on the motion, I would support a pause in the implementation of these changes. Equally, however, I am pleased that the Government have already announced new schemes and initiatives, rather than waiting until 2017 to make those changes. I particularly welcome the abolition of the permitted work rules, which will allow ESA claimants to work more than 16 hours a week without the immediate cessation of ESA payments. What more perverse situation is there? The Government have recognised that and responded positively. Likewise, there is the additional funding for access to work, the work and health unit and the discretionary flexible support fund, which will help thousands more people with disabilities to move into work, or at least to begin that journey.
I also recognise, however, that there is far more to do than simply looking to central Government. The all-party group’s report makes several suggestions at a grass-roots level, such as ensuring that disabled entrepreneurs are integrated into local business networks, such as the Federation of Small Businesses and the chambers of commerce. We have an exceptionally active chamber in Eastbourne, and I look forward to discussing further with it what more can be done to enhance employment opportunities for people with disabilities in Eastbourne and Willingdon. Likewise, the BIG Futures event next year, aimed at school leavers, will for the first time have a strong Disability Confident element to it. That is change; that is progress, and I welcome that.
To close, all change is unsettling, but I am looking today for assurances, and I would encourage all those with strong views to contribute to the Green Paper, because we all want to see the right policies that support people with disabilities back into work and ensure that they can enjoy the same life opportunities.
Stephen Timms (East Ham) (Lab)
I am glad to be following the hon. Member for Eastbourne (Caroline Ansell). I agree with her and other Conservative Members that these cuts should at least be paused. On 27 January, Lord Freud said in the other place:
“we are proposing to recycle some of the money currently spent on cash payments…into practical support”.—[Official Report, House of Lords, 27 January 2016; Vol. 768, c. 1316.]
That was the deal offered to us—there would be a shift from cash payments to practical support. The hon. Member for Enfield, Southgate (Mr Burrowes) and others are absolutely right to point out that that practical support will not be in place by next April, so that is a good argument for pausing the cuts.
Not only will the support not be in place next April, but as far as I can see, the Government are not even planning to spend as much on their new programme for supporting ESA claimants into work as they are spending on the Work programme which, as we have heard, has done a hopeless job for people claiming ESA. I thought that the whole point of this benefit cut was to give additional resources to support those people into work, but it appears that the Government are now talking about spending less. The £60 million to £100 million we have heard about is not on top of what is currently being spent; it is instead of what is currently being spent, which seems completely contrary to what we have been assured throughout this process.
In 1998, when I held the Minister’s post, I was responsible for the new deal for disabled people. That was followed by the Pathways to Work programme. On 1 July, the House of Commons Library produced the briefing note “Key Statistics on People with Disabilities in Employment”. It helpfully shows, with a graph, that the disability employment gap fell steadily but substantially from 1998 to 2010. In 2010, the new deal was replaced by the Work programme, and the steady progress on reducing the disability employment gap came to a halt. As the Green Paper candidly acknowledges at paragraph 1.22, there has been no progress in reducing the disability employment gap since 2010. The progress we have heard about from some Conservative Members, particularly the hon. Member for North Swindon (Justin Tomlinson), has not involved any progress at all in reducing the disability employment gap, which reflects the fact that the Work programme has been so disappointing for this particular group.
I think that the Conservative party recognised that it had a problem, so its manifesto for 2015 to 2020 announced a bold target of halving the disability employment gap. Achieving that by 2020 would be ambitious, because progress would have more than caught up with the rate that was steadily delivered between 1998 and 2010. Ministers said that they would achieve that bold ambition by committing the proceeds of the benefit cut that we are debating today. They told us that the details would be set out in a White Paper.
As the former Secretary of State ruefully observed yesterday, there has still been no White Paper. When launching the Green Paper, the current Secretary of State made this astonishing claim:
“The original commitment in the manifesto did not have an end date”—[Official Report, 31 October 2016; Vol. 616, c. 678.]
If one reads a commitment or a promise in a manifesto for 2015 to 2020, one is entitled to believe that what it says will be achieved will actually be achieved by 2020. The commitment was more explicit than that, because during one of the televised election debates, David Cameron—some of us still remember him—said:
“The gap between the disabled unemployment rate and the unemployment rate for the whole country is still too big. I want to see that cut in half over the next five years.”
He was explicit about that. The press release issued by the hon. Member for North Swindon—he told us that he could not remember it—was also clear that this was going to be done by 2020. That was what everyone in the disability organisations understood.
A month or so ago, I attended the launch, which was hosted by the right hon. Member for Chesham and Amersham (Mrs Gillan), of the National Autistic Society document “The autism employment gap”. Let me read what it says:
“The UK Government has made a very welcome pledge to halve the disability employment gap by the end of this Parliament, meaning they have to shift the disability employment rate from 47% to 64%.”
Just last week, the all-party group on multiple sclerosis, which is chaired by the hon. Member for North Dorset (Simon Hoare), published the report “Employment that works”, which referred to
“a 2015 general election manifesto commitment by the Conservative Party to halve the disability employment gap by 2020”.
However, when I asked the new Secretary of State about the timing of the commitment, he replied to me on 31 October, when he launched the Green Paper, that it was “premature” to set a date for achieving this goal. At least the Minister for Disabled People, Health and Work in her winding-up speech in yesterday’s debate did not claim that there never was a 2020 target when there clearly was.
To resume progress on reducing the disability employment gap—that reduction was delivered consistently under the new deal from 1998 to 2010—the Government need to resource the process properly, as they promised to do earlier this year. The point of making this cut in ESA was supposed to be that the proceeds would be used for that purpose. The Government simply need to keep the promise that they made to disabled people.
When a clear promise has been made to disabled people, is it really too much to ask that it is delivered? The problem with the Green Paper is not that the ideas in it are bad, as I understand the U-turn of abandoning the Work programme, but while the Government promise to increase the number of disabled employment advisers, that is only back up to the number there were in 2013 —it is no more than that. A clear promise was made in the Conservative party manifesto. It was understood right across the disability organisations, so I ask the Minister to tell us that she is determined to keep it.
Patricia Gibson (North Ayrshire and Arran) (SNP)
I am delighted to speak in this debate, but regret—I think that we would all agree about this—that it is so necessary. I thank my hon. Friend the Member for Airdrie and Shotts (Neil Gray) for securing the debate.
As we have just heard, the previous Prime Minister, David Cameron, vowed to halve the disability employment gap. At the end of 2015, the employment rate among those living with a disability stood at 46.7% compared with 80.3% for people not living with a disability. According to the Work and Pensions Committee in March 2016, when it launched its inquiry into the previous Prime Minister’s commitment, halving that gap would require getting an additional 1.2 million disabled people into the workplace. However, plans to reduce the employment and support allowance work-related activity component and the corresponding limited capability for work component in universal credit in April 2017 appear to fly in the face of that worthy target set by the previous Prime Minister.
Justin Tomlinson
Does the hon. Lady welcome the fact that in the past three years alone, an extra 590,000 disabled people have gone into work? The employment rate for disabled people is now 48%, which is up 4% from when we first came to power?
Patricia Gibson
I welcome all progress in this area, but that does not detract from the commitment made by the previous Prime Minister, which I believe everyone would have supported. Progress is always to be welcomed, but we have not gone far enough and we should still work towards that commitment.
In practical terms, £30 each week will be cut from those with long-term health conditions or disabilities, and as we have repeatedly heard today, this will happen before the work and health programme Green Paper can be considered or implemented. The fact is that reducing sick and disabled people’s financial support to jobseekers’ levels is counter-productive since those in the ESA WRAG will have very low incomes for a long time, because disabled people are much more likely to be out of work for longer. It is extremely important that the Government proceed by using an evidence-based approach, instead of rushing into cuts that will have the opposite outcome from what they and everyone else want.
The Government say that they want to help disabled people into work, but under the limited capability for work element of universal credit, disabled people in work and those looking for work will be negatively affected. Those in work but on low pay will be particularly hard hit. How on earth can that be consistent with the aim of halving the disability employment gap? The truth is that helping disabled people into work means supporting them, and doing so effectively. The proposed measures will push them further and further away from the workplace. Scope claims that a loss of financial support for disabled people will have a detrimental impact on their health and wellbeing, pushing them further away from the workplace. It will also strip away necessary support from those already in work, making it harder for them to retain their place in the world of work.
Some 492,180 disabled people across the UK are reliant—I repeat the word “reliant”, because that is so important—on ESA WRAG. According to the third sector, these people will struggle to live independently and will be pushed further and further into isolation, poverty, hardship and debt. Research by Scope discovered that 49% of disabled people use credit cards or loans to pay for everyday essential items such as clothes or food.
We should spare a thought today for people who are living with conditions such as Parkinson’s. We know that those with fluctuating conditions are not well served when they are placed in the WRAG, because the work capability assessment does not and cannot accurately capture the reality of living with such a condition. That means that ESA claimants with Parkinson’s will be placed in the impossible and demoralising position of being told they are fit for work or should be getting back to work. They are often placed in the WRAG rather than the more appropriate support group.
Heidi Allen
Does the hon. Lady therefore welcome, as I do, the fact that the Government will take a completely fresh look at the whole way in which the work capability assessments are carried out, so that we can put people into the right support group—or not, as the case may be?
Patricia Gibson
If any part of the social security system needs a fresh look, that would be my first choice, although there is an embarrassment of riches to choose from. At present, people are not well served by work capability assessments.
We have heard protestations today and in the past that no one who is currently receiving ESA and no one with the most severe disabilities will be affected by the forthcoming changes, but they have been categorically refuted by organisations such as the Scottish Association for Mental Health, which has pointed out that those who are currently receiving ESA may well be affected by the changes if they have been claiming the benefit and move into work before they are well enough. They may also be affected if they need to seek support again. People are likely to be deterred from trying out new jobs if the possible outcome is reduced benefit after a short period of employment.
SAMH’s report also points out that 98% of its service users said that their mental health had suffered as a result of welfare reforms. People are already very frightened and worried. Ironically—I want Ministers to reflect on this, because we are trying to build consensus across the House today—the Government’s policies are literally making those who are coping with the daily challenges of a disability ill or, at best, less well. How can that make those in the group that is targeted by these measures more work-ready? In fact, such measures will prolong or exacerbate existing health conditions. Protecting the sick and disabled should be above budget savings. If it is not, what does that say about the kind of society that we are trying to create? What does it say about Government priorities?
I know that there is concern about this issue on both sides of the House. I urge the Minister to note what has been said by Action on Hearing Loss, Capability Scotland, Disability Agenda Scotland, Guide Dogs, the Motor Neurone Disease Association, Parkinson’s UK and a range of members of the Disability Benefits Consortium, and to do the right thing. I urge the Government to use next week’s autumn statement to pause these cuts until appropriate alternative measures to implement the commitment to halve the disability gap have been fully considered, and to do all that they can to secure support for current and future claimants so that sick and disabled people are supported adequately when they are able to work, and also when they are unable to do so.
I urge the Minister to respond positively today, and to remove the shadow that hangs over the lives and futures of too many people throughout the United Kingdom as they fear the future and what the Government appear to be seeking to do. I urge her to do the right thing, and to respond to the debate with compassion and understanding.
Ms Margaret Ritchie (South Down) (SDLP)
It is a pleasure to follow the hon. Member for North Ayrshire and Arran (Patricia Gibson). I congratulate the hon. Member for Airdrie and Shotts (Neil Gray) on initiating the debate. He has a certain credibility, as he has already raised this issue in the Chamber on several occasions. I welcome the cross-party nature of both the motion and the speeches that we have heard so far. We want to see a Government who care: a Government who protect society, but also protect those who are disabled and vulnerable.
I shall make my speech in a Northern Ireland context. As was mentioned earlier by my hon. Friend the Member for Foyle (Mark Durkan), my colleagues in the Social Democratic and Labour party and I voted against the Welfare Reform (Northern Ireland) Order 2015 and the Bill that became the Northern Ireland (Welfare Reform) Act 2015 in the House of Commons less than a year ago. Those measures were dealt with in the House because the ruling parties in the Northern Ireland Executive, Sinn Féin and the Democratic Unionist party, voted for a legislative consent motion that locked Northern Ireland into the
“welfare clauses of the Welfare Reform and Work Bill as initially introduced at Westminster”.
That is directly relevant to today’s debate.
The clauses in question covered the insidious £29.05 a week cut in the ESA WRAG component and the corresponding cut in universal credit. Under the previous Chancellor and the previous Work and Pensions Secretary, the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith), the Government justified the cut by claiming that it would encourage claimants into work by removing financial disincentives.
I have two issues with that. First, there was the thinly veiled suggestion that members of the ESA WRAG needed financial strain to push them into employment. I know many people in that category, some of whom are constituents and some of whom are related to me. The vast majority are actively seeking work and desperate for the independence and fulfilment that a meaningful job can offer. In my previous role as a Northern Ireland Minister dealing with these matters some seven years ago, I came into contact with people in that position. I knew that they desired work because it would give them status, identity and a purpose in life. The barrier that prevents such people from securing employment has been created by the lack of special adjustments and support in the workplace and by discrimination on the part of some employers, not by the absence of a work ethic.
Secondly, not one shred of evidence has been produced, by the Government or by others, to suggest that £29.05 a week in addition to the basic amount acts as a disincentive. Will the Minister please tell us whether she has any evidence to present to the House, or whether she is endorsing the former Chancellor and his predecessor at the suggestion of the Department for Work and Pensions?
Moreover, in a wider context, we should remember that the original taper in universal credit has been gradually eroded, which has reduced the financial gap between benefits and earnings from employment. Universal credit was intended to prevent claimants’ income from dropping sharply as they moved into work, but the cliff is gradually re-emerging as more and more cuts are packaged into it.
The proposed cuts in social security offices in Northern Ireland will lead to their closure, and in my constituency and that of the hon. Member for Strangford (Jim Shannon) that will remove access from the most vulnerable people, who are periodically unemployed because of their disability. Running in parallel with these proposed cuts is a lack of accessibility to immediate help.
We should remember that the freeze in benefits is itself the biggest cut in the welfare bill. It may not attract the same criticism as blunter cuts, but it has a very real impact on claimants’ living standards. Although the additional amount that the support group receives—currently £36.20 a week—is not subject to a freeze, the basic amount of ESA is. People in the work-related activity group are not just losing nearly £30 a week; they are losing even more from their basic amount, and members of the support group will also suffer a reduction in their overall amount in real terms. This is a slow and creeping means of reducing living standards and piling financial strain on all our constituents with complex health conditions and disabilities who will apply for ESA.
As we approach the week of the autumn statement, I urge the Chancellor—who is not in the Chamber today—to rethink these potential cuts and to reflect on the cross-party nature of the motion, which asks for the autumn statement to provide a pause. We want to develop a society that protects and safeguards those with disabilities, whether they are physical or psychiatric, because the one thing that they desire most in this life is the status and purpose of a job to get up for every day.
Natalie McGarry (Glasgow East) (Ind)
It is a pleasure to follow the hon. Member for South Down (Ms Ritchie). I, too, congratulate the hon. Member for Airdrie and Shotts (Neil Gray) on securing the debate. It is notable that members of nine parties supported the motion, to which I was pleased to add my name.
It is incredibly disheartening—actually, heart-breaking —that we are having a debate on cuts to support for disabled people in 2016. This should be an issue of consensus in this House, but it has not always been. In a debate on the disability employment gap in June, the former Secretary of State for Work and Pensions, the right hon. Member for Preseli Pembrokeshire (Stephen Crabb), said:
“There have been times in the past when the House has sought to speak with one voice, and no more so than in the area of disability.”—[Official Report, 8 June 2016; Vol. 611, c. 1265.]
Sometimes, when we have discussed support for disabled people, it has been felt that the Opposition and some of the Government’s own Back-Benchers, alongside civil society, speak a different language from that of the Government. I hope today that the motion serves as an interpreter and we can understand each other and act in concert.
Since the UK Government announced their plans to cut ESA by £30 a week—which will reduce the budgets of the sick and disabled by one third—MPs of all stripes have stood repeatedly and railed against it, and charities have unanimously condemned it, but this Government have so far chosen not to listen. Let us hope today, with so much support in the House, that changes.
We already know that many people who are currently unfit for work are dubiously placed in the ESA work-related activity group and that DWP policies already force WRAG claimants to meet arduous bureaucratic requirements simply to receive the financial support they rely on and deserve. We already know that the UK Government’s welfare reform programme is impacting disproportionately on those living with disabilities and sicknesses and that it impairs their ability to work. We also already know that there is currently absolutely no evidence that these policies of cuts will have a positive impact on moving those in the WRAG group into work. There is no evidence from the Government, despite repeated requests for it to be produced. It is therefore absolutely imperative that the Government pause the implementation of the cuts.
The former Chancellor of the Exchequer, the right hon. Member for Tatton (Mr Osborne), proposed these changes with the aim of ending what he called “the perverse incentives” that
“otherwise discourage claimants from taking steps back to work”.
But this is a different time, a different era, a different Government. The extra £30 a week for ESA recipients is not a luxury above and beyond jobseeker’s allowance; it was intended—and should remain—for the additional costs associated with their condition.
Only last week a UN inquiry found that there had been “grave and systematic violations” of disabled people’s rights under the Government’s welfare reforms. On page 6, the report recommends that social protection systems should address the costs associated with disability. I implore Ministers to read it and act.
Ministers have stood at the Dispatch Box to say that they are forced to make “difficult decisions”, but it is not they who bear the brunt of those difficult decisions. It is the Davys mentioned by my hon. Friend the Member for Glasgow North East (Anne McLaughlin): genuine, ambitious, decent folk trapped by illness or disability. But the unfortunate truth is that the Davys of this world are not the exception. Every Member has a Davy and constituents who will be affected.
We must ask ourselves why the Government choose to cut £30 a week from ESA, choose to close Remploy, choose to cut disability employment advisers by 60%, choose to abolish the independent living fund, choose to replace disability living allowance with a far more restrictive PIP assessment criteria and choose to remove Motability from 90,000 disabled people. None of those decisions demonstrates the laudable ambition to cut the disability employment gap in half.
I want this Government to champion social mobility, not contribute to social stagnation and isolation. I want the Government to offer people with disabilities a helping hand, not to kick away their ladder. Today, they have a chance to do that. My constituency, Glasgow East, has a higher than average level of disability, born or acquired. Most people I speak to tell me, if they are able, they want to work. They want support into work. They want to use their considerable talents to contribute to society. They do not want to be objects of pity or to have to constantly fight for dignity.
According to a survey conducted and released last year by the Disability Benefits Consortium, almost one third of people currently on ESA say they cannot afford to eat on the ESA they receive. I know that there are honourable and decent Members on the Government Benches, and I know that it is not Government policy to starve those people into work, so today they can ensure that that is not the unintended consequence of these cuts. If there was ever an opportunity to ditch this punitive aspect of welfare reform, it is now. We have a new Government, a new Prime Minister and a new Secretary of State: this is the time to assert who we are as a society and who they are as a Government. If the Prime Minister wants truly to live up to the spirit and the letter of her words spoken on the steps of Downing Street, when she pledged to build a country that works for all and promised to fight against burning injustice, the Government would scrap their cuts to ESA today. Otherwise, it is a case of “Meet the new boss, same as the old boss,” and, for that, she will not be forgiven.
Christina Rees (Neath) (Lab/Co-op)
It is a privilege to speak in this timely debate about a very serious and concerning matter, and I congratulate the hon. Member for Airdrie and Shotts (Neil Gray) on securing the debate.
The welfare state has been the jewel in the crown of British politics for over 70 years. The concept was brought to life by a number of Liberal reforms during the first two decades of the 20th century and has been improved upon and matured by successive Labour Governments, starting with Clement Attlee’s Administration following the 1945 general election. The central principle that led to those Acts of Parliament was the delivery of social security—a safety net of the state, there to catch people who are down on their luck and who have experienced trauma in their lives, whether that be illness, accident or unemployment. This right to social security was then enshrined in article 22 of the universal declaration of human rights in 1948. The notion of social security and welfare is not one that the Labour party wishes to monopolise, and we must recognise the symbolic importance of the fact that many aspects of the welfare state have been retained during the tenure of every Government since 1945.
This Conservative Government seem determined to do everything they can to undermine this social contract and undo 70 years of work. Under the guise of austerity, the Tories have taken through the biggest cuts to welfare for 100 years, and since 2010 we have seen an assault on benefits for disabled people, working people and single parents, among others.
The proposed cuts to ESA and universal credit are yet another act to deliberately hurt the working class. The Resolution Foundation has undertaken research that suggests that cuts to universal credit will leave 2.5 million working families, on average, £2,100 worse off. It also estimates that by 2021 the poorest 50% of households will be £375 worse off on average. How can such cuts stand up to the scrutiny of an impact assessment or distributional analysis? They simply cannot, and I urge the Government to honour their word and reintroduce an adequate distributional analysis of their economic approach.
The Institute for Fiscal Studies identifies that the effect of the changes to tax and welfare proposed in the 2015 autumn statement would mean losses 25 times greater for those in the bottom decile than those in the top decile. It also claims that almost 500,000 children will be plunged into absolute poverty by 2020 as a direct result of planned tax and benefit reforms. The Office for Budget Responsibility has confirmed that keeping cuts to the work allowance of universal credit means a £9.6 billion reduction in support for working families over the next five years. That is not quite the
“country that works for everyone”
that the Prime Minister aspires to.
We have already seen the Government backtrack on their cuts to PIP, and we are still to find out how they propose to fill the £4.8 billion black hole of committed spending that it left. The opposition to these cuts is not limited to the Opposition Benches, and we have seen a number of the Government’s own Members voice their concerns, the most important of which was the resignation of the former Secretary of State for Work and Pensions, the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith)—whose idea universal credit was—because he felt the cuts were going too far. He has most recently called on the Chancellor to cancel the planned tax cuts and to reverse cuts to universal credit.
The concept of an employment and support allowance was based on assessing the difference between those with the hope of recovery and those with a chronic illness. For those people with the aim of becoming well again and returning to work, an amount has been paid on top of what they would have received if they had been on jobseeker’s allowance. This additional amount supports them to undertake work-related activity as a means of transition back to the workplace. There are currently 492,180 disabled people nationally in the employment and support allowance work-related activity group. Should the cuts be implemented, those people will be £30 a week worse off, and equivalent cuts to universal credit will come on top of the £24 billion of support that has already been taken away from disabled people by this Government.
Universal credit was originally designed to ensure work that pays, but cuts to the work allowance will completely undermine that. While I can commend the aim of making work pay, I doubt the ability of universal credit to deliver that. The concept has been flawed from the start, and the Government have been forced to extend its roll-out seven times since March 2013. Cutting the work allowance of universal credit and abolishing the ESA work-related activity benefit will clearly be counterproductive. It is likely to increase the number of long-term unemployed people and penalise sick or disabled people who are trying their best to return to work.
Parkinson’s UK says that,
“the Work Related Activity Group is not comprised of people who are fit and healthy to work. It is made up of people who the Government has found to be currently unable to work due to illness or disability. It is illogical and medically impossible to incentivise a group of people to recover their health by reducing the amount they have to live on”.
I fully support the notion of full employment, but we must recognise that some people need support and time to return to the workplace following illness or disability. Others will not work at all.
In a modern, progressive, compassionate society—which the United Kingdom claims to be—is it not okay to recognise that some people are unfortunately not in a position to work? Instead, we have a Tory Government with a perverse view that our country is made up of scroungers and shirkers who deliberately avoid work, and that the only way to encourage them back to work is to take away the little support they receive to help them on their road to recovery. I have never met anyone who deliberately chooses not to work and not to reap the benefits that work brings. It is for these reasons that I urge the Government to reconsider their irresponsible and pernicious strategy to make cuts to ESA and universal credit, and carefully to consider the impact this will have on sick and disabled people, whose efforts to deal with the trials of life and return to work should be applauded, not ridiculed.
George Kerevan (East Lothian) (SNP)
I join other hon. Members in commending my hon. Friend the Member for Airdrie and Shotts (Neil Gray) not only for securing the debate but for mobilising such a cross-party coalition. I must also commend the Minister for Disabled People, Health and Work, the hon. Member for Portsmouth North (Penny Mordaunt), for making notes and being attentive during the debate. There are many Ministers that we could all name who do not do that. I know that she will not give much ground at the end of today’s debate, but I hope that she will take away the feeling of the House on this matter and acknowledge the cross-party view that we should delay the implementation of the cuts to the work-related activity component of the employment and support allowance, at least until we have seen the outcome of the Green Paper.
Interestingly, the underlying reason for a delay has been given to us by the Government themselves. They have implicitly admitted that there is something wrong with the disability payments system for those seeking to get into work. They are looking at the matter again, and we know that the Green Paper consultation period will finish in February. There will then be discussions, and the Government will come back with something after that. All this could take a year or perhaps slightly longer, and we might not see any resolution before the autumn statement of 2017 or possibly in the Budget of 2018. So why change the system now? Why give the civil service more difficulties by changing it now and having to change it again in a year or 18 months’ time? The Government have given us the rationale for a delay.
Mr Burrowes
The hon. Gentleman has talked about timing. I want to be more optimistic and give the Government an opportunity here. They are already responding to suggestions about an integrated approach in the Green Paper. We heard announcements yesterday relating to mental health and to homeless jobseekers facing sanctions. I hope that we can look forward to more announcements before April that will mean that we do not need to pause. Let us remain hopeful that we do not have to wait until April for the vision of the Green Paper to come to fruition.
George Kerevan
I am happy to accept that optimistic approach. The hon. Gentleman will possibly have more influence on the Government than I will, and the sooner that happens, the better. In the spirit of this debate, I am trying to be as reasonable as possible in giving the Minister information to take back to the Government.
The most frightening statistic that I have read in recent months relates to the rise in the number of people with disabilities in the adult workforce. The figure is something like 400,000 since 2013, so this is not a diminishing issue; it is a social problem that is rising. I suspect that an awful lot, if not the majority, of those citizens with disabilities are suffering from mental health issues. That is precisely the group that comes in and out of employment. It is the strategic group for which we have to craft a benefits system that will help them through the process and give them the support and encouragement they need to get back into work permanently. This is not just another component of the welfare system; it is a key component for dealing with a growing problem, so again we have to ask the Government to look at the issue and not just to make short-term changes. They need to get the Green Paper through and find a permanent solution.
Justin Tomlinson
The hon. Gentleman is making a powerful point. He is right to highlight the fact that 50% of the people who go through ESA will have a mental health condition. We should recognise the fact that society is getting better at recognising those with disabilities, which is why we are seeing an increase in the numbers. We also have an ageing population, and 81% of disabilities are related to age.
George Kerevan
I could not agree more with the hon. Gentleman, who made an impassioned and elegant speech earlier. Indeed, I am happy to commend the former Prime Minister, who made an impassioned effort to direct the Government to deal with mental health issues. In the light of that, let us not rush into tinkering with the ESA work-related activity component. Let us leave aside these short-term changes until we get a permanent solution on which we can all agree.
The hon. Member for Waveney (Peter Aldous), who is no longer in his place, spoke earlier in the debate. Like me, he represents a constituency in which the full-service roll-out of universal credit has begun. It began in my constituency in March 2016. One of the problems that would emerge if we were to proceed with the ESA work-related activity component cuts, along with ending the eligibility of new claimants under the universal credit regime after April 2017, is that that would create a two-tier system.
Leaving aside the philosophical issues about universal credit, I just want to point out to the Minister that one of the problems is that the full-service roll-out is not working well. This has become the dominant issue in my postbag, with which my constituency office has to deal. With the best will in the world, Jobcentre Plus staff are trying to tackle the problems with the full-service roll-out, but we have had computer problems including constant software bugs and changes. The inability to adjust to the new system has meant that the citizens advice bureaux and the libraries, which are run by the local authority, have been deluged with requests for support by people who are trying to readjust to the universal credit system. Given that the roll-out is not going smoothly, any suggestion that we can suddenly reduce ESA WRAG to the JSA level in April and that it will go through smoothly is wrong. I want to put it on the record that those of us—this has nothing to do with party or opposition to the Government—who are dealing with the full service roll-out know that it is not going well. We should not be changing the way the system works until we know that it is working in a positive way.
There is no one in this House who would not want to see more people with disabilities get back into the workplace, but there is a specific local problem. All the statistics show that we are actually as near to full employment as we are ever going to get. The hon. Member for North Swindon (Justin Tomlinson) was rather scathing about experts and statistics, but they are all that we have to work with. The latest figures from the November Bank of England inflation report suggest that the jobs market will remain tight over the next three years, so the Government must bear that in mind when considering the prospect of getting large numbers of people with disabilities back into the labour market. If we are to get more people back into work, we will have to work with employers and look much more closely at their response.
If there is any lurking suspicion in Government—I am not saying that there is—that reducing ESA WRAG will force more people back into the labour market, I can tell them that that will not work. If that was ever the approach—I am not saying that it was—not only would it be callous, but it would be ineffective. We have to work with employers to put systems in place to enable and prepare them to take more people with disabilities into the labour market. That is a longer-term problem, which will be not be resolved in April by cutting ESA WRAG.
My final plea to the Minister—she has listened attentively and I thank her for that—is to go back to the Treasury and the DWP and rethink the change. It is only a week until the autumn statement, and those of us with any knowledge about how the Treasury works will know that the midnight oil will be burned this weekend as the final changes are made to whatever will be announced next week. There is still time to rethink these cuts.
Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP)
I thank my hon. Friend the Member for Airdrie and Shotts (Neil Gray) for securing this extremely important debate. I want to declare an interest as I worked in learning disability services prior to joining this House and am now chair of the all-party parliamentary group for disability.
Since being elected, I have looked deeply into the effects of the Department for Work and Pensions’ assessments, particularly those of people with mental health issues and disabilities. I am sure that many will agree that they are deeply unsuitable. The assessment is inadequate and fails to take a much needed holistic, tailored or specialist approach. We must ensure that we harness people’s potential and assess them fairly. I am sad to say that I have met many disabled constituents who have been unfairly treated by the welfare system. Many have been left with depression in addition to their disabilities. Their problems have been compounded. They experience a sense of hopelessness in the face of changes, often feeling that they have little voice. We must give them that voice in this House.
People whose Motability cars were taken away from outside their front doors have been left without independence and been plunged into dependence. Cuts to disabled people’s benefits are simply unacceptable. If they were morally or socially acceptable, we would not be having this debate. It is unsurprising that so many in this House, from both sides of the Chamber, feel passionately that we should not be taking much needed money away from the most vulnerable in our society. What is surprising is that the UK Government intend to push forward with the changes, which will have a genuinely detrimental effect on people’s lives. I ask the Government to think again.
Make no mistake, a reduction of £1,500 a year in benefits would be absolutely catastrophic for many and will undoubtedly exacerbate poverty among the disabled. It is unacceptable. The Government’s assertion that the work-related activity component acts as a disincentive for people to look for work can only be described as a sweeping statement. There is no evidence whatsoever to back up that claim. Does the Minister genuinely believe that disabled people are more likely to get a job if their benefits are cut? Employers’ attitudes, a lack of understanding, a lack of training and access to job opportunities, a lack of equality in society—those are the real barriers to employment for the disabled. Statistics show that disabled people are twice as likely to be unemployed, and that is not linked to supports, which are vital to help people to find employment, make adaptations and remain in employment. The costs for disabled people are much higher and we must acknowledge that.
I was pleased to hold a Disability Confident event in my constituency a few months ago. I was able to speak directly to employers to help them to overcome preconceptions and to provide them with information about the support that they can access to employ people with disabilities. I urge MPs across the House to do the same. This month, I am hosting my constituency’s small business awards and have developed a specific award for inclusive employers. I want to ensure that I support small businesses that provide jobs, and inclusive jobs in particular.
The APPG for disability, which I have the privilege of chairing, will publish a report in the coming weeks on practical measures showing how Government, business, industry and other organisations can help disabled people into work and halve the employment gap. I specifically ask the Minister to commit to meet our cross-party group and to consider the report, which now has the support of seven parties. With the Minister, I recently spoke at a parliamentary event that brought inspirational Paralympians to Westminster and we championed their achievements. We should build on that.
Let us look at support. Let us look at abilities, not disabilities, and at people’s potential and aspirations. Let us look at opportunities for disabled people to start their own business and to overcome hurdles. Let us not lose their skills and value to our economy. Let us turn this debate on its head. We should not be short-sighted and do harm; we should pause these cuts. Let us ensure that the UK is compassionate and a role model in disability support and employment so that others across the world can look up to us in our endeavours.
Jim Shannon (Strangford) (DUP)
It is a pleasure to speak in this important debate. I thank the hon. Member for Airdrie and Shotts (Neil Gray) for setting the scene so well. Right hon. and hon. Members across the Chamber have made marvellous contributions. I have the pleasure of speaking on behalf of the DUP and am happy to have the same attitude as others on the right way forward.
ESA is a complex, complicated benefit with many different aspects. Like many other MPs, I have a full-time member of staff dedicated to working with people to help to calculate their benefits and fill out the confusing, complicated forms. She works some 37.5 hours a week—sometime more in her own time—and always has a waiting list of people to see her. That is how it is in my office, and I suspect it is the same in others. On my constituency days, I also take on the benefits problems, while the admin staff in my office handle the day-to-day queries. A lot of our time is spent trying to help people, which is why today’s debate is so important to my constituents and to me. I watch the struggles that people go through and wonder how these vulnerable and ill people can go through more.
Christina Rees
Further to the point about employing full-time caseworkers to deal with the issues that the hon. Gentleman has just mentioned, the caseworker I employ is passionate about helping my constituents in Neath, but the toll on him is great, and he is under strain. We are passionate about what we do, but the workers in our offices are passionate about what they do, too, and we must give credit to them.
Jim Shannon
The hon. Lady is right. Our staff are compassionate on behalf of our constituents—in many cases, they themselves are our constituents—and they understand the issues very well. When it comes to explaining ourselves, let us make sure that that point is highlighted.
Mr Jim Cunningham (Coventry South) (Lab)
This does not only affect our staff. Cuts to legal aid and to organisations such as citizens advice bureaux very often mean that we are picking up issues that really only a lawyer should be dealing with.
Jim Shannon
Again, that problem will be replicated across all our constituencies. In my constituency, the citizens advice bureaux have reduced their hours, which means that they have reduced their capability to take on tribunals and appeals. We have probably filled that gap. That responsibility has fallen on the shoulders of people not only in my office, but in the offices of other Members in this House. I thank the hon. Gentleman and the hon. Lady for their contributions, because they have outlined the issues very clearly.
In the summer Budget of 2015, it was announced that the work-related activity component paid to those in the WRAG would be abolished for new claims from April 2017. The equivalent element in universal credit will also be abolished. This means a reduction of £29.05 a week, and aligns the rate of payment with that for those claiming jobseeker’s allowance. It is said that existing claimants will not be affected and that there will be protections for those who move into the WRAG or the universal credit equivalent from the support group. The changes were introduced to
“remove the financial incentives that could otherwise discourage claimants from taking steps back to work.”
As of February 2016, there were some 2.4 million ESA claimants in Great Britain. Of these, 1.5 million were in the support group; some 19% were in the work-related activity group; some 13% were in the assessment phase, awaiting their work capability assessment—how frustrating it must be to wait for that to happen, given the time that it takes—and 3% were in the unknown phase, yet to be allocated to a group. Again, that illustrates the lack of process and the difficulties with time. Many people are in this group. Although the changes apply to new applicants, there will certainly be people that are affected. I understand that the DWP impact assessment says:
“The notional loss to each family is expected to be around £28 a week, which represents around a 10 per cent notional change in net income, presented in 2019/20 prices. Someone moving into work could, by working around 4-5 hours a week at National Living Wage, recoup the notional loss of the Work-Related Activity component or the Limited Capability for Work element.”
Let us focus on what that means. The Government expect those disabled people to find four to five hours’ work elsewhere to fill the gap. For a start, the hours might not be there. What if their disability means that they are not able to do it? With respect, it is just incredible that the Government believe that that could happen.
Let us be serious here: the whole point of ESA is that it is for people who are unwell. There seems to be a presumption by the DWP that working the five hours a week to fill the gap is not an issue, when in fact the 200,000 or so people who are in the WRAG for mental and behavioural issues may not find it such an easy option. Earlier, a Member referred to those with mental health issues. In Northern Ireland, we have many, many people who have depression and other mental health issues, and who suffer greatly every day. Our 30-year conflict has contributed to those problems.
It is fair to say that whenever a Government do something good, we want to congratulate them. The DWP has stopped the renewals of ESA for those who are long-term sick. I am very pleased about that. Many people with brain injuries or who have children with educational and emotional difficulties have come to my office. The court has appointed people to deal with their money, and yet, until now, those people have had to renew their ESA claim every two years. I wrote to my own Department in Northern Ireland about that matter, and I was very pleased to get a response from the Government through the Department and to hear that they are now doing away with that requirement. It is only right that those for whom the court has made appointees should not have to renew their ESA every two years. It is just silly to ask for that.
As an employer, would I hire someone who may be prevented from being reliable because of their documented illness—someone I could not allow to work with customers owing to such issues? Although I would have sympathy, could I run my office like that? The answer is that I could not, and I doubt that the Government could either, so who will employ these people who are being told, “Just work another five hours to make it up.”
Let me be clear: we are not talking about jobseekers, but about people who have a recorded and supported illness. The rationale, while perhaps understandable in other areas, is ridiculous for those who are in this group. There is a reason they are not simply on JSA, and the Government must recognise that.
The hon. Member for South Down (Ms Ritchie) referred to the closure of offices, and we are concerned about that as well. We are fighting that together. The campaign is supported by all the parties at every level—council level, MLA level and MP level. Retaining those offices is important. We also should remember the support from the Disability Benefits Consortium. Mencap in Northern Ireland has asked me to express its concerns as well. I am given to understand that there will be
“new funding for additional support to help claimants return to work”.
That has been clarified as £60 million in 2017-18, rising to £100 million in 2020-21. In addition, the Government have announced an extra £15 million per year in 2017-18 and 2018-19 for the Jobcentre Plus Flexible Support Fund to be set aside specifically for those with limited capability for work. Some £43 million has also been allocated to trial ways of providing specialist support for people with common mental health conditions between 2017-18 and 2019-20. I wish to make this plea to the Minister. When we have those staff in place, please, please can we make sure that they have the training, the ability and the quality to respond, because very often, with great respect, they do not have those skills. As the elected representative of my staff, it is frustrating to have people on the phone telling someone that they do not understand what they are about.
My concern is that the seriousness of the illness is not taken into account. It almost feels as though Government are saying, “Yes, yes, I know you’re feeling a trifle under the weather, but come on, old chap, stiffen that upper lip and move on.” That is not possible for those suffering from musculoskeletal problems—there are almost 100,000 in this group. There is no stiff upper lip for them. There are those who cannot know when they will be well enough to work, but they are told to make up the five hours whenever they can. I am sure that my staff would love me to say, “Do your 37.5 hours whenever you feel like it. You can work from 2 am to 7 am if you like.” However, that would not help me to deal with my constituents, my customers or those who need help. There are few places of employment like that, so why can the Government not outline where those five hours at a time can be found? We could go so far as to say that people would have to work only one hour if they could find an employer willing to pay £29 an hour. “Don’t be absurd,” the Government would say, but that would be as easy to find as an employer who would allow someone to work five hours a week whenever they choose, according to their illness.
Instead of cutting benefits, we should focus on improving support for disabled people who need help and on getting them back into work. I know that the Government have made some concessions, and the unemployment figures this week showed that more people who are disabled are in work. That is good news and a move in the right direction. Let us continue in that way.
The Government need to understand the difference between being ill and being unable to find work. In the past month I have had in my office a former ward sister, a former construction worker, a business owner and a social worker, all of whom are now on ESA. I know those people well. They do not want to be on ESA. They are not choosing not to work out of laziness. They were earning £500 a week and are now getting £75, so the Government’s inference in this regard is insulting. More importantly, it is based on a false premise that cannot be allowed to stand. I therefore feel that I have to stand with the proposer of the motion and those who have supported it and say that we are against these Government proposals. I know that the Minister is an understanding lady and I look to her to respond compassionately to the issues that we have raised. I hope her response to today’s debate will be positive and constructive. Let us help our people as we should.
Dr Eilidh Whiteford (Banff and Buchan) (SNP)
This debate could not be more timely, given that we are a week away from the autumn statement. It speaks volumes that the motion has been supported by Members from nine parties represented in this House. I warmly congratulate my hon. Friend the Member for Airdrie and Shotts (Neil Gray) on his persistence in pursuing this issue and on marshalling such broad cross-party support.
As we have heard, Members on both sides of the House know that it is just not right to cut employment and support allowance for sick and disabled people in the work-related activity group by almost £30 a week. It is just not right to cut the corresponding limited capability for work component for those on universal credit. It is especially not right to press ahead with these punitive cuts, which are due to come into effect for new claimants from next April, when the Government have acknowledged that their efforts to address disability employment have failed to date, and their system of employment support for sick and disabled people of working age has been wholly inadequate.
Earlier this month, the Government finally brought forward their long-awaited Green Paper on the disability employment gap, which I have welcomed and we all hope will initiate comprehensive improvements. We have heard a very different tone from Ministers in recent weeks. There have been serious attempts by senior Ministers to distance themselves from their predecessors, not least with the Prime Minister’s early commitment to a
“country that works for everyone”.
They will be judged by their actions, not their words, and that is precisely why we need to hit the pause button on these cuts to ESA and universal credit that will cause hardship and distress to thousands of people who are not fit for work. The exchanges between the hon. Members for South Cambridgeshire (Heidi Allen) and for Twickenham (Dr Mathias) captured this point succinctly when they said that we need to pause to allow the support infrastructure to catch up.
Ministers know that we in the SNP have been deeply critical of the Government’s willingness to allow the most disadvantaged sick and disabled people to bear the brunt of austerity cuts. We will continue to hold them to account for the adverse consequences of their actions—those consequences are already writ large among sick and disabled people in all our communities and constituencies—but I and my colleagues have also tried to be constructive by offering ideas, solutions and better ways forward. We will continue to do that, because it is in everyone’s interest that we get this right.
We should not forget that when these cuts were first announced, the then Chancellor argued that they were intended to remove “perverse incentives” in the system. That point has been made by several hon. Members today. I hope that the new incumbents in the DWP and the Treasury now recognise that taking away necessary financial support from sick and disabled people who have been assessed as unfit for work does not make them get better any more quickly. Quite the reverse: there is a growing body of evidence that poverty exacerbates illness, hinders recovery, and makes it harder for people with long- term conditions to secure and sustain employment.
As we have heard, what is actually perverse is to reduce the resources available for sick and disabled people that enable them to work. I hope the Government will ditch the prejudices and stereotypes that have fed the poor policy decisions of the past, and will listen not only to disabled people and those who represent them, but to MPs on their own Benches who have expressed severe disquiet about the consequences of these cuts.
I am reluctant to break the consensual tone of this debate, but I must respond to the question that the hon. Member for Edinburgh South (Ian Murray) asked my hon. Friend the Member for Airdrie and Shotts about whether he thought that the Scottish Government should plug the gap, using new devolved powers in Scotland. Unfortunately, the hon. Gentleman has not stayed for the rest of the debate, but I suspect that he knows as well as I do that both ESA and universal credit are not areas of devolved competence. They are fully reserved, despite my best efforts last year, when I tabled and spoke to amendments to the Scotland Bill that would have devolved all working-age benefits. Obviously, we failed to win the backing of the House for those proposals.
It is a wee bit rich for Members to oppose the devolution of those powers yet to demand that the Scottish Government plug the gap. The Scottish Government have already committed an extra £20 million for disability employment support, but they cannot be expected to plug every hole in the bucket of poor Westminster policy making. The hon. Gentleman should take a long, hard look to his own conscience and perhaps his own voting record.
Kate Green
As the hon. Lady will remember, my hon. Friend the Member for Edinburgh South (Ian Murray) pointed out that the Scottish Government were able to provide additional support in relation to the bedroom tax, so it has such a power regarding reserved benefits. His question was: would they use that power in relation to this cut?
Dr Whiteford
I thank the hon. Lady for her point, but she should remember that the Scottish Government’s steps to mitigate the bedroom tax have had to be paid for out of money earmarked for our responsibilities in devolved areas. We need to take a responsible approach to make sure that we get this policy right in the long term. We have committed an extra £20 million. I do not know whether she was one of the 20 Labour MPs who marched through the Lobby like the Tories’ little helpers last year to support the fiscal charter on austerity, but as the hon. Member for South Down (Ms Ritchie) pointed out earlier, we would not even be having this discussion if the Labour party had been the effective Opposition it could be. I urge Labour Members to work with all of us on these Benches to stop the austerity that is hurting disabled people, to rise to the occasion, and to be a better and more effective Opposition.
Let me come back to the main point of the debate. I want to highlight a number of reasons why the cuts to ESA WRAG and the universal credit limited capability for work component are harming people and are counterproductive. The first is that ESA should not be considered an equivalent of jobseekers’ allowance. People in the ESA WRAG are assessed as not fit for work, whereas with jobseekers’ allowance, the clue is in the name. However, the key point is that, for the most part, JSA is a short-term benefit. Most claimants come off it in a matter of weeks or months, so it is not designed to support people over long periods. By contrast, ESA is for people with serious health problems and disabilities. It is designed to cover some of the additional costs associated with serious illness and disability, and it recognises the reality that many claimants are likely to be in receipt of the benefit for a longer period—in over half of cases, for more than two years.
In my part of the world, one of the most obvious additional costs is heating for people who are likely to be at home all day, who might not be able to move about so much and who need to keep warm. People on low incomes already spend a huge proportion of their money on essentials such as energy and food. We know from the debt charities referred to earlier that a large proportion of people on ESA are already in debt, running a domestic budget deficit and living from hand to mouth. They have already experienced substantial real-terms cuts to their incomes due to austerity.
Getting by on a low income for a long time is hard. It entrenches poverty among sick and disabled people, who end up using all their savings and eroding their assets over time. Illness and disability also take a heavy financial toll on wider family members, who often find their own earning potential limited because they are providing unpaid care, and who try to support loved ones out of their own limited financial resources.
The Government are quite right to say that the disability employment gap is unacceptable, but they need to recognise that those disabled people who are in work are more likely to be in low-paid jobs and are at higher risk of in-work poverty. They also often move in and out of work more frequently than those who do not have health problems.
Less has been said in the debate about the parts of the motion relating to universal credit. The disabled worker element of working tax credit, which is due to disappear under the shift to universal credit, is the very component that actually makes work pay for many disabled workers. The loss of the limited capability for work element for everyone except those in the support group means that many working disabled people will be around £1,500 a year worse off. That will make it harder for disabled people to sustain employment, and it actively undermines efforts to support sick and disabled people into work.
The Government have pointed out in the past that these cuts will apply only to new claimants, but the reality is that people with serious fluctuating conditions often move in and out of work. That is particularly true of people with persistent and serious mental health conditions, who make up such a large proportion of the ESA case load. The fluctuations of these and other conditions that change over time are often compounded by fluctuations in the labour market and by the trend towards more temporary, fixed-term employment and zero-hours contracts.
The cuts we are debating actually create significant disincentives for those with fluctuating conditions to move into work, because if they do, they become sick again, and if they try to get back into work too early in their recovery and they relapse, they know they will be back on ESA at a significantly reduced rate. That is punitive and counterproductive.
That is at the heart of why we are calling on the Government to hit the brake on these cuts until they have had time to get their act together on the Green Paper and to come forward with more comprehensive and effective support measures for sick and disabled adults of working age. That has been a consistent refrain from Members this afternoon, who have shared moving testimonies from their constituencies.
Cuts to the already low incomes of sick and disabled people who are not fit for work or who are in precarious, low-paid employment are completely unjustifiable. They will damage the health and wellbeing of ordinary people whose lives are already hard enough because of serious health problems. These cuts will push people into deeper poverty and further away from sustainable employment.
The distress and anger of sick and disabled people can be seen and heard in communities across these islands, and those concerns are articulated clearly in the open letters published today. These people are citizens with rights, citizens with needs and people with a contribution to make. It is time that the Government started listening, and I urge them today to do the right thing.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
I congratulate the hon. Member for Airdrie and Shotts (Neil Gray) on calling this timely debate. The fact that he has such a degree of support from across the House cannot be overestimated. The speeches we have heard show the House at its absolute best. We are concerned about the plight facing so many of our constituents and the impact that this additional cut in support will have on them.
Although my party wants the ESA WRAG cuts to be scrapped completely, we will support this motion calling for a postponement until the Government have been able to analyse the consultation from their Green Paper. The same points have been made a number of times: I think that only one speaker generally supported what the Government are doing, while everyone else set out the reasons why their proposals should not go ahead. The key element is that we have only just had the closing date of the Green Paper consultation. I hope that the Minister accepts these points; she will have support from across the House if she does.
Let me re-emphasise some of the points that I made in yesterday’s debate. Half the 13 million people living in poverty are disabled or live with a disabled person. The number of disabled people now living in poverty is 5 million—one in three disabled people. The situation is getting worse after a decade when the problem was in decline. According to research by the Joseph Rowntree Foundation, the figures that are officially published are an underestimate. Labour Members are concerned that the Government do not seem to recognise the link between disability and poverty. We know from extensive research that disabled people are twice as likely to live in poverty as non-disabled people. Eighty per cent. of that poverty results from the condition or disability that they experience. We have heard moving accounts from Members on both sides of the House, including the hon. Member for Stafford (Jeremy Lefroy), who gave a very eloquent description.
This is happening in the context of what disabled people are already going through; it is not just about social security cuts. The Welfare Reform Act 2012 cut £28 billion from 3.7 million disabled people, and that does not even include the cuts in social care and other health-related public services, such as the number of specialist nurses who might be available for people with a learning disability. I will not say that it is the tip of the iceberg, but it is not the whole story. Yesterday I mentioned research showing that families with a disabled adult or child have been made five times worse off than non-disabled people.
Among a number of measures in the Welfare Reform and Work Act 2016 that the Minister debated extensively with me last year, this is one of the worst. We have already heard about the cut of £1,500 a year affecting nearly half a million disabled people.
Ms Karen Buck (Westminster North) (Lab)
This morning I received an email from a constituent who has lost his ESA and has been put on the assessment rate. He suffers from lymphedema, an extremely painful condition that makes him almost unable to walk. He asked what advice I could give him, because the rate that he is now on means that he has to choose on a weekly basis between turning on the heat and eating. What advice should I give him?
Debbie Abrahams
I have a constituent with exactly the same condition, and we are going through exactly the same process with the personal independence payment as well as ESA. It is important that my hon. Friend will be representing her constituent. Sixty per cent. of people are successful in the appeals process, which shows how flawed the system is, does it not?
These are people who have been found not fit for work. There is absolutely no evidence that the cut will incentivise people. In fact, the Government’s own research, which was published earlier this year, and the Low report say that it is less likely to help disabled people back into work.
Macmillan Cancer Support has forwarded me details about a woman called Lynn, who said
“When I was ill, I had to give up work for a year. I couldn’t work—the chemotherapy knocked me for six and I just wanted to sleep all day. It was horrendous. I couldn’t pay my mortgage, my council tax. I thought I was going to lose my house. Then I got Employment Support Allowance. If they cut the ESA that would just be absolutely horrendous. I would hate to have had that done to me. Without it, we would have been homeless.”
Members across the House will have similar examples.
I again remind the Minister that the Government’s own data, which were published last year, show how vulnerable people in the group are. They are twice as likely to die as the population as a whole. That proves that incapacity benefit and ESA are good population health indicators. We hear awful language about shirkers and scroungers, but these are sick people who deserve care and support, not humiliation.
I mentioned the work, health and disability Green Paper at the beginning of my contribution. It is out for consultation, and while it seems to include some good measures, I have a number of concerns about it. I am also concerned about the reduction in employment support from £700 million to £130 million. As my right hon. Friend the Member for East Ham (Stephen Timms) said, how on earth will we reduce the disability employment gap with such reductions? The Access to Work programme is inadequate: it serves only 35,000 of the 1.4 million disabled people who are fit and able to work. It is nonsense.
I know that we are pressed for time, but I want to touch on the limited capability to work component of universal credit. It has been suggested that it applies only to new claimants, but everybody will transfer to UC at some stage, so it will affect absolutely everyone.
I also want to reflect on growing evidence of the effects that the current round of cuts are already having on sick and disabled people. They include isolation, loss of independence, reliance on food banks, homelessness, exacerbation of existing conditions and a direct link to mental health issues. They have also been associated with the deaths of claimants. It is absolutely unacceptable for policies of the state to be doing such harm, so we support the motion and call for the ESA cuts to be paused. There is a lot of support for that.
In conclusion, there is an evidence base of the effects that the cuts are having on sick and disabled people. Over the same period that the Government have cut support for them, they have given generous support to high earners and big business. Last year, the average worker’s pay of £27,645 increased by 2%, while pay for top executives on £5 million increased by 50%. The trend is getting worse and the inequalities are already being felt. We cannot underestimate the effect of those inequalities. They are not inevitable; this is about political choices. The cuts must not go ahead and we would welcome the Government moving on the issue.
The Minister for Disabled People, Health and Work (Penny Mordaunt)
I, too, congratulate the hon. Member for Airdrie and Shotts (Neil Gray) and the Backbench Business Committee on securing this debate, and all Members on the tone in which it has been conducted. Even the hon. Member for Glasgow North East (Anne McLaughlin) has managed to restrain herself today, and we are grateful for that. On these important issues, the House is often at its best when it takes this tone, and on this issue, for all the reasons outlined by my hon. Friend the Member for Enfield, Southgate (Mr Burrowes), it is important that we have done so.
Good policy cannot be created in a vacuum; we must think about how something will be delivered, how it will work in practice and how it will affect those concerned. As the hon. Member for Neath (Christina Rees) said, the welfare state is a safety net, but if it works well, it should also be focused on helping someone’s future ambitions as well as their basic needs. Proof that we have listened and understood will be in our actions, and a person’s experience of the system and the support they receive is the only thing that will ensure confidence in that system. So we must deliver and we must deliver well.
We must understand the personal impact of a policy on a person, often someone in a complex situation, under considerable strain and challenge. I refer to the budgeting challenge for those who have suddenly had to stop work or who have lost employment because of their condition or ill health, or who are facing increased costs—or both; the challenge of preparing for employment, while focusing on recovery; the challenge as those new constraints restrict a person’s choices and flexibility just at a time when such flexibility becomes an imperative; the challenges faced by people who, as well as having their own issues to deal with, often have other responsibilities and priorities—carers, parents or people who are both. Even where recovery or the all-clear is achieved, these people will still have concerns about their illness reoccurring, their ongoing relationship with their employer and the possibility of having to go through it all again.
We must ensure a person’s liquidity is in place, so that they can afford the additional costs brought by looking for work, or by being poorly or disabled: higher energy bills; mobile and internet access costs; the cost of getting insurance; the cost of a special diet, in some cases; the extra travel costs that come with unpredictable itineraries; clothing and bedding costs; and the cost of specialised equipment—to name just some of those costs. Someone with a neurological condition will spend almost £200 a week on costs related to their disability. Someone with a physical impairment will spend nearly £300 a week.
When that security and liquidity goes, often so, too, does a person’s dignity and wellbeing. They may face the embarrassment of having to pay for a train fare with a pot of 2p coins because that is all the cash they have left; the stress of having no mobile phone credit; the strain of extra planning and budgeting; the knock-on effects of all that to an already stressful situation; and the pressure of not wanting their kids to be disadvantaged or to miss out on what others are doing or what they used to do—or of not wanting that for their grandkids, as the hon. Member for Glasgow North East mentioned.
Although I can answer the question from the hon. Member for South Down (Ms Ritchie) about benefit levels having a significantly negative association in terms of employment by waving a report by Barr et al. at her,9j I will not be relying on those arguments in my speech. I say that because of the obvious point—it was made by the hon. Member for North Ayrshire and Arran (Patricia Gibson)—that someone is more likely to get into work, make a success of it and recover from ill health if they are able to devote themselves to that. If a person has other worries or concerns, their energy and focus on those objectives will be diluted. Many who find themselves in receipt of universal credit or ESA will already have complex situations to deal with, and the delivery of our services should not add to that.
Yesterday, I outlined in detail how we will deal with those issues, but let me briefly recap. We will use funds to alleviate costs directly related to work, through the flexible support fund. May I just correct my hon. Friend the Member for South Cambridgeshire (Heidi Allen) as the figure is not £15 million—it is an extra £15 million that we have put in because of these changes, and this is currently standing at £83 million? In addition, we will have national and local schemes, such as the Jobcentre Plus travelcard, but I am also negotiating deals with third parties to help with expenditure not directly related to employment: broadband costs, phone charges, energy costs and insurance.
We are extending our hardship fund, as per the announcement yesterday, to new groups. That will be new money from the Treasury over the next four years with immediate effect. For thoroughness, I will mention personal independence payments, which will help to cover costs for 53% of the people we are concerned about today.
Penny Mordaunt
I am going to make some progress. We offer personal budgeting support for those who are transferring to universal credit. That could include money advice, with a mix of online, telephone and face-to-face support. I am also looking at extending that service and considering what further support I could give.
For the sake of the record, I remind the House that the changes to WRAG due in April next year will not affect those who are already in receipt of ESA and universal credit or the equivalent. Further safeguards mean that they will not lose the extra payment even if they are reassessed after April and placed in the WRAG. I hope that that will reassure the hon. Member for Edinburgh East (Tommy Sheppard), whom I cannot see here, and the two constituents that he mentioned yesterday, Dean and Lauren.
Penny Mordaunt
Bear with me. In response to the hon. Lady and my hon. Friend the Member for Eastbourne (Caroline Ansell), we aim to protect existing claimants who temporarily leave the benefit—for example, to try out work—and who then return. We will introduce draft regulations in due course to set out the detail. Nor will the change affect anyone whose ability to work is significantly limited by their health condition or disability. They will be in the support group or the universal credit equivalent.
On that point, let me recognise the concerns that have been expressed about the binary nature of the work capability assessment and how someone’s fitness to undertake a particular type of work is not an indication of how close to the labour market they might be. We need to take into account several other factors, including their skills, in making that assessment. That is why the Green Paper focuses on the work capability assessment and its reform. I hope that that will be welcomed by all Members, particularly the hon. Members for Strangford (Jim Shannon), for Glasgow East (Natalie McGarry) and for East Kilbride, Strathaven and Lesmahagow (Dr Cameron), who mentioned it.
We have sought to get people to fit the system rather than to be part of a system that recognises the importance of personalised support. Everyone’s circumstances will be different, as will their multiple challenges.
Stephen Timms
I am grateful to the Minister for giving way on that point on personalised support. We understand that on employment support, she proposes to provide up to £100 million a year. Will she clarify whether that is in addition to the funding currently being provided through the Work programme, or whether it is a replacement for that?
Penny Mordaunt
The amount of money and how we spend it will be directed by, and based on, the needs of people who currently need the support. The situation was very different a few years ago, and it will not be like that. The right hon. Gentleman mentioned Labour’s success in this territory, but I gently point out to him that the disability employment gap closed under Labour because unemployment rose. I gently say to him that a consensus on tone has been set this afternoon, and that is important.
I am going to do something unusual and make some asks of this House, although it is usually the other way around. If the Green Paper is to deliver all that it must, we must all play our part, whatever our political hue and on whichever side of the House we sit. All the organisations and experts in our constituencies need to be involved, too, including the patient and peer support groups that we are not currently engaged with, and all the organisations that the hon. Member for Gateshead (Ian Mearns) alluded to in the case of his constituent Simon, who faced a domino effect. I am grateful to the hon. Member for Foyle (Mark Durkan) for alluding to the fact that we have a massive opportunity in the Green Paper, not only in terms of what we do for employers and healthcare, but for our own processes in the DWP.
We have designed the consultation process to facilitate discussion at a very local level, with facilitators’ packs and other support, and I ask all MPs to help to facilitate local meetings, bringing together organisations from across their constituencies. That way, we will get a good result from the Green Paper not just in the policies that will come out of it, but in starting local conversations about how it will work. On 5 December, we will hold an event in Parliament, where there will be a pack for every Member and every constituency to facilitate such dialogue.
Mr Burrowes
I am grateful to the Minister for her constructive response to the debate. All the people and organisations to which she has referred would no doubt want to hear whether the hardship fund, the flexible support fund and the third-party deals she has mentioned will fully compensate for the loss of the WRAG payments for new claimants? Will she give us such a reassurance?
Penny Mordaunt
Yes. Let me give my hon. Friend that reassurance. My hon. Friend the Member for North Swindon (Justin Tomlinson) not only thanked DWP staff again, but helpfully outlined the detail of the support mentioned in the Green Paper, which we will bring in before there are new claimants from April. I am grateful to him for going doing that. All that support will be in place before the new claims come in.
I have heard the word “pause” a lot this afternoon. I do not think we should pause that support. We need to progress it, and it will come on stream in April.
Penny Mordaunt
I am sorry, but I do not have any time left.
We must also progress the work of the Green Paper and pick up the pace, because we need to deliver on those issues. Having said that we do not wish to pause the support, I fully understand that we also need to ensure that the support for a person’s costs and liquidity—their ability to meet their cost of living—is in place. That is not just the right thing to do, but the smart thing to do if we want those people to be able to concentrate on either getting well or preparing for employment. As well as meeting those needs, we must ensure at the same time that we are taking care of their needs for the future. I have no intention of pausing our proposed support, which will come into effect in April, and I assure the House that the work we are doing—we have made announcements, and we have reiterated them again today—will meet that need. I hope that every Member will help us not only to do both those things, but to deliver on our ambitions in the Green Paper. I hope to see everyone at the event in the House on 5 December.
Finally, if the hon. Member for Westminster North (Ms Buck) has time after this debate, my officials are waiting to deal with her constituent’s case.
Neil Gray
I thank everyone who has taken part in this debate. There have been some wonderful speeches on both sides of the House calling on the Government to press pause on these cuts. The vast majority of the more than 20 Back-Bench speakers have supported the premise of the motion. I do not want to single out any Member, but all the contributions have come together to send a very clear message to the Government about what the House thinks on these matters.
I hope that the debate has given the Government cause to think again, including about how to pause the cuts at least until a new and appropriate form of disability employment support can be considered and put in place. The debate has been about building a constructive case for the Government to consider: it has been cross-party, well-tempered and, above all, an appeal. In that spirit, I wrote to the Chancellor last week offering to meet him ahead of the autumn statement to discuss how to stop the cuts happening before a replacement is considered. I reiterate that message and that offer, which is genuinely made, to Work and Pensions Ministers.
This issue is too important and the need for action is too urgent for us to retreat into party trenches. The Government must work on the same basis as that on which this debate has been conducted to deliver for and meet the needs of people such as John Clarke.
Question put.
International Men’s Day
(7 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Philip Davies (Shipley) (Con)
I beg to move,
That this House has considered International Men’s Day.
Before I start, may I thank the Backbench Business Committee for finding time for this debate, and particularly for finding a date as close as possible to International Men’s Day, which actually falls on Saturday? This was the closest sitting day on which the debate could have been held, so I am very grateful to the Committee.
A few people have said that they cannot be here today. In particular, I said I would pass on the apologies of my right hon. Friend the Member for Basingstoke (Mrs Miller), the Chair of the Women and Equalities Select Committee, who wanted to be here, but could not be for reasons beyond her control. I also thank the House of Commons Library, which has put together a fantastic brief for this debate. I urge all right hon. and hon. Members to read it, as it is illuminating on the subject of men’s issues. I also want to plug Incommunities, the social housing provider in my constituency, which has been celebrating International Men’s Day and last week held a “dads and lads” day at its premises. It was very successful. Finally, I want to thank the many people who have been in touch with me to tell me their story or to put forward their perspective on their life and problems. I am grateful to them for taking the time to do so.
The aims of International Men’s Day are admirable. Its objectives are: to promote male role models; to celebrate the contribution that men make; to focus on men’s health and wellbeing; to highlight discrimination against men and the inequalities that men and boys face; to improve gender relations and promote gender equality; and to create a safer world for everyone.
The UK theme for the day is “making a difference for men and boys”. That covers issues such as the high male suicide rate; the challenges faced by boys and men at all stages of education, including attainment; men’s health, particularly shorter life expectancy and workplace deaths; the challenges faced by the most marginalised men and boys in society—homeless men, boys in care and the higher rate of male deaths in custody, for example; male victims of violence, including sexual violence; the challenges faced by men as parents, particularly new fathers and separated fathers; and male victims and survivors of sexual abuse, rape, sexual exploitation, domestic abuse, forced marriage, honour-based crime, stalking and slavery.
I want to put on record the support I received from the Prime Minister, who wrote to me last month to say:
“I recognise the important issues that this event seeks to highlight, including men’s health, male suicide rates and the underperformance of boys in school. These are serious matters that must be addressed in a considered way. As I said on the steps of Downing Street on my first day as Prime Minister, one of the challenges we must confront is that white working-class boys are less likely than anyone else in Britain to go to university. I know that you held a debate in Westminster Hall last year on international men’s day, and I note that you are hoping to hold a debate in the Commons Chamber this year. Of course, this is not a matter for me as Prime Minister to decide, but I will watch with interest to see if your request is granted.”
Let me provide a bit of background. As I said in last year’s Westminster Hall debate, I wanted the men’s day to be the start of us dealing with some of the forgotten men’s issues—and there are plenty of them, far too many for me to cover in my speech today. I outlined some of the issues at the start, but I will not have time to deal with them all today. For example, I will not have time to mention the underperformance of boys in school or some of the male health issues. One thing we seldom, if ever, hear about in this place is the part-time gender pay gap. I have not heard it noted before, but when it comes to part-time workers, women are paid 6% more than men on average. I shall not have time to concentrate on all those issues, so I shall concentrate on just a few—male suicide, domestic violence, homelessness and injustice for fathers.
There is a very great difference—I fear that the Minister rather got this mixed up at the last questions session—between men raising issues, about which there is clearly no problem either in this House or in the wider world, and the raising of men’s issues. That is very different. Although we might get a lot of the former, we seldom get much of the latter, and that is what I want to focus on today.
I shall start with male suicide. According to the Library, in 2012 more than 4,500 men felt they had no choice but to take their own life. In 2013, the figure was nearly 5,000 men, while in 2014—the latest figure for which information appears to be officially available—it was 4,630 men. In fact, over the last 30 years, according to the Office for National Statistics figures, supplied to me by the Library, 134,554 men have taken their own life. The Campaign Against Living Miserably commissioned a poll that found that four in 10 men had considered suicide, with two fifths never talking to anyone about their problems. Half of those who did not seek help did not want people to worry about them; a third felt ashamed; nearly 40% did not want to make a fuss; and 43% did not want to talk about their feelings.
I want to put on record my congratulations to the Health Committee on embarking on its suicide prevention inquiry. It is looking at suicide across the board, but it is clear that this is an issue that affects men much more than women. The figures show that 75% of those who took their own life in 2014 were men and 25% were women.
Stephen Pound (Ealing North) (Lab)
Although I may not agree with the general thrust of the debate, I think that the hon. Gentleman is making an important point in this respect. May I ask whether he has disaggregated the figures that he has given? In Northern Ireland, for example, more people have committed suicide since 1997 than died in all the 30 years of the troubles, and the vast majority have been men. There were clearly specific issues and reasons behind that epidemic of suicides. Has the hon. Gentleman done any disaggregation to establish whether, for instance, people from former industrial areas who no longer have access to the role model of a miner or shipworker are affected in this way? He is on to something important, and I hope that we do not lose it in the generality of his introduction.
Philip Davies
That is a good point. The reasons for these suicides are many and varied. I suggest that the hon. Gentleman contacts CALM, the Campaign Against Living Miserably, which has members who are real experts in this field, and also consults the Library briefing, which is also very illuminating. As he says, many factors are involved when people take their own life, and each one is an individual tragedy.
Mr Philip Hollobone (Kettering) (Con)
I congratulate my hon. Friend on securing the debate, and on the powerful speech he is making. The House will have been shocked by the figures that he has just revealed. Is he confident that the Department of Health realises that this is a serious public health issue, which urgently needs to be addressed by general practitioners and hospitals up and down the land? That must be one of the main reasons why men are losing their life: it must be one of the main causes of avoidable deaths in this country. That such a large number of people should lose their life in an avoidable way is tragic, regardless of whether they are men or women.
Philip Davies
My hon. Friend is absolutely right. Debates such as this are important because they highlight the problems and urge that more be done, and I also commend the Select Committee for looking into this issue.
I appreciate that the Committee’s inquiry is ongoing, but I had a look at some of the evidence that it has received so far. I was struck by, for instance, evidence from the British Transport police relating to the suicides with which they deal. They dealt with 388 fatalities in, I believe, the last year, of which 305 were suspected suicides; 81% were men and 19% were women, but this is not just a gender issue. According to the evidence, 57% of those people had a known mental health history, 22% had been reported missing, 11% had previous convictions—one person had a “suicidal” marker on the police national computer—4% were current in-patients in mental health units, and 2% were absent without leave from mental health units. Wider issues therefore need to be considered, but they are all tragic cases. It is clear that many of the people concerned had a known mental health history, but it is also clear that many did not, and we must not forget those people.
I do not want to pre-empt the Select Committee’s inquiry, but one point made in CALM’s submission is very pertinent to the debate. It said:
“Despite the evidence that the risk of suicide is disproportionate to men as a whole when compared to women, research is often gender neutral or narrowed beyond gender (e.g. by sexual orientation or age). As a result, there is no specific research carried out on men and societal and environmental factors. Broader, gender specific research could reveal hidden causes of suicide that have not yet been explored. For instance, there could be great benefit in researching the impact of testosterone reducing drugs on the rates of suicide in men, however the current lens of research funding and its gender neutral approach does not provide a platform for such research.”
I hope that the Government will take that on board. A message should go out from the House today. If anyone is feeling suicidal, we should say, “Please speak to someone. Don’t suffer alone, as too many men often do.”
I want people to be in no doubt that there are male victims of domestic violence and abuse, despite what people may think and despite the stereotypes that surround the issue. The notion that in every case of domestic violence or abuse the perpetrator is a big burly wife-beater is just that: a notion. According to a report from the Office for National Statistics, “Focus on Violent Crime and Sexual Offences”, which relates to the year ending March 2015 and was released in February of this year,
“The Crime Survey England and Wales estimates that 8.2% of women and 4.0% of men reported experiencing any type of domestic abuse in the last year (that is, partner / ex-partner abuse (non-sexual), family abuse (non-sexual) and sexual assault or stalking carried out by a current or former partner or other family member). This is equivalent to an estimated 1.3 million female victims and 600,000 male victims.”
It also confirmed that, specifically for partner abuse, 6.5% of women and 2.8% of men reported having experienced any type of partner abuse in the last year, equivalent to an estimated 1.1 million female victims and half a million male victims. The pattern is consistent at all levels of domestic violence. In other words, for every three victims of domestic abuse, two will be female and one will be male.
Stephen Pound
I did not want to interrupt the hon. Gentleman’s flow because I appreciate that what he is saying is very important, but at the beginning of this section of his peroration he rightly said that any person, male or female, who may feel suicidal, lost or alone should seek help. The Samaritans are available every day of the week, 24 hours a day, and their phone number, 116 123, is one that we should all be familiar with. The Samaritans are there for people in precisely these circumstances, and I hope the hon. Gentleman will forgive me for intruding on his flow.
Philip Davies
I do not need to forgive the hon. Gentleman; I welcome his intervention and am grateful for that public service announcement.
According to the ManKind Initiative, 20 organisations offer refuge or safe-house provision for male victims of domestic violence in the UK. There are a total of 82 spaces in the country, of which 24 are dedicated to male domestic violence victims only. For female victims, there are nearly 400 specialist domestic violence organisations providing refuge accommodation for women in the UK, with about 4,000 spaces for over 7,000 women and children. I suspect there are not sufficient spaces for female victims of domestic violence, but if there are 4,000 spaces for female victims of domestic violence, it follows that the 24 dedicated spaces for male victims of domestic violence clearly are not enough, when men make up a third of cases of people who suffer domestic violence.
What about the Government’s recent policy announcement to spend another £20 million on providing spaces, not for domestic violence victims generally, but specifically for female victims of domestic violence? The Government must not forget male victims of domestic violence either, and must provide suitable funding for them too, because they are getting forgotten about.
It is worth pointing out that according to the ManKind Initiative, male victims are over twice as likely as women—29% compared with 12% for women—not to tell anyone about the partner abuse they are suffering. Only 10% of male victims will tell the police compared with 26% of women, only 23% will tell a person in an official position compared with 43% of women, and only 11% will tell a health professional compared with 23% of women.
Mr Hollobone
My hon. Friend is making a very good point and I am sure the House will recognise that domestic violence against men is probably far more underreported than domestic violence against women, although of course all domestic violence is abhorrent. Another problem for men who have been abused is that all too often they are denied the right to see their children once the relationship breaks up, because the system is still biased—sometimes for understandable reasons, sometimes not—in favour of the woman, and this compounds the problem for vulnerable men who have been victims.
Philip Davies
My hon. Friend is right, and we must not forget fathers in the whole issue of bringing up children. As he says, in some cases it is perfectly right that the father, because of their behaviour, is denied access to the children, but in many cases it is not, and this is a massive problem for many people and is clearly one of the causes of the high suicide rate among men. It is not something that can be swept under the carpet. We must make sure that, where appropriate, fathers are given every assistance to have access to the children.
Joanna Cherry (Edinburgh South West) (SNP)
The hon. Gentleman will no doubt correct me if I am wrong, but I believe the criteria for deciding who has residence and contact in relation to children is the same in England as in Scotland, and it revolves around the best interests of the child, rather than the parents’ interests.
Philip Davies
I do not have time to have a philosophical debate—[Hon. Members: “It’s a legal debate.”] Well, it is a question of what is considered to be in the best interests of the child, and my point is that children having access to their fathers is in their best interests more often than the hon. and learned Member for Edinburgh South West (Joanna Cherry) indicated that the courts sometimes think. Children want access to their fathers, and in many cases they need such access. The whole point of being in this place is that when we think the law is wrong, we can do something about it.
Joanna Cherry
Is the hon. Gentleman aware of any empirical research that shows that the legal system in Scotland or England is biased against fathers? I am not aware of any.
Philip Davies
The hon. and learned Lady is trying to pretend that there is not an issue. I urge her to read the Library briefing, which she clearly has not done. Perhaps she will do us the courtesy of reading it before she—
Philip Davies
I am not giving way to the hon. and learned Lady again. If she does not think that there is an issue—[Interruption.] Does the hon. Member for Ealing North (Stephen Pound) want to participate in the debate?
Joanna Cherry
Is it in order for the hon. Gentleman to suggest that I have not read that briefing? When I asked him whether he was aware of any empirical research to back up an assertion he was making, he instead threw that back on to me and suggested that I had done something wrong. Is that in order?
Madam Deputy Speaker
That is not a point of order, as the hon. and learned Lady knows. The hon. Member for Shipley (Philip Davies) has not allowed her to intervene, but she has successfully put her view on record none the less.
Philip Davies
I am grateful to you, Madam Deputy Speaker. I did allow the hon. and learned Lady to intervene twice, but it was a shame that in both those interventions, she had nothing to say about looking after the interests of fathers or about the rights of men. Instead, she tried to make this into some kind of gender-bashing exercise, which did her no credit whatever. If she does not think that fathers have problems getting access to their children, sometimes unfairly, all I can suggest is that she gets out more—[Interruption.] Perhaps she might get out more in her own constituency.
Mims Davies (Eastleigh) (Con)
I congratulate my hon. Friend on securing this important debate. I shall be keen to bring up some issues from my constituency precisely because I have met people at my surgery who find it easier to approach a female MP who will perhaps give them a more empathetic hearing, and who have not felt able to talk to anyone else about the access to their children that they feel is being denied to them.
Madam Deputy Speaker (Natascha Engel)
Order. I must point out to the hon. Gentleman that he has now been on his feet for 20 minutes, which is the amount of time allowed for opening speeches. I am going to have to put an informal time limit on Back-Bench speeches in order to get everyone in, so I should be grateful if he would come to the end of his remarks.
Philip Davies
I am grateful to you, Madam Deputy Speaker. I have been trying to take interventions, but I will obviously abide by your ruling. I am also grateful to my hon. Friend the Member for Eastleigh (Mims Davies) for her intervention.
I shall now canter through a few other issues that I said I would touch on and therefore must. On homelessness, according to St Mungo’s, 85% of rough sleepers are men. That is clearly an issue that needs to be addressed. With regard to injustice for fathers, Erin Pizzey, the founder of the first women’s refuge in the UK, has said:
“There are a lot of reasons why fathers are not with their children, not least that women won’t let them”.
When the Minister for Vulnerable Children and Families, my hon. Friend the Member for Crewe and Nantwich (Edward Timpson), was introducing legislation in 2014, he said—[Interruption.] The hon. and learned Member for Edinburgh South West wanted some evidence, but she cannot even be bothered to listen to it now. The Minister said:
“We recognise that the court should already take account of the importance of a child’s relationship with both parents, but there is currently no legislative statement to that effect. We want to reinforce by way of statute the expectation that both parents should be involved in a child’s life, unless the child is at risk of harm or it is not in the child’s best interests.”––[Official Report, Children and Families Public Bill Committee, 14 March 2013; c. 289.]
The hon. and learned Lady wanted some evidence; there it is.
One of the aims of International Men’s Day is to improve gender relations, which I absolutely support. As I have said before, I want to be very clear that I do not believe there is an issue between men and women. I would actually rather we did not have to be here having this debate, and that we did not have separate international women’s and men’s days. The problem has been stirred up by politically correct people who want to make it a war on gender. In so many ways, considering men and women separately as though they lived in complete isolation is absolutely ridiculous. Neither group is isolated. Both sexes have mothers and fathers, sisters and brothers, uncles and aunts, grandmothers and grandfathers, sons and daughters, husbands and wives, and boyfriends and girlfriends. Every woman has related male parties and therefore a vested interest in men’s issues. That is an unavoidable fact. Some issues affect men alone or more than women and vice versa, but both men and women have an interest in such issues and in working together without politically correct gender splits. If we were able to do that in this House, that would be much better.
Madam Deputy Speaker (Natascha Engel)
I have just done a quick calculation and if everybody, including the Front-Bench speakers, takes about eight minutes, we will get everybody in. If anybody speaks for much longer than that, we will have to start cutting the limit, but if we stick to eight minutes, that should be fine.
Colleen Fletcher (Coventry North East) (Lab)
I certainly will not take eight minutes, Madam Deputy Speaker. I congratulate the hon. Member for Shipley (Philip Davies) on securing this debate on International Men’s Day. I recognise some of the important issues that the day seeks to highlight, particularly in relation to men’s mental health and wellbeing and tackling male suicide, which is the event’s chosen theme for 2016.
In truth, there is scarcely a more pertinent theme than “Stop Male Suicide”. The stark statistics highlight worrying trends and a growing crisis. It is worth taking a few moments to examine the shocking nature of just two of the headline statistics: suicide is the largest cause of death of men under 45; and the suicide rate for men is three times higher than that for women. Why is suicide becoming a highly gendered occurrence? The answer, in part, relates to how men are brought up to act and the roles, traits and behaviours that society expects of them. From an early age, boys are often subjected to pernicious masculine conditioning that demands that, rather than talk about their emotions and how they feel in times of difficulty or crisis, they should “man up”. They are told, “Boys don’t cry, do they?”
By adulthood those underlying societal expectations are so ingrained that for a man to show any sign of perceived weakness is viewed as a social taboo. Men’s reluctance to seek help and support when distressed adds to their vulnerability, with many instead preferring simply to bury their head in the sand or turn to drink or drugs despite the damaging effects on employment, personal finances, and relationships, and the social isolation, low self-esteem and homelessness, all of which are known to be common triggers associated with suicide. The inescapable truth is that if we are ever to tackle the high male suicide rate, we need to encourage men to start to talk about how they feel.
In Coventry, that encouragement and those conversations are being initiated by a new mental health awareness and suicide prevention campaign called “It Takes Balls to Talk”. The campaign is the brainchild of Alex Cotton, a mental health nurse and one of my constituents, and was launched last month. It is a public information programme targeted at male-dominated sporting venues across Coventry and Warwickshire and uses sporting themes to raise awareness of mental health support services. It seeks to reduce male suicide by encouraging men to talk about their feelings, and it aims to help men to understand that it is important not to keep their feelings to themselves, and to direct them to help and support, when they need it, in order to promote positive mental health.
“It Takes Balls to Talk” recognises how societal expectations have shaped men’s behaviour in how they deal with or, more accurately, fail to deal with their emotions, feelings and wellbeing. It plays a vital role in breaking down the barriers that prevent men from positively engaging with mental health services in the local area. This is of paramount importance as research shows that up to 85% of men who take their own life have not been reached by current public health messages and have never been known to mental health services. That statistic alone shows the importance that targeted initiatives such as “It Takes Balls to Talk” could make in changing the country’s appallingly high male suicide rates. After all, is that not what we are all striving for? We all want to see an end to a national tragedy that can be counted in the thousands of lives that are lost each year through suicide. We all have a shared responsibility to act, tackle this issue head on and ensure that no more fathers, sons, brothers or friends are stolen from us needlessly.
Sir Paul Beresford (Mole Valley) (Con)
I join in the thanks to my hon. Friend the Member for Shipley (Philip Davies) for launching this topic on what is probably an unsuspecting House.
Having recently had a small brush with the Committee on Standards in Public Life, I must declare some interests. One thing I will touch on relates to dentistry, and I still practise a tiny bit of dentistry. Then there is the obvious one: I am a male and a father of three sons, so I have a considerable interest in this particular subject. Even my wife says that I am overly interested in it.
My original thoughts on this topic are derived from a cover story in that highly respected weekly journal, The Economist. Its cover story, at the end of May last year, was entitled “The Weaker Sex”. As many members of the fairer sex, particularly my wife, my sister, my daughter and my daughters-in-law, point out, a superficial first glance would suggest that males’ domination of cultural and political life is secure. More than 90% of Presidents and Prime Ministers are male, as are nearly all big corporate bosses. Men appear to dominate finance, technology, films, sports and music. With that said, there is still plenty of cause for concern. Men tend to find themselves either at the very top or at the very bottom of our systems. They are far more likely than women to be jailed; more likely to be estranged from their children; and, as we have heard, very much more likely to commit suicide. Men earn fewer university degrees than women. Boys in the developed world are 50% more likely to fail maths, reading and science entirely.
Then we have the little issue of the human papilloma virus. Girls are vaccinated against it—this is to stop cervical cancer. It is unlikely that men will get cervical cancer, but they do get penile cancer. From my point of view as a dentist, roughly 40% of head and neck cancers are caused by the virus. More men get head and neck cancer than women, so why are we not vaccinating boys as well as girls? It is long overdue. The Australians do it; and if the Australians are doing it, we have just got to do it. These trends are particularly apparent in working-class men living in developed countries who have struggled to adapt to a hugely changed world and to the increasing changes to the job market in the past 50 years. The ever increasing power of technology and the ability to import more from abroad has seen a steep decline in the need for traditional muscle-based work in the United Kingdom.
By sharp contrast, women are becoming a majority in key areas such as healthcare and education. They are helped by their superior skills, which they gain because they respond better to education. As education has become more important, boys have fallen behind girls in school. The latest shock is in the theatre. The role of King Lear has been played by many male greats such as John Gielgud, Laurence Olivier and Donald Sinden, whom I knew so well, and many other superior male actors. Now that male role has been taken by our former colleague, or comrade, Glenda Jackson. Christopher Biggins’ Widow Twankey does not quite match that!
The way that males are becoming the weaker sex is seriously worrying. It is even happening in the Antipodes. In 25 years’ time, there is a possibility that the New Zealand women’s rugby team will beat the All Blacks—actually, realistically, that is probably a haka too far.
The article in The Economist that I mentioned says:
“Men who lose jobs in manufacturing often never work again. And men without work find it hard to attract a permanent mate. The result, for low-skilled men, is a poisonous combination of no job, no family and no prospects.”
The political consensus has been that economics is to blame for this situation. The argument goes that shrinking job opportunities for men are entrenching poverty and destroying families. In America, pay for men with only a high school certificate fell by 21% in real terms between 1979 and 2013; for women with similar qualifications, it rose—only by 3%, but it rose. Around a fifth of working-age American men with only a high school diploma have no job.
Part of the solution lies in a change in cultural attitudes, as the hon. Member for Coventry North East (Colleen Fletcher) mentioned. Over the past generation, middle-class men have learned that they need to help with childcare, and they have changed their behaviour, but, sadly, it appears from the Economist article and others that working-class men need to catch up. Women have learned that they can be doctors, dentists, surgeons, opticians, engineers and physicists without losing their femininity. Men need to understand that traditional manual jobs are not coming back, but that they can be nurses, hairdressers, waiters or—this is vital—primary school teachers. I visited a primary school today which has a totally female staff except for one male teacher. The headmistress spoke about the vital importance of a male role model in the school, which is missing from many other schools.
The most important focus must be reform of the education system, which is essentially still based in a pre-digital era where most male jobs were, as I said, muscle-based. We as politicians need to recognise that boys’ underachievement is a serious problem, and we need to sort it out now. Some sensible policies that are good for everybody are particularly good for boys. Early childhood education provides boys with more structure and a better chance of developing verbal and social skills. Countries with successful vocational systems, such as Germany, have done a better job than we have here in the UK. We need to reinvent vocational education for an age when trainees are more likely to get jobs in hospitals, IT or teaching than in factories.
The growing equality of the sexes is one of the biggest achievements of the post-war era: people have greater opportunities than ever before to achieve their ambitions, regardless of their gender. We have to accept that many men fail to cope in this world. When it comes to health, men really are the weaker sex. They are more likely to get cancer than women and are also more likely to die from it. They are more likely to suffer from heart disease, stroke and obesity. When it comes to happiness, women again appear to have the upper hand, to judge from the suicide rates. Experts know that men are particularly bad at seeking medical help, even when they need it. Men are still dying younger. In England and Wales, 42% of men die before their 75th birthday. The corresponding figure is 26% for women. I think about this every time I struggle to open a door for a lady.
It is very easy and tempting to blame men for the current position and to be fatalistic about it, but that is not the way forward. To put an absolute number on it, almost 100,000 men—enough to fill all the British Army’s full-time posts—are dying prematurely each year, compared with 66,000 women. Much of this is self-inflicted. As a group, men out-drink and out-smoke women. Men are also more likely to end their life violently in a car accident or, as has been mentioned, by suicide. Interestingly, the rates of suicide attempts do not differ between men and women; men are just better at it.
It is generally accepted that men are very bad at seeking help. Men visit the GP less because the health system is not working for them. It is not male-friendly. Could it be that aspects of our society have turned so far towards women that they are now against men?
Richard Arkless (Dumfries and Galloway) (SNP)
Despite the obvious sense of many of the contributions, I feel slightly uncomfortable with the subject of this debate. Although I recognise differentials in terms of suicide, the number of primary school teachers and perhaps even fathers’ residence rights, it is not women who caused misogyny, it is not women who caused the pay gap, and it is certainly not women who deprived women of the vote. Should we not be working towards equality, or am I just a man who cannot cry, or a feminist? I am not quite sure.
Madam Deputy Speaker (Natascha Engel)
Order. I just remind the hon. Gentleman that we have an informal limit of eight minutes. Nothing has been imposed, but he has been speaking for almost 10 minutes now, so if he could start coming to a conclusion, I would be very grateful.
Sir Paul Beresford
I think I will probably be one of the last men—certainly in my area and my family—to be called a misogynist. We are failing men; that is the point.
We have the Women and Equalities Committee, and I am sorry the Chairwoman is not here, but perhaps, under the equalities section of its remit, it could look into the issue of where we are failing men.
Margaret Ferrier (Rutherglen and Hamilton West) (SNP)
I extend my appreciation to the hon. Member for Shipley (Philip Davies) and others for securing this Backbench Business debate.
Quite often when we discuss gender issues, the focus seems to be on women. While that might be for good reason, it is vital that gender-based issues affecting men, or matters that may be more prevalent among men, are not overlooked. Today’s debate is important as it sends a strong signal to men everywhere that those issues are taken seriously in this place.
Though society has made great steps forward to break down deep-rooted patriarchal attitudes, we still have far to go. Sadly, it is still considered a societal norm to tell someone to “man up” if they are perceived as showing any weakness. Idiomatic terms such as that, or telling someone to “be a man about it” are a reflection of the roles many people—whether consciously or subconsciously—expect men to play.
In much the same way that misogynist values are challenged, perhaps we need to be a little more open-minded about what we view as misandrist. It is no wonder that we see negative consequences such as mental health problems and a high male suicide rate, which stem heavily from such gender-based attitudes.
Men’s health is worse than women’s everywhere in the world. Men have a higher incidence of heart disease, stroke, diabetes and obesity. In every country in the world, except China, where it is equal, the male suicide rate is much higher than the female rate. On average, male suicides outstrip female ones by a shocking ratio of three to one. In some countries, the ratio is even higher. In Russia, for instance, where constructs of masculinity are perhaps more akin to those in the UK several decades ago, male suicides outweigh women’s by six to one.
In the UK, suicide also disproportionately affects men. Some 76% of suicides are men, and suicide is the biggest killer of men under 45. It really is something we ought to discuss with greater frequency. It is not acceptable that, on average, 12 men kill themselves in the UK each day. Much more needs to be done in all corners of the UK.
In Scotland, the male-to-female suicide ratio is the lowest in the UK, yet that is nothing to celebrate, as it is still alarmingly high. Men in Scotland are roughly three times more likely to kill themselves than women. There is no simple fix for this problem; it is multifaceted, with many influencing factors.
This high suicide rate is more than a symptom; it should be an alarm bell warning us of what is truly an epidemic, and we really need to get a handle on the other issues that drive the ratio up. The hon. Member for Ealing North (Stephen Pound) mentioned the services of the Samaritans, and the hon. Member for Shipley welcomed his intervention as a public service announcement. There is also an organisation called Breathing Space, which can be contacted in Scotland on 0800 83 85 87.
We know that boys and men also face significant challenges at all stages of education, including in terms of attainment. Further to the health challenges I have mentioned, men also have a significantly shorter life expectancy.
There is still a stigma attached to male victims of violence, particularly domestic and sexual violence. Forced or arranged marriages—this is sometimes seen as a women’s issue—also impact on the men. Fathers who have separated from partners sometimes face significant parental issues, and certainly do not always have it easy. There is also a general, negative portrayal of men and boys.
While women have seemingly borne the brunt of our traditionally male-dominated society, it is important to recognise the ways in which this has hurt men too. Striving towards proper gender equality is not a case of taking power away from men and giving it to women, but rather addressing an imbalance and enhancing the roles that those of all genders and none have in society. This is not just academic; societies that are more equal tend to be happier and healthier. Gender equality is just one piece of the puzzle that needs to be tackled, along with, for example, other prejudice-based inequalities and income inequality. The road to equality takes many steps.
In 2014, the Scottish Government found that 81% of rough sleepers were men. Clearly, this is one issue that should be, and in Scotland has been, acknowledged. In 2012, the Scottish Government passed ground- breaking legislation that requires local authorities to provide every unintentionally homeless person with somewhere to live. The success of this legislation has gone some way towards addressing a major problem that disproportionally affects men. There remains much more to do, however. Each measure undertaken forms part of a wider picture and goes towards helping to address men’s issues.
I do not profess to have all the answers to this very complicated issue, but I do know that we need to work to acknowledge the issues affecting men and redouble our efforts to eliminate the stigma surrounding them. That is the starting point. For real and meaningful equality to be achieved, we must all be involved in this process of change.
Mims Davies (Eastleigh) (Con)
I congratulate my hon. Friend the Member for Shipley (Philip Davies) on securing the debate, which has highlighted some of the important issues that men face. I believe in equality. I spoke in the International Women’s Day debate—in fact, I had the pleasure of leading it—so I am being completely equal by turning up for this one today.
It is currently Movember, when brave men are selflessly growing their moustaches to raise awareness of men’s issues. I absolutely salute those people. I have noticed a limited number of those moustaches in the Chamber this year. I hope that this Saturday will make a real difference in raising issues that affect our men, such as male suicide, homelessness and health problems. I am in the Chamber because I was mentored and supported by a man into this role and this job. As we heard from my hon. Friend the Member for Mole Valley (Sir Paul Beresford), mentors are absolutely vital, particularly in primary school.
I am the chair of the all-party women in Parliament group. Last year, over 70 young women from across the country came to take part in a series of events to look at the opportunities for women in having a voice in this place and how that can make a difference. I absolutely believe that we can do the same thing in this debate today. I am glad to have heard all the contributions from Members on both sides of the Chamber.
Why do we need this debate? I am sure that when we came into work this morning we all saw homeless young men on the streets. If they were young women, perhaps with young children, would they go quite so unnoticed? We are all surrounded by men as fathers, grandfathers, brothers, husbands and dads, and we should be concerned about men’s health issues. As we have heard, the suicide rate of men in this country is three times higher than that of women. Sadly, I think we will all know a family friend or a member of our friendship group who has been affected by male suicide. I know one family, in particular, who have lost a son and a husband. That cannot be ignored. Life expectancy for men is too low at 79.
Sadly, obesity and other health-related issues among men are being ignored. One way of dealing with that is by raising such issues in the workplace. Are we offering people a chance to discuss at work issues that they may find more difficult to raise at home? How can we best support men and get them to talk more effectively? Perhaps the workplace is somewhere they feel unsafe, and they do not want to make a fuss or be seen as unmanly. Perhaps they do not want to speak about their feelings about things that are worrying them at home or, indeed, at work.
Bob Stewart (Beckenham) (Con)
I think that the armed forces are slightly ahead of society, because everyone who comes back from operational tours is debriefed, and checked for post-traumatic stress disorder and other worrying signs. That is great and we ought to extend that model to people who are at risk in society in general.
Mims Davies
I thank my hon. Friend for mentioning that. He is absolutely right. Work can have a huge bearing on family life. Stress from work comes home and some people have no outlet to deal with it. We are not supporting families and society as a whole.
The Samaritans hotline, which has been mentioned, is 116 123, and it provides an invaluable service 24 hours a day. The number now appears on train tickets. We have all had journeys home delayed because someone has been involved in a serious incident and has not made it home to their family that evening. Suicide is the biggest cause of death in men under the age of 50, so I am pleased that the Government have invested £1.5 million in supporting men and women who are at risk of suicide and self-harm.
However, as we have heard, we can do more, including by making the workplace safer. I recently visited a construction site in my constituency and saw posters about keeping sites safe and making sure that people feel safe when they go to work. If someone does not feel safe in the setting that they go to every day, and they feel under pressure because they have to support their family, they can end up in a very difficult and lonely place.
Margaret Ferrier
In my past life, I worked for a construction company. On health and safety, we always asked, “Would you like to be the person who phones somebody’s wife or husband to tell them that something has happened at work and they’re not going to return home?” Does the hon. Lady agree that it is important that we look at that area?
Mims Davies
Absolutely. Unsafe practices are a burden, particularly if there is no outlet to address them. The issue of health and safety at work can put pressure on men.
On loneliness, men and women, including the elderly, can feel a sense of isolation. I recently visited the Eastleigh Men’s Shed, a project set up in 2014 to bring men together to chat and engage in activities such as carpentry and bike repairing. The projects are brilliant. They make miniature Big Ben clocks, so Members can order some. They are available across Eastleigh, but there are also outlets in Andover, Romsey, Portsmouth, Havant and Bognor Regis. I thank Andi and the team for bringing together men who are perhaps lonely, or have caring responsibilities for loved ones and need support. There are some excellent organisations that help people to feel less isolated.
From our case work, we MPs get to highlight those issues that have been raised with us by men and women. We need a culture shift so that people feel that they can come and talk. Men need to be able to feel comfortable on the school run and at sports days and parents evenings. We must also salute men who are carers. I am often visited at my surgery by people who are worried about their wives or their disabled or autistic children, or those who are struggling to manage with a partner who has dementia or a long-term and chronic illness.
Where appropriate, we need to support our men, including by keeping families and children connected after marital or relationship breakdown. This is a watershed moment. I welcome the debate and the fact that such important issues have been raised in the Chamber. I vow, as a woman, to voice my support in this place regarding issues that affect both genders and all our communities.
Ms Tasmina Ahmed-Sheikh (Ochil and South Perthshire) (SNP)
Equality, of course, benefits everyone, so I welcome today’s debate and congratulate the hon. Member for Shipley (Philip Davies) on bringing it to the House. I am grateful for the work carried out by many people in my constituency and across the country to address the serious issues of inequality faced by men in many areas of their lives.
Men, of course, are a minority of our population. They live shorter lives, experience high levels of homelessness and suicide, and are less likely to seek help for issues relating to mental health and substance abuse. It is important that we seriously address those issues. For example, it is important to recognise the ways in which patriarchy hurts men. Toxic masculinity hurts men as well as women.
I am grateful for the work carried out by my hon. Friend the Member for Paisley and Renfrewshire North (Gavin Newlands), who is in his place and who spoke to The Huffington Post earlier this month for its #BoysDoCry campaign, examining the way many men find it hard even to talk about crying and the pressures on men not to seem vulnerable.
Stuart Blair Donaldson (West Aberdeenshire and Kincardine) (SNP)
My hon. Friend is making some excellent points. Will she join me in welcoming the launch today of the Be Real campaign’s body image pledge, which encourages industries such as fashion and music, among others, to portray realistic body images? Will she also join me in welcoming the fact that it recognises that body image anxiety is an issue not just for women but for men?
Ms Ahmed-Sheikh
I am very grateful to my hon. Friend for his timely intervention, especially given today’s release of information about that issue. I support that campaign wholeheartedly. Like the hon. Member for Eastleigh (Mims Davies), I was in the Chamber for International Women’s Day, just as I am for International Men’s Day today—although arguably 365 days of the year are international men’s days.
My hon. Friend the Member for Rutherglen and Hamilton West (Margaret Ferrier) touched in great detail and with much effect on the issues of suicide, educational attainment and homelessness, as have many other Members from across the Chamber. I seek simply to support all that has been said about that.
In every community in the country, volunteers and organisations are doing a fantastic and valuable job in addressing the issues that affect men. I am talking about organisations such as the Wee County Men’s Shed in my constituency. Men’s sheds have already been mentioned this afternoon. I know that there are plans to establish a similar group in Kinross. I have also had the pleasure of supporting the Man Up group in Hawkhill in Alloa, which is made up of local men who meet in a supportive, welcoming and encouraging environment to discuss issues that are important to them.
For equality to be achieved, we all have to be involved in the process of change—women and men alike. Although it is important to address the problems that men face, we must not attack work done to address institutional bias against women. We are in a situation where society has left us with institutional sexism—it is a matter of fact. There are more male Members of this House right now than there have ever been women Members. We cannot make a better, more equal world by saying that there are no ways in which our institutions hurt men, as that of course is not true, but what hurts men and women alike more than all the issues International Men’s Day exists to fight is the insistence that there is no sexism in society and that work to promote equality is an attack by one gender on another. That is why we need to look at the findings of the Good Parliament report, which addresses the ways that this House can become more inclusive for all.
The Scottish National party Government in Scotland have, since 2014, had a gender-balanced Cabinet and we have taken steps to increase representation, but this is not sexism; this is working on balance, because women face glass ceilings every day of their lives. Let us just say it how it is: there are some things we face equally as men and women in society, but so often women face additional challenges—misogyny, sexism and threats of sexual violence—and there is no level playing field. Men are very well represented in this Chamber, and I am very proud of the SNP’s women’s representation, which increased from one to 20 in last year’s elections; we are 36% women but 100% feminists on these Benches.
As women parliamentarians, we often face “mansplaining” —a term I have spoken of before. It was in evidence again in the exchange between the hon. Member for Shipley and my hon. and learned Friend the Member for Edinburgh South West (Joanna Cherry) when it was suggested that she had not read her brief. Any hon. Member will know that my hon. and learned Friend is perhaps the most briefed person who sits in this Chamber and she should be respected for being so. The volume and variety of farmyard-type noises tends to increase when women are on their feet in this Chamber, as do references to appearances and whether or not we have borne children—these things appear so often in the media.
I welcome the debate today and the thoughtful contributions that have been made so far. Addressing inequality wherever it lies, benefits us all, and we must not be hypocritical in that regard. If we believe in equality, it must be equality for everybody. So I do take issue with the hon. Member for Shipley, who voted consistently against equal gay rights and against laws to promote equality and human rights. I note that today he has watered down his comments from last year somewhat. He said today, “I want to be very clear that I do not believe there is actually an issue between men and women and that people try to be politically correct.” Last year, he said:
“I do not believe there is actually an issue between men and women. Often, problems are stirred up by those who might be described as militant feminists and the politically correct males who sometimes pander to them.”
He added:
“One of the most depressing things to happen recently was the introduction of the Select Committee on Women and Equalities.”—[Official Report, 19 November 2015; Vol. 602, c. 242WH.]
What a disservice to this Parliament. As if that was not enough, on Second Reading of the Equality and Diversity (Reform) Bill in 2011, he said:
“It is a massive step towards inequality for men, and the poor souls just let the women walk all over them. They do not appear to care what will happen to them.”—[Official Report, 21 October 2011; Vol. 533, c. 1195.]
At the international conference on men’s issues in 2016, he talked about
“equality but only when it suits”.
In that respect, I say to him, “Right back at you.”
This is an important debate. Respecting rights and equality for all has to be at the top of all that we do in this Chamber. [Interruption.] I am happy to take an intervention, because people are muttering from a sedentary position.
Mr David Nuttall (Bury North) (Con)
The hon. Lady has stood up and made some interesting points. Does she not accept that every time there is some positive discrimination in favour of a woman, by implication a man is being discriminated against, and it may well be a working-class boy or someone from a working-class background who suffers as a result of positive discrimination in favour of women?
Ms Ahmed-Sheikh
I am extremely grateful to the hon. Gentleman for his intervention. Although I accept some of the points about discrimination against working-class men, I have to say that coming from those on the Tory Benches, the comment absolutely beggars belief. Those of us who actually believe in equality prefer to use the term “positive action”. The reason why we need positive action is that there is not equality in our society. We are 52% women, but we cannot even be properly represented in this Chamber. I would welcome any efforts that he might wish to make, working with me and with others from the Conservative party and across the Chamber, to achieve gender equality, because gender equality will mean a better society for all.
Stuart Blair Donaldson
My hon. Friend is making some excellent points. Does she agree with me—I say this as the youngest male in this place—that men of quality do not fear equality for others?
Ms Ahmed-Sheikh
I welcome another excellent intervention from the youngest male Member of Parliament. Let the youngest male Member of Parliament be an example to us all, to show us that we can indeed fill these Benches with men like my hon. Friend who believe in equality and accept the fact that we do not have a level playing field.
I welcome the fact that many important issues have been discussed in today’s debate, but let us not allow that to overshadow or overtake the very real and accepted work that has to be done in this Chamber and across society to achieve equality for all—equality without hypocrisy—because equality is better for society and for everybody.
Paula Sherriff (Dewsbury) (Lab)
It is a pleasure to follow the SNP spokeswoman in this important debate. I congratulate the hon. Member for Shipley (Philip Davies), a fellow Yorkshire MP, on securing this debate in the main Chamber this year. As we have heard, International Men’s Day falls on 19 November, which is Saturday, and one of the themes this year is the high suicide rate among men. The Opposition welcome the opportunity to discuss seriously that issue and all other matters relating to the health and wellbeing of men and boys. We also recognise the opportunity that International Men’s Day presents to examine the societal pressures facing young men, particularly around body image and traditional ideas about masculinity, which can add a burden of expectation to young men and limit the psychological and physical horizons of both men and women.
I will first address the theme of International Men’s Day this year—namely, the high suicide rate among men—and then I will move on to address International Men’s Day in general. Simply put, the rate of suicide among men in this country is far too high. The rate of male suicide is more than three times the rate of female suicide. There are 16.8 male deaths per 100,000, compared with 5.2 female deaths per 100,000. Although it is true that suicide is the most common cause of death in men under the age of 45, the Office for National Statistics found that the highest rate of suicide actually occurs in men between the ages of 45 and 59, at 23.9 deaths per 100,000 according to 2014 figures. This is clearly a complex issue that can affect men of any age.
I am conscious that I may cover similar ground to last year’s debate in Westminster Hall, when male suicide was specified in the motion. I pay tribute to my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger) for her words as the then shadow Minister for mental health. In particular, she emphasised that “suicide is not inevitable.” By paying due attention to the societal and medical factors that can contribute to the increased risk of suicide and by ensuring that proper care is available when such factors arise, we can do much better. Unfortunately, we often fall short. Although we have made great inroads into understanding the various facets of the wider problem—the difficulties young men face with body image, the negative effects of unemployment on mental health, the greater propensity of men to abuse alcohol and drugs and the scale of the suicide epidemic in our prisons—we all too often fail to respond to such situations adequately in the areas of education, work and criminal justice.
Additionally, as my hon. Friend also mentioned in last year’s debate, we now understand that men tend to use more lethal methods in attempting suicide, so early and effective intervention in mental health is crucial. Sadly, the help that people need is often simply not there at the time they need it. My hon. Friend the Member for Kingston upon Hull East (Karl Turner) recently spoke very movingly in the House about the tragedy of losing his nephew to suicide after being told that he would have to wait for up to six months to access a talking therapy. It is a pain recognised by all too many families across this country.
We have found that accident and emergency departments continue to face unprecedented pressures, and we hear that many are now also facing closure. That is felt very acutely in my constituency. A&E is often the place where people find themselves when seeking treatment for a mental health crisis. Waiting times in excess of four hours, longer journeys to the nearest A&E department and a reported lack of mental health nurses all serve to present further barriers to people finding the help they need during a mental health crisis, with sadly predictable consequences.
I welcome the excellent speech by my hon. Friend the Member for Coventry North East (Colleen Fletcher), who referred to the “It Takes Balls to Talk” initiative in Coventry. I was fortunate to visit it recently with the Health Committee to hear about some of the fantastic work it is doing. It is true that such factors affect anybody suffering from difficulties with mental health, but the fact that the suicide rate is so much higher among men makes it all the more pressing for men’s health that these issues are tackled—and tackled soon.
I now turn to the issue of International Men’s Day in general. Labour Members welcome the day as an opportunity to highlight and have a serious discussion about the issues facing the wellbeing of men and boys. There are many challenges, such as the continuing battle against health conditions, such as testicular and prostate cancer, where it is recognised that there remains a reticence among some men about visiting a doctor to catch problems early. It is very timely that we should hold this debate in November—or Movember. There are also challenges about the educational attainment of boys in schools and the lack of men teaching, particularly in primary schools, as well as about the recognition of domestic violence towards men, as several hon. Members have said.
We also want to highlight the societal pressures involving body image, gender roles, and sex and relationships. Labour is committed to compulsory, age-appropriate sex and relationships education to promote gender equality, mutual respect and healthy relationships from an early age. This is also about ensuring that young men and women are educated in an atmosphere of mutual respect that broadens their horizons and does not pigeonhole them from the start of life. Although this would be of benefit to both young men and women, it should be noted that such pigeonholing is one of the many gender disparities that still predominantly affect women.
The fact that there are currently more male MPs in the House in this Parliament than the number of female MPs who have ever been elected illustrates that there is still such a long way to go. With regard to respect and healthy relationships, the fact that an average of two women in this country are killed each week by a violent partner or former partner illustrates once again that there is still much further to go.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
Does the hon. Lady agree that we are doing men a disservice if we do not address our shortcomings during this debate, given that men still perpetrate about 80% of all domestic violence cases? As we approach the international day for the elimination of violence against women, will she join me in calling on all male MPs to take the White Ribbon pledge
“never to commit, condone, or remain silent about men’s violence against women in all its forms”?
Paula Sherriff
I am happy to join the hon. Gentleman in that pledge. The White Ribbon campaign does some absolutely wonderful work, including in many schools. I am proud to support that initiative.
The continued existence of the gender pay gap, which we recognised in this place only last week, stands as a shameful testament to the inequalities still faced by women, as does the horrendous abuse I received on Twitter and by email for even daring to mention it. The Library tells us that a gender pay gap exists across all sectors of full-time work, some 46 years after the Equal Pay Act 1970.
These are not just issues for women. Organisations such as the White Ribbon campaign and the United Nations HeForShe campaign have capably demonstrated how men not only can but often actively want to play their part in fighting for the safety and equality of women. Indeed, the founder of the latter, Elizabeth Nyamayaro, has said that the campaign started from the mistaken premise that men might not be interested in gender equality, only to later find that the question was merely one of extent. Those positive programmes demonstrate that feminism and equality are not matters of interest to women only.
Although I have congratulated the hon. Member for Shipley on securing the debate, I do not think it would be unreasonable to suggest that he has made something of a name for himself in vociferously standing against feminism. He has gained notoriety in that regard, including by speaking this summer at an event organised by the Justice for Men and Boys party, which garnered media attention. I find that regrettable, as that organisation is sadly—I shall put this charitably—on the less constructive side of the argument.
The most cursory look at that organisation’s website brings a whole new meaning to the word “patronising”. It celebrates articles such as “13 reasons women lie about being raped”, and currently harbours awards including “Lying Feminist of the Month”, “Whiny Feminist of the Month”, “Gormless Feminist of the Month” and “Toxic Feminist of the Month”. As several of my hon. Friends appear to have been added to those lists for simply standing at this Dispatch Box doing what I am doing today, I dare say that I may well be at risk of ending up on one of them myself. Suffice it to say that I am not afraid. The nature of the organisation’s discourse is little better than that of the Twitter trolls who constantly confront female Members just for daring to speak up. I find the hon. Gentleman’s association with that organisation most regrettable.
I mention that not to detract from the issues raised today, but to highlight the fact that this event does not exist in a vacuum. Thanks to such rhetoric, there is a charged and poisonous atmosphere surrounding these issues, and I fear that many people will see International Men’s Day not as standing alongside International Women’s Day but as standing in opposition to it. We must send a message from this House that that is a false dichotomy that creates division where none need exist.
Many hon. Members have said this before me, but it is important to emphasise that equality is not a zero-sum game. The rise of feminism does not mean that men have been in some way denigrated or disfranchised. I hope that we all recognise that work remains to be done for both men and women, but that an improvement in the lot of one does not inherently detract from the rights of the other. In short, we should have no truck with those who would use this event to further divide us. I cannot say it better than the International Men’s Day website itself, which lists as two of its objectives:
“To improve gender relations and promote gender equality… To create a safer, better world; where people can be safe and grow to reach their full potential.”
In those objectives, it has our full support.
The Parliamentary Under-Secretary of State for Women and Equalities (Caroline Dinenage)
I congratulate my hon. Friend the Member for Shipley (Philip Davies) on securing this really important debate. I know that he, I and all the other Members who have taken part and spoken so excellently share the same conviction: that no one, whether male or female, should suffer unfair or unequal treatment because of their gender.
Such treatment can have devastating consequences for the lives of both men and women. Like other parents of sons up and down the country, I am aware of the challenges that boys face as they negotiate the road to manhood. We are at a moment in time when increasing numbers of people—men and women—are questioning a system of laws, norms and beliefs that have systematically disadvantaged women over centuries. But we sometimes forget that confining women within social norms also acts to confine men. Every restriction placed on the lives of women has had a consequence for the lives of men. Where women are told they are weak, men are told that they have to be strong and that there is something very wrong with them if they experience fear, vulnerability or emotion. Where women are told that they are naturally suited to childcare, then men are implicitly told that they are not. Where women are encouraged to be the homemakers, then the pressure falls on men to be the breadwinners.
The fact that men suffer from sexism is not a sign that the fight for equality has gone too far, but that it has not gone far enough. Gender equality is not, as the hon. Member for Dewsbury (Paula Sherriff) said, a zero-sum game where the gains of one sex can only be achieved at the expense of the other. Equality is good for all and for society as a whole. That does mean that people do sometimes have to give up privileges that have not been earned, but they have much, much more to gain from the creation of a fairer society for all.
I am not Minister for Women and Equalities because I am partisan to women, but because the key task in achieving gender equality is to establish a level playing field for women. That does not mean that we neglect the interests of men. I hope all here will agree that the introduction of shared parental leave was a huge step forward in supporting men to become more involved and fulfilled fathers. Our pioneering programme on homophobic bullying in schools benefits not just children who identify as lesbian, gay, bisexual and transgender, but all boys who have been insulted or assaulted because they were considered not sporty or manly enough.
Our innovative work programme on body image recognises that boys too can feel overwhelmed by cultural messages about how they are supposed to look and behave. I am as concerned as anyone when men’s eating disorders are referred to as “manorexia”, as that does not describe the severity and seriousness of the issue. Our new teen relationship abuse campaign, Disrespect NoBody, reaches out to all young people, deliberately moving away from images and text that imply that men are always the perpetrators of relationship abuse and women always the victims. We know that that simply is not the case.
I want to say a bit more about violence. I am hugely proud of the Government’s national strategy on violence against women and girls. We have made great strides, but there is a long way to go, particularly in tackling sexual harassment in public spaces and online misogyny. As my hon. Friend the Member for Shipley rightly pointed out, violence features in boys’ lives, too. As my son moves through his teenage years, I am acutely aware of how vulnerable young men are to assault on the streets and in pubs and clubs. I can only guess at how much fear and anxiety this causes boys and men. I say “guess”, because we very rarely hear men talking about those feelings. Why? Because of social norms that suggest that men should be powerful and invulnerable.
There is the expectation that men should not show how much violence hurts or scares them. They keep it bottled up. Even worse, they express it through depression, drinking or aggression. Maybe it makes it harder for them to stand up to other men who may be harassing women or belittling other men, and say, “This is not okay.” As my hon. Friend pointed out, many of the dreadful things that are happening to women are happening to men, too. Just because statistically there are much lower numbers does not mean they are any less important or should not be talked about. It does not mean that victims’ lives are any less valued.
Bob Stewart
I have sat here for most of the debate—I missed just the first two minutes—but I have not heard anyone talk about the strength that men and women get from being in a family, whether unmarried or married. Living with other people is a huge benefit. I just wanted to put it on record that family matters.
Caroline Dinenage
Of course, family does matter. What also matters is that victims can be male or female. In some instances, men are the hidden victims. Earlier this year, during International Women’s Day, the whole House listened in stunned and horrified silence as one of the hon. Members listed the names of every single woman who had been killed at the hands of a violent partner or ex-partner. There were 81 of them—every single life lost an absolute tragedy. In the same year, 19 men suffered that same fate. No one read their names out. That is not okay.
The UK has made a £36 million commitment towards efforts to end child marriage, early marriage and forced marriage overseas. As the hon. Member for Rutherglen and Hamilton West (Margaret Ferrier) point out, while the majority of those affected by child marriage are girls, UNICEF estimates that 18% of those married under the age of 18 are boys. That is not okay.
Crime surveys for England and Wales estimate that there were 610,000 male victims of domestic violence last year. I say “estimate” because, like many women, men are often reluctant to come forward and report crimes of this nature. And that is not okay. We continue to support front-line organisations working with male victims. The Home Office has extended £120,000 until April 2017 for the men’s advice line, which provides support and advice to male victims of domestic violence; while £90,000 has been provided to Galop to run a domestic abuse helpline for gay, bi and trans people affected by domestic violence and abuse. In 2016-17, the Ministry of Justice allocated £452,000 to 12 organisations in England and Wales to provide face-to-face services for male victims of rape and sexual violence.
Every time a little boy is told to zip up his man suit and be brave in circumstances where a girl would be cuddled or comforted, we are contributing to an ideal that a real man is fearless and emotionless. Most men treat this version of masculinity, which they see in characters in the media such as James Bond and those played by Steven Seagal, who are self-contained, aggressive, disconnected and always walking alone, with intelligence and resilience, but there are risks, particularly for the vulnerable and isolated, and these messages can be particularly toxic for men suffering from mental health issues.
We have heard a lot today about male suicide. Our national suicide prevention strategy highlights men as a high-risk group for what is perhaps the ultimate expression of despair, disconnection and aggression turned inwards. I am very encouraged by the work that the Department of Health has done with the National Suicide Prevention Alliance to identify innovative projects and to target mental wellbeing and suicide prevention support at men—projects such as the Men’s Sheds movement, which my hon. Friend the Member for Eastleigh (Mims Davies) has mentioned. I was there at the start of the Gosport Men’s Shed, which is now one of the biggest in the country. One gentleman there told me that it had literally saved his life.
In addition, the Department recently announced further financial support of more than £12.5 million over the next five years for the Time to Change programme, which seeks to bring attitudinal change towards people with mental health issues. Bottling up emotions and not being able to talk freely about feelings have implications not only for mental health but for physical health. Other Members have spoken about organisations such as the Movember Foundation and all the amazing men—and women—who attempt to grow moustaches in November, in order to raise issues such as prostate cancer that affect men and where early diagnosis and treatment can save lives.
I was going to speak about boys’ attainment in schools and justice in the family and criminal courts, but, in the interests of time, I will not. I will conclude by saying that my officials and the Government Equalities Office are there to tackle inequality wherever we find it, and we are actively exploring some of the issues touched upon today, in dialogue with groups such as White Ribbon, the Great Men initiative, HeForShe and Respect. These organisations do an enormous amount of good work, and I am confident that together we will make good progress in engaging even more men with gender equality.
And what of International Men’s Day? Of course it is a good thing. Anything that gets people to stop and think about equality and the inequalities we have spoken about today is important, and I will certainly consider all the points raised. Equality benefits everyone, and I hope that we can continue to share a constructive dialogue on how we can achieve a fairer, more just and kinder world for all.
Philip Davies
I thank everyone who has participated in this debate. We have heard some fantastic speeches. The hon. Member for Coventry North East (Colleen Fletcher) made a fantastic speech. I was very interested and pleased to hear about the excellent work of It Takes Balls to Talk. My hon. Friend the Member for Mole Valley (Sir Paul Beresford) made a typically fantastic speech, even though he had to admit that Australia was ahead of us in some ways. I am sure it was a painful thing for him to have to admit, but we are grateful to him for pointing it out.
The hon. Member for Rutherglen and Hamilton West (Margaret Ferrier) made a terrific speech highlighting the work that Breathing Space does in her area. I am delighted that she has had the opportunity to mention that. Likewise, my hon. Friend the Member for Eastleigh (Mims Davies) made a passionate and impressive speech, and again I am delighted that she was able to highlight Men’s Sheds and Movember, even though I will not be participating in the latter—much to everyone’s relief.
I am sorry that the hon. Member for Ochil and South Perthshire (Ms Ahmed-Sheikh) rather trivialised today’s debate by talking about women instead of men. I am sure the fact that she thinks international men’s day is every day is very little comfort to the 134,554 men who have committed suicide over the last 30 years. I found that regrettable.
Finally, I am pleased that we agreed on one thing—equality. I believe in gender equality, and I very much hope that after this debate, men and women will be treated equally by the courts when they get sentenced.
petition
(7 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text
Tom Tugendhat (Tonbridge and Malling) (Con)
The post office in Tonbridge provides an accessible service to people across our community, and closing it would deprive residents of our growing and thriving town of the central services and support that this stand-alone Crown post office provides. That is why more than 1,000 people have signed a petition calling for the decision to be reversed.
The petition states:
The petitioners therefore urge the House of Commons to note their objections to the proposed closure by Post Office Ltd of the existing stand-alone post office on Tonbridge High Street and its proposed relocation within another existing local business.
Following is the full text of the petition:
[The petition of residents of the United Kingdom,
Declares that the proposed closure by Post Office Ltd of the existing stand-alone post office on Tonbridge High Street is unacceptable; and further that the post office should not be relocated within another existing local business.
The petitioners therefore urge the House of Commons to note their objections to the proposed closure by Post Office Ltd of the existing stand-alone post office on Tonbridge High Street and its proposed relocation within another existing local business.
And the petitioners remain, etc.]
[P001979]
Maxwellisation Process
(7 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Roger Mullin (Kirkcaldy and Cowdenbeath) (SNP)
It is indeed an honour to serve under your chairmanship, Madam Deputy Speaker. One thing I know about your good self is that any interventions or judgments that you make in the course of the debate will be both independent and timeous—matters not unconnected to this debate. I say from the outset that my intention is to raise an important matter for discussion. I do so with humility. I do not pretend that I have all the answers, which may come as a major shock to many of my hon. Friends.
On a number of occasions here, I called for the early publication of the Chilcot report. I was met with sympathy from the Government, but it was clear that one reason for such a long delay in the publication was the Maxwellisation process that Sir John Chilcot chose to follow, when there was no statutory requirement at all for him to do so. It is also very clear that there has been a gradual adoption of the Maxwellisation process in areas of investigation and reporting which fundamentally calls into question whether reports are, in fact, truly independent.
In response to a query from my hon. Friend the Member for Paisley and Renfrewshire North (Gavin Newlands) a short time ago, and to put it in layman’s terms, I should say that Maxwellisation is the process of sending extracts of reports to individuals who are criticised in some way, allowing them in many cases an extraordinary length of time to respond. We then are blind as to how far their responses lead report authors to change their judgments. This is not just a process of checking the facts, as competent inquiries will check the facts as they go along. This process allows individuals facing criticism to challenge the interpretation and judgment of report authors. That is a fundamental undermining of the independence of those report authors and it does a disservice to the House.
My own background makes me rather sceptical of, and concerned about, the approach. For well over 30 years, I ran a series of small research companies, and we were often commissioned to undertake investigations into organisations of many sorts, often involving the behaviour of groups that were undertaking activities that were disadvantageous to the organisation or the wider society. It would not be unreasonable to say that all my past clients valued the fact that at the end the day they knew they would be getting my conclusions and my recommendations alone. They might have gone on to criticise and debate those recommendations or amend them, but what they valued most was that somebody was investigating a situation and was willing to draw conclusions independently that could then set an agenda for others to pursue.
In another part of my life, I was sometimes involved in academic research. Much of the greatest academic research that is undertaken in, for example, the social sciences explores the role of human behaviour, often citing individual instances, but there is no requirement for academic authors to return to the individuals dealt with in their studies and ask them to comment on their interpretations. Indeed, that would be considered bad practice, as it would undermine their academic freedom. When it comes to politics, however, over the years we have developed for the House of Commons a process that allows people who are subject to criticism to be the only ones who are given sight of what is going to be said, and the only ones who are allowed to respond to authors.
Why has this issue arisen? Originally, the so-called Salmon letters emerged from an inquiry undertaken by the Royal Commission on Tribunals of Inquiry, which reported in 1966. The letters were intended to warn individuals of criticisms and give them an opportunity to respond, but the procedures set out by Lord Justice Salmon were heavily criticised for being more suited to an adversarial trial than to an inquisitorial process.
Then, some years later, along came that corporate crook Robert Maxwell. Maxwellisation developed from a judgment in a private action brought by him against the Department of Trade and Industry. Maxwell applied for an interim injunction to restrain inspectors from proceeding with their investigation. Mr Justice Forbes declined to grant the injunction, but said that natural justice demanded that draft conclusions that were critical of a person should be submitted to that person to give them an opportunity to respond. Maxwell then took legal action directly against the DTI. Mr Justice Wien found against him, and an appeal ensued.
Lord Denning, Master of the Rolls at the time, was one of the judges who heard the appeal against the second judgment, and he upheld Mr Justice Wien’s conclusions. Despite that, the myth has arisen that Maxwellisation developed as a result of a victory in court by Maxwell, although in fact he continually lost, and that Maxwellisation is a legal requirement, which it is not, although many people think it is. It is simply a kind of convention that has been adopted but has no legal force.
Creeping Maxwellisation has been leading to concerns in different areas. I have cited Chilcot, which was not a statutory inquiry but a Privy Counsellor inquiry established by my predecessor as Member of Parliament for Kirkcaldy and Cowdenbeath, but, more recently, the Treasury Committee has shown considerable interest in the subject. In April this year, it announced an inquiry into Maxwellisation. Its Chair, the right hon. Member for Chichester (Mr Tyrie), has been quoted as saying:
“It took seven years for taxpayers—who had to foot the £20.5 billion bail-out of HBOS—to obtain a full explanation of HBOS’s failure. Serious management, governance and regulatory oversight failures all contributed to the bank’s collapse. The seven year wait was prolonged”—
seriously prolonged—
“by Maxwellisation. The public will want reassurance that Maxwellisation is fair and proportionate, and does not lead to unacceptable delays…Maxwellisation was never intended to be a means by which interminable argument would develop about every last detail of a regulator’s report. To permit that would undermine confidence in the public review process.”
Indeed, it is perhaps not unreasonable of me to speculate that the lack of action against some rogue bankers was made easier by the absence of robust, independent reports.
One concern for those in favour of the process of Maxwellisation is that without it some individuals might be exposed to defamation action. I am guessing this might be a concern both for some individuals who are cited in reports in a critical way and for the report authors. However, I believe there is a means to bring Maxwellisation to an end without opening the prospect of defamation proceedings, thereby assisting both in having reports published more quickly and having greater confidence in their independence.
My understanding is that the best way to evade the legal difficulties raised by making criticisms of individuals without giving them the right to the process of Maxwellisation is to make the report of any inquiry a so-called return to Parliament. This was the case for the Scott and Hutton inquiries for instance. This ensures that the report enjoys the protection of the Parliamentary Papers Act 1840 and is subject to privilege. It is quite clear to me that there has been utterly inadequate scrutiny of the Maxwellisation process.
It is with great regret that I have to say that over many months I kept asking, very often at Business questions, “Where is the Chilcot report?” Many other Members were asking the same question. I am very sad now that I was unaware that there were ways in which we could have avoided this. I was unaware that Chilcot did not need to invoke a Maxwellisation process; it was simply his personal choice as chair of that inquiry. I think the time is coming when the Government need to think very seriously about whether this House is well served by a process that undermines the independence of reports brought it.
As I move towards a conclusion—I want to allow the Minister sufficient time to respond—I shall quote the journalist Chris Ames, who followed the Chilcot inquiry and wrote extensively on Maxwellisation. He feared that independence was being subverted in another way:
“Although the inquiry began in 2009, and all witnesses have had years to bring evidence to its attention, it appears that Maxwellees have been allowed to read and cite other confidential documents, besides those cited by the inquiry. Have any conditions or limitations been imposed on this exercise?”
We do not know. He continues:
“Without them, there is a clear risk that it could turn into an unlimited fishing expedition by Maxwellees in pursuit of material which would help their defence.”
How much new material they introduced into the process we still do not know.
In a former life—I have had many—I taught in the area of judgment theory. Those who have researched judgments know only too well that if we allow simply a one-sided process for people only to search out the evidence that suits them, we cannot have a balanced view. We cannot have confidence that we have a balanced view if the only people who were asked to submit to the report’s authors were those few who were criticised, but those who would make criticisms did not have the same rights of review, let alone, in the instance of Chilcot, the families who suffered the grievous burden of Iraq having the same rights as those criticised.
Richard Arkless (Dumfries and Galloway) (SNP)
Does my hon. Friend agree that if the primary concern about Maxwellisation is the prospect of defamation, and defamation cannot happen unless the statement is false, would not one solution be that public inquiries get protection from defamation? Under Maxwellisation, the offended party could simply say, “It wasn’t me, guv” and persuade that there is an action for defamation, and then all those allegations fall. There is a simple solution, is there not?
Roger Mullin
I defer to my hon. Friend, who is a distinguished lawyer trained in both the Scottish and English jurisdictions. I would hesitate to criticise him at all. It strikes me that he is making another intervention on a reasonable point that the Government should consider. I hope that the Minister will respond in the same spirit and let us seek solutions that will allow us to preserve the independence of reporting to this House.
The Parliamentary Under-Secretary of State for Justice (Dr Phillip Lee)
I congratulate the hon. Member for Kirkcaldy and Cowdenbeath (Roger Mullin) on securing the debate. When the Government decide that an inquiry is needed to investigate a matter of public concern, they will generally begin by asking whether it should be held under the Inquiries Act 2005 and use the Inquiry Rules 2006. Inquiries can be non-statutory, as was the case for the Iraq inquiry. Inquiries may also be established under specific legislation such as the Financial Services Act 2012. However they are constituted, inquiries perform an important role of holding public bodies to account, and providing answers to issues and events of concern. I agree with the hon. Gentleman that an inquiry and its eventual report must be, and must be seen to be, independent of the Government.
The principle of Maxwellisation allows those at risk of criticism in an official report to respond before that report is published. The process takes its name from Robert Maxwell, who was criticised in a Department of Trade and Industry report as being
“unfit to hold the stewardship of a public company”.
He took that matter to court and in fact lost his case, but the Court of Appeal reaffirmed that the principles of natural justice require prior notice to be given of actual or potential criticism so that an individual can be given a chance to respond. There are also what are known as Salmon principles, which came from Lord Justice Salmon’s 1966 royal commission on tribunals of inquiry. The second principle states:
“Before any person who is involved in an inquiry is called as a witness, he should be informed of any allegations which are made against him and the substance of the evidence in support of them.”
This means that when someone gives evidence, the inquiry chair should notify them in advance if they are at risk of criticism, and of the reasons for it, so that they can address those issues when they give their evidence.
We all want the warning letter process to be handled as quickly as possible, but I do not share the concern that it can affect the independence of an inquiry’s findings and report. The Government believe that the process is fair and transparent, and that it does not prevent an inquiry from producing an independent and robust report.
Roger Mullin
Am I correct in interpreting the Minister as saying that he does not believe there is a case for setting a time limit for this process? I am sure he is well aware that one of the criticisms of the Chilcot inquiry, and of the HBOS inquiry that I cited earlier, was that people took an interminable amount of time to respond. Surely it would be reasonable to establish a protocol to ensure that the process is not dragged out unnecessarily by those who are subject to criticism.
Dr Lee
The Maxwellisation process in the Chilcot inquiry did take a long time, but in response to the hon. Gentleman, I should like to quote Sir John Chilcot. He has stated:
“The Maxwell process, first, was essential, but secondly, did not hold up the rest of the work. While we had draft text out for comment from criticised witnesses, we were doing all sorts of other work to finalise the report...I think that it did, in the end, prove a constructive dimension to the Inquiry’s work.”
As I was saying, we all want the warning letter process to be handled as quickly as possible, but I do not share the concern that it can affect the independence of an inquiry’s findings and report. The Government believe that the process is fair and transparent and does not prevent the inquiry from producing an independent and robust report. Furthermore, under the 2005 Act, the chair has a duty to have regard to fairness and must be impartial. There is nothing in the Act or rules that requires a chair to change their report in the light of any representations received from an individual. The purpose of the warning is not to seek a person’s consent to what the chair is minded to say about them. I am confident that inquiry chairs take a sensible and robust approach that does not allow for abuse of the process, and I am also confident that they will continue to do so.
The Lords Select Committee on the Inquiries Act 2005 published its findings in March 2014. The report cited evidence on the warning letter process from inquiry chairs such as Sir Robert Francis, QC, the chair of the Mid Staffordshire inquiry. He said:
“Some recipients asked that they be given sight of any revision of the potential criticism before publication of the Inquiry report. I declined to do so; first because the Rules do not provide for such a facility, and second because it would have been impracticable and undesirable.”
It is therefore clear that inquiry chairs are adequately equipped to deal with inappropriate requests and that the process does not mean that there needs to be endless back and forth until the recipient is happy with what will be said.
On 2 November 2016, when giving evidence to the Liaison Committee about the Iraq inquiry, Sir John Chilcot said:
“in the pursuit of fairness, and also in the pursuit of getting the best possible quality of report, the Maxwell process, far from holding up the show, actually improved the eventual outcome. For example, our attention was brought to documents that had not been either disclosed or discovered in the course of our other evidence-taking and that were relevant. Then again, where you get two individuals’ perspectives on the same point, and they are not the same perspective, it is very helpful to know that and to be able to either come to a conclusion about it or, as we did in one case, simply point to the fact there is a clash of evidence which couldn’t be resolved.”
Richard Arkless
While the Minister is making points about the virtues of Maxwellisation in certain circumstances, is he able to say whether Maxwellisation in the case of the Chilcot report meant that the original findings were diluted to what we saw in the final report?
Dr Lee
The Government cannot speculate on the extent to which the report was modified as a result of Maxwellisation. It was a confidential process between the independent inquiry and those individuals subject to the process. However, as I said, Sir John Chilcot said in evidence to the Liaison Committee:
“in the pursuit of fairness, and also in the pursuit of getting the best possible quality of report, the Maxwell process…actually improved the eventual outcome.”
I firmly support the Maxwellisation principle. Those criticised in a report must be made aware of that before they read about it in the newspapers. Criticism could have an impact on their livelihood, or there may be a risk of later legal action. Of course, in many cases, individuals may already be aware of the criticism, although they might not be aware of its extent or seriousness. Equally, the criticism might never have been raised, so it is only right that individuals are given a chance to respond before publication. However, I absolutely agree that the process should be neither over-bureaucratic nor cause delay.
The Government recognise that it can be hugely difficult for families involved in inquiries to understand the various processes. They should feel confident that processes and the inquiry report are transparent and independent of the Government. The current system achieves that, but there is room for improvement. The Lords Select Committee also raised concerns about delays, requests for redrafts and an over-prescriptive process. We have been considering its recommendations about the warning letter process under the 2006 rules. We agree that chairs need more flexibility while ensuring that those who are unaware of criticism, or its extent, have prior notification and a chance to respond. I hope that my remarks provide reassurance that while we are clear that Maxwellisation is a key element in inquiries, it must be a simple process that does not adversely affect their independence or add significantly to their length.
Question put and agreed to.
Draft Double Taxation Relief and INternational Tax Enforcement (Turkmenistan) Order 2016
(7 years, 5 months ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Financial Secretary to the Treasury (Jane Ellison)
I beg to move,
That the Committee has considered the draft Double Taxation Relief and International Tax Enforcement (Turkmenistan) Order 2016.
Good morning, Mrs Gillan, and colleagues. The draft order deals with a first-time double taxation agreement with Turkmenistan. Currently, Turkmenistan is honouring the treaty between the UK and the Soviet Union. Following an approach from Turkmenistan, we agreed to enter into negotiations for a replacement treaty.
Turkmenistan recognises that a modern treaty would benefit its growing economy, which also offers important opportunities for UK business. We recognise that ex-Soviet states will want to renegotiate treaties to reflect their own circumstances and opening economies. The Turkmen approach followed the OECD model approach in most respects. This, together with a fairly conventional tax system, enabled us to reach an agreement in two short rounds in 2011 and 2012. We have ended up with an agreement that we can be pleased with. It contains none of the provisions favoured by some capital-importing countries such as source state taxation of services and gains on shares, which do not form part of our preferred approach. We have agreed our anti-treaty-shopping measures and confirmation of the availability of benefits for UK pension schemes and charities. The treaty also contains the latest OECD exchange of information article.
Withholding rates are higher than our preference and show an increase over the rates provided for in the Soviet Union treaty. However, they do provide for a reduction on the domestic rates levied by Turkmenistan and reflect a reasonable compromise for a treaty with a developing nation. Turkmenistan has already completed its ratification procedures, and approval of the order today would permit the provisions of the agreement to take effect from 1 January next year. I hope my explanation has been helpful and I commend the order to the Committee. I am happy to try to answer any questions that hon. and right hon. Members might have on its provisions.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
I want to start by thanking the hard-working staff of Her Majesty’s Revenue and Customs who have put so much work into drawing up the treaty we are discussing. My understanding is that the double taxation treaty is part of an ongoing process of negotiating taxation treaties with the post-Soviet countries. Until now, arrangements have followed treaties signed with the USSR, so I am glad that we have the opportunity now to scrutinise the new proposals, which ought to reflect the modern relationship between our two countries. I will put a few questions to the Government in that regard.
Assuming the treaty is passed into law, if a company based in Turkmenistan pays dividends to a resident of the UK, either 5% or 15% of the gross amount of the dividend will be taxed. I say either 5% or 15% because it depends on the nature of the relationship between the recipient and the company. Similarly, interest or royalties arising may be taxed up to a maximum of 10% in the country where the company is based. There are similar provisions for capital gains tax, employment income and so on.
The explanatory memorandum refers to the fact that the UK’s double taxation treaties largely follow the approach recommended by the OECD’s model tax convention. It would be useful to know whether any aspects of this treaty deviate from the OECD’s model tax convention and, if so, which they are. Furthermore, in what aspects does this treaty differ from the United Nations model double taxation convention?
Article 21 of the statutory instrument lays out the allowance of a deduction from a Turkmen resident’s tax bill equal to the amount due in tax in the UK. The provisions for the equivalent deduction for UK taxpayers appear to be rather more complicated. Will the Minister briefly explain the reason for that?
Moving on to the overall effects of the treaty, it will be useful to have some clarity from the Minister on what effects she envisages arising from its implementation. The explanatory memorandum for this order states that the provisions of the arrangements have no impact on the public sector. The same document states that those provisions do not introduce new tax burdens; rather, they provide relief from tax and thus are of benefit to businesses “both large and small”. How much relief will be provided and how much will be lost to the public as a result? Is the net tax impact on the UK likely to be positive or negative?
I understand that precise calculations are difficult, but does the Treasury have any estimates of the broad effects for the Exchequer? How are such estimates reached? The explanatory memorandum states that the arrangements will benefit businesses both large and small. The Opposition’s role in scrutinising such arrangements, even though they may not technically be deemed of a regulatory nature, is certainly made more difficult by the absence of an impact assessment. Hon. Members may remember that in a debate in the summer on a number of double taxation treaties, Labour raised the fact that the Government had not prepared a tax information and impact note. For this order, the Government have again stated that an impact assessment has not been prepared, because double taxation agreements are not regulatory in nature. I put it to the Minister that that response does not seem in keeping with the general principle of impact assessments. Surely the precise legal framework is less important than giving transparency to the proposals so that taxpayers can have a better idea of what the treaty will mean.
According to the Government’s explanatory memorandum, the provisions of the order will
“serve an Exchequer protection role by including provisions to combat tax avoidance and evasion—partly by measures providing for the exchange of information between revenue authorities… They also encourage and maintain international consensus on the appropriate tax treatment of cross-border economic activity and thus promote international trade and investment.”
Will the Minister briefly elaborate on that? More generally, will she give assurances that the treaty will not create or increase any opportunities for tax evasion or aggressive tax avoidance? How does a treaty such as this one fit into the Government’s plans for tackling tax avoidance in a broader sense, and in particular on any plans they have to follow up on their commitment to confirming the UK’s leading role in addressing tax evasion and avoidance?
Hon. Members will be aware that my right hon. Friend the Member for Don Valley (Caroline Flint), supported by Labour Front-Bench Members, has already provided an opportunity to show such leadership via the principle of public country-by-country reporting. It would be good to hear of any progress that the Government are making in that regard.
I expect the Minister is well aware of the work of ActionAid to expose how some companies have used tax treaties to avoid paying their fair share of tax anywhere, to reduce their tax bills massively or to move money from poor to rich countries, exacerbating global inequality. Will she tell us how this treaty will be judged against each of those criteria?
The priorities for Opposition Front-Bench Members are to ensure that the new arrangements benefit this country and Turkmenistan, as well as strengthening the principles of fairness and transparency that ought to be at the heart of our tax system. The purpose of these treaties ought to be to create certainty about tax treatment, which would benefit businesses and their staff in both countries, as well as to combat tax evasion and aggressive tax avoidance. I hope that this treaty will deliver that and that I can get some answers to my questions today, but otherwise I will be more than happy for the Minister to write to me at a later date.
George Kerevan (East Lothian) (SNP)
I echo the sentiments expressed by the hon. Member for Stalybridge and Hyde. There is growing concern among non-governmental organisations in the development field that some double taxation treaties have been inimical to the developing countries concerned and have made it less easy for them to take a fair share of tax from multinational companies that operate in their jurisdiction. That is a reasonable proposition; all I am suggesting is that Ministers should consider it as one aspect of how the treaties are put together. We are therefore a little unhappy not to get the impact assessment, which would at least put the issues out in the open for us all to see. I plead with the Government to give us such impact statements, in this instance and in future instances.
My hon. Friend the Member for Kirkcaldy and Cowdenbeath (Roger Mullin) is pursuing a private Member’s Bill that would place a statutory duty on Ministers to take into account the impact on international development of future double taxation treaties, so this is a live issue in the House. Will the Minister tell us whether there were any discussions about development issues in the negotiations over this treaty? Were there any discussions with NGOs and agencies in Turkmenistan in the run-up to the finalisation of the draft order?
Robert Flello (Stoke-on-Trent South) (Lab)
I will not delay the Committee too long, but I wish to clarify a couple of points and build on some of the questions asked by my hon. Friend the Member for Stalybridge and Hyde.
It would be very helpful to have some information on the scale of UK involvement in Turkmenistan. My hon. Friend asked about the potential loss or gain to the Exchequer. As the Minister said in her comments, Turkmenistan wishes to expand its own economy. It would be helpful to understand what that means in terms of how many British businesses and individuals are in Turkmenistan and, conversely, how many members of the Turkmenistan population in the UK are active in business or commerce more generally. How many of their companies are here? That would give us the scale of the issue. It would also be helpful to understand the trend. Has that number remained static for a few years or has there been an increase?
How confident is the Minister that the Turkmenistan tax authorities are as rigorous as we generally hope and expect Her Majesty’s Revenue and Customs to be? The statutory instrument deals with enforcement around compliance. Are we confident that the Turkmenistan tax authorities will be strict in ensuring that businesses and individuals will be compliant with their requirements?
A point already discussed at some length, but which bears repeating, is that of the words that we use every day. It seems very strange that the last line of the explanatory memorandum on a piece of legislation that is by its very nature regulatory would state:
“An Impact Assessment has not been prepared for this instrument because double taxation agreements are not regulatory in nature.”
It is regulatory—that is its nature—and therefore an impact assessment would have been a very good thing to have, if only because it would provide a little bit more of that bright sunshine that disinfects things and shows them up. I look forward to the Minister’s answers on those issues.
Jane Ellison
I will try to answer as many questions as I can; there was quite an array. We are straying into more general concerns on the relationship between the UK and developing countries and double taxation agreements. I am familiar with the private Member’s Bill that is being proposed. Let me say a few general words; I will try to cover some of the specifics, but I may have to take up the shadow Minister’s invitation to write to him if I cannot cover all the questions.
The UK enters into double taxation agreements because they are mutual agreements. Countries are not pressured to sign them; they are signed because they are in the interests of both countries and are increasingly recognised to be so. I understand there is NGO concern and we will no doubt come to debate that a bit further in due course, but I do take the issue seriously. I have signed a couple of double taxation agreements myself in the past few months and I take the opportunity to talk to the people I am signing them with about what they see as the advantages for their country.
Although I welcome the scrutiny of NGOs, I sometimes think that their concerns are perhaps a little misplaced. These are mutually negotiated agreements entered into freely by both countries and the negotiating capacity of many of the countries we are dealing with, even developing ones, is very considerable. Occasionally, I worry that that is a little understated or underestimated by those with such concerns. I reassure the hon. Member for East Lothian that we take the issue very seriously.
The Government are engaging with Turkmenistan to promote and protect British interests and values. It is a Foreign and Commonwealth Office human rights priority country and it is a key objective to encourage the Turkmen Government towards democratic reforms and to implement their international human rights commitments and obligations, as well as to improve the investment climate for UK businesses. Those things go very much hand in hand. A country that respects human rights, the rule of law and all those things is a good place in which to do business. Doing business in a country often drives development and drives the opportunities to advance British values—those two things are very closely linked. We are supporting and encouraging Turkmenistan’s contribution to regional prosperity, stability and security, including in respect of UK objectives in Afghanistan and the wider region.
A number of questions touched on the scope for further commercial engagement. There is plenty of scope for further UK commercial engagement in Turkmenistan, particularly in the oil and gas sector, and this agreement will help our efforts to promote those increased commercial opportunities in a more transparent investment climate. Transparency of investment climates is often at the heart of the benefits of such agreements.
On the economic and revenue effects, my right hon. Friend the Chief Secretary has previously informed the House that it is difficult to provide sensible estimates of the revenue effects of DTAs. It might be that in a particular case there is a short-term revenue gain or loss, but even then it would be hard to quantify. Such agreements are essentially strategic and are not meant to achieve a particular short-term outcome, so concluding one is not a zero-sum game.
It is possible that short-term revenue effects will be augmented or balanced by longer-term increases in activity as companies and others respond to a more favourable business climate and the greater certainty that a DTA can provide but, because of such movement over time, the effects are hard to quantify. The complex and shifting interaction of the laws in our country and the laws of the country in question also makes it difficult to give meaningful estimates. Successive Governments have not tried to give such estimates, so we are not unique in not trying to estimate the impact other than to say that by signing the agreement both countries believe it is in their mutual long-term interest—we would not be doing it otherwise.
That brings us to impact assessments. We have not produced an impact assessment because DTAs impose no obligations on taxpayers, rather they give UK residents relief from foreign tax in prescribed circumstances and provide relief from UK tax for non-residents in comparable situations. That is not new. There was a written ministerial statement in March 2011, after impact assessments were introduced, in which my predecessor gave details on exceptions from the requirement to publish an impact assessment, and secondary legislation enacting double taxation treaties was listed among those exceptions. We have taken a consistent position because of the nature of where the impact is felt.
By governing the taxation of cross-border income flows and eliminating double taxation, tax treaties promote international trade and investment. That long-term picture leads to sustainable tax revenues. One reason such treaties are important in financing development is the certainty they give.
NGOs often bring up the difference between the OECD and the UN models, and we cleave more closely to the latter. This treaty follows the OECD model, not the UN model, however the models are similar in nature. The treaty does not include an arbitration article, as Turkmenistan does not include such articles in its treaties—that is one variation.
I have mentioned the opportunities that the treaty offers for businesses operating overseas. I can give the assurance that the treaty with Turkmenistan prevents UK businesses from being disadvantaged in comparison with competitors from countries that have treaties in place. Of course, we are not the only country with which Turkmenistan, and indeed other countries, is looking to update its agreements, particularly given the different circumstances in which it finds itself today compared with its time as part of the USSR.
A question was asked about the Double Taxation Treaties (Developing Countries) Bill, which is due to have its Second Reading on 16 December. I look forward to debating that private Member’s Bill further, and I hope to give further assurances because I am aware of the interest of ActionAid. In the case of one country on which that NGO is particularly focusing, I have had useful discussions with the chairman of the all-party group for the country in question and I am further investigating to try to assure myself that the concerns are misplaced.
I think I have dealt with many of the questions, but we will go back to see whether I have missed any specific ones. A question was asked about our capacity to collect tax. The UK is a leading nation in supporting capacity building in other tax systems. I am proud of the work we do in supporting capacity building in tax administration. We have the wherewithal to offer good support, where that is needed. HMRC undertakes a major piece of work as part of the Department for International Development’s wider programme of capacity building in partner countries.
I think I will leave it there. I know that a question was asked about the number of people from the UK and the number of businesses in Turkmenistan. I do not have that detail to hand, but I am very happy to write with as much as we know about that. Clearly part of the DTA’s purpose is to encourage that very exchange from business to business. I will write to Members whom I have not been able to satisfy with my answers.
Question put and agreed to.
Criminal Finances Bill (Third sitting)
Thursday 17th November 2016
(7 years, 5 months ago)
Public Bill CommitteesRead Full debate Criminal Finances Act 2017 View all Criminal Finances Act 2017 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 17 November 2016 - (17 Nov 2016)
The Chair
We now begin line-by-line consideration of the Bill. Before we begin, would everybody who has a mobile phone switch it off so we can get on with the business of the day? Although it is a bit cold at the moment, hon. Members may remove their jackets if they wish to.
The selection list for today’s sitting is available in the room, and shows how selected amendments have been grouped together for debate. Amendments grouped together are generally about the same or similar issues. A Member who has put their name to the lead amendment in a group is called first. Other Members are then free to catch my eye to speak on all or any of the amendments in that group. A Member may speak more than once in a single debate, and I will work on the assumption that the Minister wishes the Committee to reach a decision on all Government amendments. Please note that decisions on amendments do not take place in the order in which they are debated, but in the order in which they appear on the amendment paper. In other words, debate occurs according to the selection and grouping list, and decisions are taken when we come to the clause that that amendment affects. I hope that explanation is helpful.
The Bill contains 51 clauses, which is a substantial number considering that we only have today and two days next week to discuss it. I would appreciate it if Members could be concise and full in their presentation as possible, so the examination can be as full as possible. After all, it is Members’ time and the House’s time. I will use my discretion on whether to allow separate stand part debates on individual clauses and schedules following the debate on relevant amendments.
Clause 1
Unexplained wealth orders: England and Wales and Northern Ireland
Dr Rupa Huq (Ealing Central and Acton) (Lab)
I beg to move amendment 1, in clause 1, page 1, line 17, after “sought” insert—
“(and the property specified may include property located outside the United Kingdom)”
This amendment would ensure that unexplained wealth ordered may be issued for property located outside the UK.
It is a pleasure to serve under your chairmanship, Sir Alan.
In summary, we welcome the Bill. The unexplained wealth orders are a good thing, but amendment 1 is an example of where we think the measures could go a little bit further and be further improved. The amendment would provide that property located outside the UK could be utilised in an unexplained wealth order brought before an individual. It is meant to be a technical rather than political amendment. We are happy to work with the Government, but I think we can all drink to this amendment regardless of political affiliation.
The amendment would facilitate information sharing across different jurisdictions and would provide the United Kingdom with vital information regarding illicit financial activity that has taken place elsewhere across the globe. Reports by both the Select Committee on Home Affairs and the Public Accounts Committee hinted at this, and there is even a line in the Government’s action plan for anti-money laundering and counter-terrorism finance from April that says we should increase
“the international reach of law enforcement agencies and international information sharing to tackle money laundering and terrorist financing threats.”
Therefore, if an individual provides false and/or misleading information in relation to an unexplained wealth order, they can be prosecuted, but we would widen the scope of the property that comes under such an order so that we can question those who might be resident in the UK regarding their suspected illicit activities regardless of where their wealth is. As we know, people travel and cross borders, so we might not be able to recover wealth from that person. That throws up issues around cross-jurisdictional co-operation, and it is one area where confiscation orders kept hitting a brick wall and coming to grief.
We can glean intelligence on behaviour abroad and share it with other states, which would act as a disincentive to come to the UK to corrupt politically exposed persons who may contaminate our economy with their illicit wealth. If criminals know that on entering the UK, there is a process and our enforcement agencies can compel them to talk about their suspect wealth or property regardless of where they have placed it, they will think twice about coming here. We want to restrict their ability to move. That would send out a powerful message that the UK is not a soft touch when it comes to dodgy financial dealings, which I think we can all agree would be a good thing.
The current threshold at which a UWO can be served under the Bill is £100,000, but what if a criminal or suspected criminal has property of £50,000 here in the UK and has moved £50,000 of property elsewhere? Our enforcement agencies have concluded that, on the balance of probability, both combined are beyond the means of the person in question. I would like to think that the Bill already covers that, but we have tabled this probing amendment to confirm it. We are talking about portable wealth, which extends to jewellery and paintings, which have ultimate portability, because someone could leg it to a foreign country with them. My conclusion is that we would be unable to issue an unexplained wealth order if property is split between two places. I suspect I am right but am happy to be proved wrong.
The scenario I mentioned raises another question. If an individual acquires property of a value that reaches the unexplained wealth order threshold of £100,000 and manages to transfer it out of the UK, it is only after they have done so that our enforcement agencies become aware of it. Does that mean that an unexplained wealth order cannot be issued to that person because the property is now outside the UK? I want some clarification from the Minister on those things. I imagine that the answer is “Yes, we cannot do that”, but if the answer is, “No, we can do it”, it would be even better, because Opposition Members want unexplained wealth orders to be a success.
Finally, the amendment would introduce an element of operational efficacy. If all our enforcement agencies were aware that they were able to factor in stuff that is located outside the UK properly from the beginning of their investigations, it could contribute to our agencies being quicker off the mark. They could sound a warning alarm bell. They would be oriented from the get-go to cast their net as widely as they can to hold criminals to account. That is largely what we seek to do through the amendment.
The Minister for Security (Mr Ben Wallace)
It is a pleasure to serve under your chairmanship, Sir Alan. As we begin the line-by-line scrutiny, it might be useful if I give the Committee a brief outline of how unexplained wealth orders will work.
In short, an unexplained wealth order is a civil investigatory tool. It is a court order that requires a person to provide information that shows they obtained identified property legitimately. If the person provides information and responds to an unexplained wealth order, the enforcement authority can then decide whether to investigate further, take recovery action under the Proceeds of Crime Act 2002 or take no further action. If the person does not comply with an unexplained wealth order, either by not responding or not responding fully to the terms of the order, the property identified in the order is presumed to be recoverable under any subsequent civil recovery proceedings. It is important to note that the unexplained wealth order does not in itself lead directly to recovery action. It is designed to be an investigatory power and a precursor to civil recovery action.
An unexplained wealth order is an order made against a person, requiring them to provide information to explain how they obtained the property. It is important for all of us to understand this crucial factor: the unexplained wealth order is made against a person, not against property, and does not itself result in the recovery of that property. That is the vital point in relation to amendment 1.
In the Proceeds of Crime Act, it is clear that, if an order is to be made against a person or a property overseas, it must be explicitly stated on the face of the legislation. For example, section 282A of POCA provides that a civil recovery order can be made against property overseas if there is a connection with the UK. Section 375A of POCA also provides that an evidential request can be made overseas in constructing a case for civil recovery.
The same is already the case with unexplained wealth orders. New section 262A(2)(b) in clause 1 of the Bill provides that the person on whom the order will be served must be named, and it expressly provides that
“the person specified may include a person outside the United Kingdom”.
The unexplained wealth order therefore has global effect. The definition of “property” in the POCA already encompasses all property, whether it is situated at home or abroad. An unexplained wealth order can therefore list any property, wherever it is in the world. The court has an associated power to make an interim freezing order in respect of that property.
Clause 3 inserts a provision into POCA that an enforcement authority can request assistance from an overseas state concerning the freezing of property overseas that is subject to an unexplained wealth order. I therefore assure the hon. Lady that unexplained wealth orders will be effective against property anywhere in the world. Accordingly, I invite her to withdraw her amendment.
Dr Huq
I beg to move amendment 2, in clause 1, page 2, line 31, at end insert—
“(8) Persons who are members of an enforcement authority must co-operate with other persons who are members of other enforcement authorities for the purposes of making application to the High Court for an unexplained wealth order.
(9) In particular, the duty imposed on a person by subsection (8) requires a person—
(a) to engage constructively, actively and on an ongoing basis in any process leading to an application being made for an unexplained wealth order, and
(b) to have regard to activities of a person within subsection (8) so far as they are relevant to the making of an application for an unexplained wealth order.”
This amendment would require enforcement authorities to co-operate when making applications for unexplained wealth orders.
The Chair
With this it will be convenient to discuss new clause 12—Unexplained wealth orders: duty to prevent corruption—
“In Chapter 1 of Part 8 of the Proceeds of Crime Act 2002 (investigations: introduction), after section 342, insert the following—
‘342A Unexplained wealth orders: duty to prevent corruption
(1) A relevant authority must exercise its functions in relation to unexplained wealth orders in the way which it considers is best calculated to contribute to the prevention of corruption.
(2) For the purposes of this section it is immaterial whether corruption is being prevented in the United Kingdom or elsewhere.
(3) In considering under subsection (1) the way which is best calculated to contribute to the prevention of corruption a relevant authority must have regard to any guidance given to it by—
(a) in the case of the National Crime Agency, the Secretary of State,
(b) in the case of the Director of Public Prosecutions or the Director of the Serious Fraud Office, the Attorney General,
(c) in the case of Her Majesty’s Revenue and Customs or the Financial Conduct Authority, the Chancellor of the Exchequer, and
(d) in the case of the Director of Public Prosecutions for Northern Ireland, the Advocate General for Northern Ireland.’”
Dr Huq
We heard in the evidence session on Tuesday from many different bodies, including Her Majesty’s Revenue and Customs, the Serious Fraud Office, and the National Crime Agency. One problem with the existing confiscation orders is that the buck seems to be passed between many of them, and there is confusion about who the lead investigator is. The amendment would introduce a duty on all those agencies to co-operate, even before it got as far as the Crown Prosecution Service and Her Majesty’s Courts and Tribunals Service. Those people feel stymied, and they cannot investigate—it does not get that far because of squabbling over where the buck stops. The amendment seeks to address the lack of co-operation among UK law enforcement agencies that devolve responsibility for investigating cases.
There is an example that people may know about. It is the quite famous case of Sergei Magnitsky, the Russian who was murdered, and who uncovered what had been going on at Hermitage Capital Management. Bill Browder, an American, has spoken to an all-party parliamentary group here and is quite vocal on these issues. The murdered chap blew the whistle on $230 million in Russian Government frauds. Hermitage Capital Management discovered that, and there is a timeline on which it sought every possible avenue to open a money laundering investigation in the UK. Every single UK enforcement agency refused to open an investigation, stating that it was not its responsibility to investigate.
In 2010, Hermitage filed a complaint with the Metropolitan Police Service, highlighting the UK nexus of criminal activity. The MPS replied that the responsibility for investigating the fraud did not lie with the MPS. Hermitage then attempted to take legal action through the Serious Organised Crime Agency, requesting that an investigation begin in connection with the $230 million in fraud. SOCA replied that it was not the appropriate body for the job. In 2012, Hermitage filed another complaint with the Serious Fraud Office, which gave evidence to us on Tuesday, to highlight those financial crimes, which occurred in a UK jurisdiction. The SFO refused to do anything. In its words,
“matters do not fall within the offences that the SFO is permitted to investigate.”
In 2013, Hermitage filed a complaint with HMRC seeking a review of the company formation agent that facilitated the money laundering in the UK. HMRC answered that confidentiality precluded an investigation. In 2015, Hermitage filed a complaint with the NCA, which also gave evidence to us on Tuesday, outlining the flow of money—the fraudulent $230 million—to the UK. The NCA replied that it was a domestic criminal investigation relating to money laundering in the UK and therefore that the NCA was not the most effective way forward.
The amendment would create a duty for UK authorities to co-operate and take constructive action. We used to talk about joined-up thinking. That is essentially what the amendment is with regard to unexplained wealth orders. It would strengthen the Bill and ensure that provisions are not rendered ineffective because everyone says, “It is not my responsibility.”
Tristram Hunt (Stoke-on-Trent Central) (Lab)
New clause 12 seeks to add to amendment 2 and put a duty to prevent corruption in the Bill, to strengthen the hand of the Minister and the agencies involved. As we have heard, the UK is still considered a global haven for money laundering.
According to a Home Affairs Committee report on the proceeds of crime, it is estimated that more than £100 billion is laundered through London’s financial systems every year. Despite more than 380,000 suspicious activity reports being filed each year, the National Crime Agency currently has only 27 investigations open, with approximately £170 million frozen. By contrast, in Switzerland, some £5 billion-worth of Swiss francs are currently frozen.
The new clause seeks to ramp up the responsibilities on the National Crime Agency, public prosecutions and HMRC to make it a duty to prevent corruption, to ensure that we protect London’s reputation and that our financial, legal and accountancy services remain among the best in the world.
Mr Wallace
We are all in agreement that law enforcement agencies should do more to co-operate and talk to each other before embarking on action against a person or property, and that they should ensure that they are acting to combat corruption in all its forms. In that sense, the implication of the amendments is entirely sensible.
As the hon. Lady set out, amendment 2 would impose a duty on operational agencies to co-operate prior to applying an unexplained wealth order. Such co-operation would have several benefits. Most obviously, it would avoid duplication of the same effort against an individual and their property. It would avoid one agency trampling over another that had embarked on a similar line of inquiry. Indeed, another agency may well have an explanation of the wealth. An obvious example is that HMRC can be aware of complex legal tax arrangements that an individual may have.
I am entirely supportive of the spirit of the hon. Lady’s amendment. I would go further and say that liaison should not be limited to those bodies that can apply for unexplained wealth orders and take civil recovery action; it should happen between all law enforcement agencies and prosecution authorities. I am pleased to reassure her that that already happens. Law enforcement agencies, as a matter of course, check various law enforcement databases to see whether there is a flag against a particular person or property that is of interest to them. They can then liaise accordingly. In addition, unexplained wealth orders will be subject to the Proceeds of Crime Act investigation code of practice, which will be amended and subject to debate in both Houses before coming into force. I can assure the Committee that this issue will be addressed in that code.
The Proceeds of Crime Act is not the only legislation where a conflict between law enforcement agencies could occur relating to the same person or property. Several police forces may have an interest in the same criminal. Those conflicts can be resolved without the need for primary legislation. This is a matter for internal discussion on tasking and co-ordinating, which the code of practice will achieve.
New clause 12 would impose a duty on agencies to prevent corruption when considering the use of unexplained wealth orders. It is my hope that the mere existence of these orders in UK law will in itself create a deterrent to those who seek to place their corrupt wealth in the UK.
We continue our efforts to tackle corruption in all its forms. This year, we hosted the London anti-corruption summit, bringing together world leaders, business and civil society to agree a historic package of actions to expose, punish and drive out corruption in all walks of life. We will continue to implement UK commitments from the summit and encourage others to do likewise.
Indeed, the limb of unexplained wealth orders that allows their application to non-EEA foreign officials and politicians reflects the real concerns about those involved in corruption overseas who then launder the proceeds of their criminality in the UK. I hope the hon. Member for Stoke-on-Trent Central can see that the power will be used to tackle corruption, but unexplained wealth orders go further: they will also apply to cases in which there is a suspicion of involvement in serious crime, not necessarily corruption. The proposed duty could risk the deprioritisation of other crime types, which we agree that the NCA, the Crown Prosecution Service, HMRC and the Financial Conduct Authority could be tackling. They will of course pursue those guilty of corruption, but I hope we agree that our law enforcement agencies are best placed to prioritise their resources to pursue a whole range of criminals.
The Secretary of State and Attorney General already issue statutory guidance on the use of powers under POCA, including the use of civil recovery powers. That guidance will be extended to the new bodies granted civil recovery powers in the Bill. HMRC and the FCA intend to reissue the guidance next year, when we will be able to address both issues. I hope that the hon. Members for Ealing Central and Acton and for Stoke-on-Trent Central are reassured that the issues are already accounted for. I invite her to withdraw the amendment.
Tristram Hunt
I am happy for the amendment to be withdrawn, but it would be nice to hear something more on Report. I take the point about the precision of focusing on corruption when other serious criminal activities are involved, but some language on a duty to prevent corruption would be good. The important element is the duty; I hope that the wording on corruption and other serious criminal activity might be added to that.
Dr Huq
If I understood correctly, the Minister said that no primary legislation is required to do what the amendment would do, and that there are already flags and a joined-up process. Are we confident that something like the Magnitsky case, with all the stuff that happened—everyone closing the door to Bill Browder, year upon year—would not happen again with unexplained wealth orders?
Mr Wallace
On the Magnitsky case, it would be inappropriate to comment on a case that could be under continuing investigation. The main point is that our law enforcement agencies have operational independence. It is for them to decide the priorities for how they spend their resource and work together. We do an awful lot, without primary legislation, to ensure that they work together. They liaise through regional bodies such as the regional organised crime units, and through the national co-ordinators and everything else.
Our view is that primary legislation is unnecessary because, whether it is through the code of practice, which will be published alongside the Bill, or in the operational day-to-day running of the organisations, joint working is part of their remit and, effectively, their duty. We do not think it is necessary to put anything in the Bill because we fear that that could pervert their priorities and interfere with their operational independence.
Tristram Hunt
I beg to move amendment 59, in clause 1, page 3, leave out line 28.
This amendment would allow unexplained wealth orders to be issued to politically exposed persons in the United Kingdom and EEA States.
The Chair
With this it will be convenient to discuss amendment 60, in clause 4, page 15, leave out line 25.
This amendment has the same effect as amendment 59 but applies to unexplained wealth orders issued in Scotland.
Tristram Hunt
The amendment is explained by the explanatory statement. You will know, Sir Alan, that in 2014 Slovenia’s former Prime Minister, Janez Janša, was found guilty of taking bribes during the course of a €278 million arms deal with a Finnish state-owned contractor. Politically exposed persons were also among the 12 people referred to a criminal court in Cyprus earlier this year to stand trial for corruption and bribery charges in connection with a waste overcharging scam that is thought to have involved more than €30 million.
Although it may be reasonable to expect that European economic area countries would be able to undertake criminal investigations against politically exposed persons in their countries if there were sufficient evidence to suggest that they had been involved in corruption, that might not necessarily be the case. For example, there is still blanket immunity from criminal prosecution for parliamentarians in Hungary, despite it being an EEA country. The amendment would extend the Government’s welcome reform of unexplained wealth orders for those outside EEA states to include those within EEA states. We know that what we are dealing with does not simply stop at the continent of Europe or the EEA states. The amendment seeks to apply some degree of equality of this legislation to the EEA states.
Amendment 60 would have the same effect as amendment 59, but would apply to unexplained wealth orders issued in Scotland as well.
Mr Wallace
I thank the hon. Gentleman for his comments. We had a useful meeting yesterday about some of these issues. He will know that we welcome these amendments as they give us the opportunity to discuss why we have effectively a different regime between politically exposed persons outside the EEA and ourselves. The amendment would cover us sitting in this room—all PEPs in the EEA. That is important because, if any of us were to face an unexplained wealth order, we would want to know that it had been issued on the basis of evidence linking us to serious crime; we would not want to give our authorities the ability just to slap one on without any evidential threshold.
We have confidence that, within the EEA—the hon. Gentleman used the example of a country prosecuting its own former Prime Minister—there are the tools to find the evidence and the ability to work with fellow law enforcement agencies around Europe to meet the evidential threshold. We cannot discriminate within the EEA; we cannot say, “This applies to Slovenia but it doesn’t apply to France”. Once we go into that area, we cannot discriminate between the different states. He picked out Hungary, where there is immunity for parliamentarians. I think there are other countries—even Italy; I do not know. If I remember my Berlusconi history, I think there were lots of issues about immunity in that country. That is the real issue. We have confidence in our neighbours and friends in Europe that they have the capacity to build the evidence and therefore to build a case for an unexplained wealth order.
Charlie Elphicke (Dover) (Con)
My hon. Friend is making a powerful argument. Is he aware how many Members of Parliament have problems just opening a bank account because of over-eager regulators using the PEPs regulations? With this amendment, would there not be a risk that over-eager agencies would be interested in issuing these things to MPs, which is not an ideal situation? We ought to have the evidential threshold set out in clause 1(4)(b).
Mr Wallace
I am grateful to my hon. Friend for his intervention. He makes the clear point that we want to be confident that, when we are held to account, it is based on evidence gathered by our resourced law enforcement agencies. The decision on PEPs outside the EEA reflects real operational challenges that we and organisations such as the National Crime Agency have had in gathering evidence against people in some countries where there may be no properly functioning Government or, indeed, where the Government are entirely corrupt and it is very difficult to gather that evidence.
That is the reason we have had to plug that gap in that way. I hope that the hon. Member for Stoke-on-Trent Central understands that that is why we have a different approach. I urge him not to push his amendment to a vote.
Tristram Hunt
I thank the Minister for his comprehensive response, including on the evidential threshold, and the hon. Member for Dover for his point concerning the energy with which some financial institutions in the UK have approached PEPs, even—dare I say it?—on car insurance.
On the basis of the Minister’s argument, I am willing to withdraw the amendment, but I fear that this may be returned to in the aftermath of our exiting the European Union.
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
The Chair
With this, it will be convenient to discuss the following:
New Clause 11—Unexplained wealth orders: reporting requirements—
“In Chapter 2 of Part 8 of the Proceeds of Crime Act 2002, after section 362H insert—
‘362HA Unexplained wealth orders: reporting requirements
(1) The Secretary of State must make an annual report to Parliament setting out the number of unexplained wealth orders applied for by enforcement agencies under section 362A of this Act (and by Scottish Ministers under section 396A of this Act) during the previous 12 month period.
(2) The report must also provide information in respect of each unexplained wealth order about—
(a) the value of property subject to the order,
(b) whether the respondent was—
(i) a politically exposed person,
(ii) a person involved in serious crime (whether in a part of the United Kingdom or elsewhere)
(c) whether the order was granted,
(d) the value of the property reclaimed as a result of the order.
(3) For the purposes of this section “enforcement agencies” has the same meaning as in subsection 362A(7).’”
This new clause would require the Secretary of State to make an annual report to Parliament about the number of unexplained wealth orders made each year.
New Clause 13—Unexplained wealth orders: award of costs—
“In Chapter 2 of Part 8 of the Proceeds of Crime Act 2002, after section 362H insert—
‘362HB Unexplained wealth orders: award of cost
(1) Part 44 of the Civil Procedure Rules (General Rules about Costs) shall not apply to applications made by enforcement authorities for—
(a) unexplained wealth orders under section 362A of this Act,
(b) interim freezing orders under section 262I of this Act.
(2) The High Court shall not have power to make awards for costs against enforcement authorities who bring an unsuccessful application for—
(a) unexplained wealth orders under section 362A of this Act,
(b) interim freezing orders under section 262I of this Act.
(3) For the purposes of this section ‘enforcement agencies’ has the same meaning as in subsection 362A(7).’”
This new clause would prevent the courts from awarding costs against enforcement agencies where they have brought unsuccessful applications for unexplained wealth orders or interim freezing orders.
Mr Wallace
The previous debates have given us the opportunity to begin considering clause 1, which provides for the creation of unexplained wealth orders. Those are powerful new tools, and I welcome the cross-party support for them as well as the strong endorsement of those in civil society from whom we heard earlier this week.
The London anti-corruption summit in May galvanised the international response to corruption. Domestically, we must tackle grand corruption and protect the integrity of the UK’s financial sector. Unexplained wealth orders will help us to do that. As we have discussed, unexplained wealth orders are essentially an investigatory tool that will help to enable civil recovery of the proceeds of crime under existing powers in the Proceeds of Crime Act 2002. Civil recovery is a powerful tool, because it can be used where criminal prosecution followed by a confiscation order is impossible, perhaps because a person is abroad and cannot be extradited or there is not specific evidence linking an individual to a crime, but there is enough evidence to show that property is linked to the wealth generated from a crime.
Between April 2015 and March 2016, £6.5 million was recovered under those powers, but there is still a gap where law enforcement agencies cannot satisfy the necessary evidential burden. Unexplained wealth orders will flush out evidence to enable enforcement agencies to take forward recovery action under POCA. Such an order will require a person to provide information that shows that they obtained identified property legitimately. If they do so, agencies can then decide whether to investigate further, take civil recovery action or take no further action. If the person does not comply with the order, the property identified in the order is presumed to be recoverable under any subsequent civil recovery proceedings.
I stress that the unexplained wealth order is designed to be an investigative power and a precursor to civil action, not an end in itself. I accept that there is significant interest in the way that such orders will operate, because they involve the reversal of the burden of proof. That is why they are subject to stringent safeguards. The value of the property subject to an unexplained wealth order must be greater than £100,000, a much higher threshold than for normal civil recovery, where action cannot be taken against property worth less than £10,000.
Nic Dakin (Scunthorpe) (Lab)
I thank the Minister for being so complete in his arguments. Can he explain why £100,000 was chosen? I note from the evidence that we have received that no one had any objection to that figure, but I am interested in why it was chosen.
Mr Wallace
The hon. Gentleman poses an interesting question. Unexplained wealth orders are linked to serious and organised crime. Although, inevitably, some serious criminals make below £100,000, that was thought to be a useful threshold, and that is where we should look as a starting point. There will be concerns among Members that Aunt Bessie’s £25,000 appearing in someone’s bank account may trigger something like an unexplained wealth order, and we wanted the wealth threshold to be significant enough to ensure that there was a link between serious crime and the recovery of assets being triggered. I know that some people wanted that threshold to be higher than £100,000 and some people wanted it to be lower. As the Minister, my job is to try to get it in the right place, but I would welcome his suggestions on whether it should be, say, £59,000 or £105,000. It could be like “Bullseye”.
Carolyn Harris (Swansea East) (Lab)
It is a pleasure to serve under your chairmanship, Sir Alan. Is there a mechanism for recognising regular, ongoing transactions that are close to but always under £100,000? Will that trigger any red flashing warning lights that there may be illegal activity?
Mr Wallace
The cumulative wealth would of course build up. I am happy to be persuaded by the Committee about the threshold. The reality is that, given the vast number of people involved with organised crime groups across the threat picture and the staggering wealth of some of them, we will be lucky to get to £100,000. We will be going for people worth £20 million, £30 million or £40 million and all the way down. It would chill people’s bones to realise how some of the people who live among us make their money out of crime and launder that money. The bottom line is the number of those individuals. That is why we chose £100,000, but hon. Members may want to make a persuasive argument otherwise. Cumulative wealth is certainly an issue. I was in the north-east of England the other day and met an individual who is unemployed but has well over £400,000 in their bank account. I am looking forward to knocking on that person’s door.
Tristram Hunt
I had a terrible fear about the rule of law for a minute there.
We tabled new clause 11 to help the Minister. It would require the Secretary of State to make an annual report to Parliament about the number of unexplained wealth orders made each year. It is really about helping to drive culture change through the Government, the Departments and the agencies involved in this excellent set of reforms, and ensuring that Parliament is kept up to date with how the agencies and Ministers are approaching it. There is nothing quite like a presentation to Parliament —a ministerial statement, written or oral—to concentrate attention in Departments on the importance and significance of a particular piece of legislation. The new clause would ensure that the Bill had the bureaucracy and political support behind it.
Similarly, new clause 13 would help to get the wheels in motion for unexplained wealth orders and investigatory powers under the Proceeds of Crime Act 2002. It seeks to prevent the courts from awarding costs against enforcement agencies if their applications for unexplained wealth orders or interim freezing orders are unsuccessful. It is about ensuring that a culture of risk-aversion does not develop in our agencies. They are often fearful, in these straitened budgetary circumstances and under the full glare of the press, about pursuing the kind of individuals the Minister spoke about, for fear of the financial implications if they are unsuccessful and taken to court. Colleagues will remember that the Serious Fraud Office’s botched case against the entrepreneur Vincent Tchenguiz will settle for £3 million plus costs, which is a fraction of what his lawyer originally demanded, so these can be quite costly enterprises.
We would not want to hand down these new powers in statute to those who direct our investigatory agencies, only for a culture of not pursuing those individuals to develop in those organisations. New clause 11 would ensure that Parliament had a voice and oversight over the process, and new clause 13 would ensure that a culture of risk-aversion does not develop in the agencies that are to be granted these new powers.
Mr Wallace
I will start with the good news: I support the spirit of new clause 11, which I discussed with the hon. Gentleman yesterday. It is important that we have a measure to ensure the transparency of the operation of unexplained wealth orders. In my recent responses to the reports of the Public Accounts Committee and the Home Affairs Committee on asset recovery—both reports were excellent, I have to say—I committed to publishing annual statistics on annual recovery performance. After our meeting, I instructed my officials to ensure that those statistics include unexplained wealth orders. I therefore hope there is no need for the hon. Gentleman’s new clause—which would create a statutory duty in primary legislation to report—as those figures will be contained in an annual bulletin.
New clause 13 relates to the risk that potential financial liability may make law enforcement agencies reluctant to apply for unexplained wealth orders. It seeks to ensure that the authorities are not liable following an unsuccessful unexplained wealth order application. I was pleased to be able to discuss that issue with the hon. Gentleman yesterday, and I am advised that the existing civil procedure rules, which would extend to cover unexplained wealth orders, mean that by default an application for such an order would take place in private. I am happy to share those civil procedure rules with the hon. Gentleman to see whether he thinks that is enough. That is also the case for any subsequent legal stages. On that basis, if an application is unsuccessful, or if the individual was latterly able to provide the court with an acceptable explanation of their wealth, it would not generally be public knowledge. There would therefore be no undue reputational damage to the individual concerned.
More generally, whatever the peculiarities relating to unexplained wealth orders, it remains our view that any awards of costs should follow the same rules that apply in other, similar matters. The general principle that the loser pays is a well established position. Changing it could lead to unfortunate unintended consequences in relation to other powers and procedures. In any case, the judge has a general discretion to award costs that are proportionate. It is not a matter of one side producing a figure and the judge awarding that without any consideration of the case; we should maintain a consistent approach.
On that basis, although I share the concern about impinging on our agencies’ ability to pursue crimes, it is not appropriate to indemnify them in this context. If they have made a mistake and applied for an unexplained wealth order against the wrong person, risking someone’s reputation, it is in my view appropriate for them to take responsibility. If we indemnify them, a mistake will be confused with normal investigative procedure. I do not think it is the best thing to indemnify them, given that hearings can be held in private, in court procedure. I hope that hon. Members will be satisfied with that.
Question put and agreed to.
Clause 1 accordingly ordered to stand part of the Bill.
Clause 2
Interim freezing orders
Question proposed, That the clause stand part of the Bill.
Mr Wallace
Clause 2 acts in tandem with clause 1 in appropriate cases. It provides that the court can also issue an interim freezing order in relation to property that is subject to an unexplained wealth order. The interim freezing order provides that the property cannot be dealt with in any way while subject to that order. There is no point in putting an unexplained wealth order on something if it can immediately be sold, as we might lose the asset. The freezing order can be used to keep it in place.
It is important to split the obtaining of an unexplained wealth order and the freezing of property into two different matters. Although they will be done at the same hearing, they are different decisions with separate considerations. Some colleagues have asked why we are not providing that property must be frozen in every case. Freezing someone’s property is a very invasive measure and may not be necessary in every case. For example, there may be no suspicion that the property will be dissipated—perhaps it is a house that has been owned and occupied by the same person for many years—or that a civil recovery order will be frustrated in some other way.
We would not want unexplained wealth order applications to be rejected solely on the grounds of a technicality related to the freezing decision. It is also important to note that if property is frozen, the court may quite reasonably expect the case to progress at a far quicker pace than if no freezing order was in place. On that last point, I should flag up the fact that, under clause 1, if property is subject to an interim freezing order, the enforcement authority is given a deadline of 60 days to decide the next steps. The freezing order would then be discharged after a further 48 hours.
The expectation is that if an enforcement authority is to go forward with civil recovery action, it will obtain a property freezing order, with many of same provisions and safeguards, to apply immediately to the same property once the interim freezing order is lifted. The property would remain frozen.
An application can be made for the variation or discharge of the freezing order. The court can also provide that property can be released to meet affected persons’ reasonable living expenses, their need to carry on their business and their legal expenses. I hope that what I have said reassures hon. Members that the freezing order provisions are properly circumscribed.
Dr Huq
The Minister has given a full and cogent account of why interim freezing orders are being introduced. As a London MP, I know how dirty money in the property market has skewed the entire London property market, meaning that genuine people cannot get a foot on the ladder. It sounds as if sufficient safeguards are being put in place, so we will not stand in the way of the clause.
Question put and agreed to.
Clause 2 accordingly ordered to stand part of the Bill.
Clause 3
External assistance
Mr Wallace
Clause 3 supplements clause 1, on unexplained wealth orders, and clause 2. It provides for a request to be sent to another country to freeze property there that is subject to an unexplained wealth order, which addresses the point that the hon. Member for Ealing Central and Acton made in the debate on her amendment 1 about going after property abroad.
I will make two points for the benefit of the Committee. First, an unexplained wealth order can apply to property outside of the UK. That reflects the operation of existing civil recovery powers, which can include property overseas if a sufficient connection can be shown with the United Kingdom—for example, where the suspected criminal is British, the criminality is thought to have taken place in this country or there are victims in the UK.
Secondly, there is no international law that expressly provides for the freezing of property in relation to unexplained wealth order-type powers. We will need to liaise closely with other countries in relation what existing international law may underpin such a request, as well as working on obtaining wider recognition of unexplained wealth orders. The clause primarily creates legal certainty that such a request can be made. We also encourage recognition of such requests as part of the wider fight against international crime and corruption.
Dr Huq
Once again, we have no problems with any of that, particularly as it allays some of those concerns about overseas property that were anticipated by amendment 1.
Question put and agreed to.
Clause 3 accordingly ordered to stand part of the Bill.
Clause 4
Unexplained wealth orders: Scotland
Richard Arkless (Dumfries and Galloway) (SNP)
I beg to move amendment 57, in clause 4, page 14, line 35, leave out “£100,000” and insert “£50,000”.
This amendment reduces the threshold for the value of property that UWO may be issued for in Scotland to £50,000.
It is a pleasure to serve under your chairmanship again, Sir Alan. Essentially, we are asking for the threshold or limit for which an unexplained wealth order can be granted to be reduced, in Scotland only, from £100,000 to £50,000. I cite three main arguments for making that suggestion. We state in the explanatory notes that that would bring the threshold in line with international standards. The level in Ireland is €5,000, while the level in Australia is 100,000 Australian dollars, which equates to around £60,000.
I also refer the Minister to the drastic difference in asset valuations north and south of the border, particularly in property prices. Property prices in London average at £487,000. The unexplained wealth order threshold in England and Wales is set at £100,000, which is just less than a quarter of the average property price. Property prices in Scotland are significantly lower. In my constituency the average is £120,000, while in North Ayrshire they are less than £100,000. Applying the same rationale of a percentage of the overall property price, our threshold should be substantially lower. We suggest that a reasonable level would be £50,000.
I also draw the Minister’s attention to the point that reducing the threshold in Scotland, where there are lower asset valuations, is a no-lose situation for the Government. The threshold in itself is not the main benchmark to trigger these unexplained wealth orders; it is the test. The test for Scotland, which we agree with, is set out in proposed new subsection 396B(3) of the Proceeds of Crime Act 2002. That test must be met in every single circumstance, whether the threshold is £5, £10 or £100,000. Even if the limit was set at £500,000, that test must be met. Given the lower asset valuations in Scotland, it is a no-lose situation to bring the threshold down.
I envisage criminals perhaps acquiring properties in a lower-asset valuation jurisdiction and creeping below the £100,000 threshold. We do not want to end up with some criminals getting off the hook and us having to come back to Parliament to try to lower the threshold. We are not suggesting that the threshold is lowered in England and Wales—that is a matter for the Minister and Members for England and Wales. Clearly there are arguments, given the higher property prices, but I suggest, for the reasons I have set out, that it would be sensible to lower the threshold for Scotland. It would be a no-lose situation for the Government to agree to the amendment.
Mr Wallace
I thank the hon. Gentleman for his point. The point to note is that an unexplained wealth order is made against the person and therefore their collective assets, rather than an individual asset. Therefore, whether a successful gangster with a huge amount of money chooses to buy 10 houses where property prices are low—in any part of the United Kingdom—or one house, the order is against that person and catches all their wealth however it is stored.
I want to put the hon. Gentleman at his ease on his view that there is such a difference between Scotland and England. The threat of organised crime is exactly the same. Unfortunately for all of us, there are successful gangsters on both sides of the border who make considerable amounts of money. Therefore, the argument about the £100,000 threshold is that it will catch serious criminals on both sides of the border. We are going to go after their wealth. We must also remember that it is about the person rather than the property. I therefore urge him to withdraw his amendment. If he does so, I am happy to meet him to discuss this issue further—there are other opportunities for that, should he like to do so—and to explore the different options at the threshold.
Richard Arkless
Given that we are almost wholly persuaded by my arguments to reduce the threshold, I am tempted to press the amendment to a vote. However, taking the Minister at his word—I have no reason to disbelieve him—we will be happy to withdraw the amendment if we are assured that those further conversations could happen. We do not see any harm in that, and perhaps we can develop those conversations as we go through the stages of the Bill. Given his gracious assurance, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
Mr Wallace
The clause brings us for the first time to devolution and separate court systems in the United Kingdom. Clauses 4 to 6 provide for unexplained wealth orders in Scotland on effectively the same terms as clauses 1 to 3 do for England, Wales and Northern Ireland. As such, much of what we have discussed relating to the substance of unexplained wealth orders applies equally here.
The reason for separate provisions for Scotland is the different court structure and the separate existing practice and procedure that relates to civil recovery. I assure the Committee that there will be a consistent approach to unexplained wealth orders across the United Kingdom. All the safeguards and other measures will apply in Scotland as they do elsewhere in the United Kingdom.
As we are adding to the criminal law, I will specifically mention the creation of a parallel offence of knowingly or recklessly making a statement that is false or misleading, but I do not think there is anything more to concern the Committee relating to unexplained wealth orders that we have not already discussed.
Richard Arkless
I rise to reiterate our support that the clause stands part of the Bill.
Question put and agreed to.
Clause 4 accordingly ordered to stand part of the Bill.
Clause 5
Interim freezing orders
Question proposed, That the clause stand part of the Bill.
Mr Wallace
The clause supplements clause 4 in appropriate cases. It provides that the court can also issue an interim freezing order in relation to property subject to an unexplained wealth order in Scotland. It is important to note that it provides in Scotland what clause 2 provides in England, Wales and Northern Ireland. The safeguards and processes are similar. It is also closely modelled on freezing powers that already exist in civil recovery.
Richard Arkless
Although we accept the principal contents of the clause, I reiterate the concerns I made on the Floor of the House on Second Reading. The test to implement a freezing order in proposed new section 396I(2) is that the court
“considers it necessary…for the purposes of avoiding the risk of any recovery order that might subsequently be obtained being frustrated.”
Therefore, essentially the judge will have to decide whether there is reasonable suspicion that the alleged criminal will abscond with that property. We are clearly keen to avoid that situation.
How does the Minister see that paragraph being interpreted by the judiciary? Is there a danger that it is over-prohibitive or too onerous? How will it be evidenced? How on earth can a judge determine whether that person is likely to abscond with the property? The fact that they have been subject to an unexplained wealth order might reasonably suggest in itself that that would be enough to compel the profit to be frozen? We are trying to avoid an unexplained wealth order being granted, but then some pest from another jurisdiction wriggles with the freezing order and gets the property out of the country, and the unexplained wealth order will have no effect. We are keen to make sure that does not happen in Scotland or, indeed, in the rest of the UK.
Mr Wallace
The hon. Gentleman makes an interesting point and my response is “judicial discretion.” It is up to the sheriff or the judge to weigh up the evidence, and the individual or party, before him. The likelihood and ability that they may flee and so on may well come into that.
Richard Arkless
I completely understand and respect those points. The point of an unexplained wealth order is that the wealth is unexplained. We do not know the nature of the criminal. We know nothing about them. We have no idea whether they are likely to abscond. I suggest that it would be difficult for the judge to make that determination, and if he cannot do so under the Act, he will probably, as the judiciary is entitled to do, err on the side of caution and not implement the freezing order, but implement the unexplained wealth order.
Mr Wallace
The provision reflects the existing civil recovery arrangements in both Scotland and England. In other civil recovery procedures, that is how it is dealt with at the moment. That is why it is framed that way in the Bill.
I take the hon. Gentleman’s point concerning the worry about flight and so on, but if criminals are obviously residents of the UK or European economic area and there is a link to serious organised crime, those making the application cannot just turn up, but will have to present evidence, so there will be scrutiny and the judge or sheriff will be able to weigh up whether there should be a freezing order.
Richard Arkless
I accept that and am happy to support the clause. The Minister’s constructive response provides an opportunity to discuss this and to examine the legal points to ensure that criminals do not to fly with the cash before we can get our hands on it. No one wants that.
Mr Wallace
We can discuss that at length when we discuss the £50,000 threshold, which I am happy to do. As the hon. Gentleman knows, we are grateful to the Scottish Government with whom we have worked hand in hand on much of the Bill. Because we have accepted recommendations, advice and help from the Justice Minister in Scotland on some of the framing of the Bill, it is one we can agree on. We have accepted some of the guidance from the hon. Gentleman’s Government north of the border.
Question put and agreed to.
Clause 5 accordingly ordered to stand part of the Bill.
Clause 6
External assistance Disclosure orders
Question proposed, That the clause stand part of the Bill.
Mr Wallace
The clause supplements clauses 4 and 5 and provides that a request can be sent to another country to freeze property there that is subject to an unexplained wealth order. It is a Scotland-specific provision but closely mirrors what clause 3 provides in England, Wales and Northern Ireland.
Richard Arkless
I reiterate that we will not stand in the way of clause 6 standing part of the Bill.
Question put and agreed to.
Clause 6 accordingly ordered to stand part of the Bill.
Clause 7
Disclosure orders: England and Wales and Northern Ireland
Mr Wallace
The Proceeds of Crime Act 2002, which was introduced by the last Labour Government, provides a suite of powers to be used in connection with a range of investigations, including confiscation and civil recovery. A disclosure order is one of those powerful tools and requires any person having relevant information to answer questions, provide information or produce any document that is relevant to the investigation. Disclosure orders are flexible, practical and efficient. Their use avoids the need to seek multiple orders over the course of an investigation. The changes we are making extend the power to seek disclosure orders in money laundering investigations that were previously explicitly excluded. This exclusion was primarily because of concerns over self-incrimination. However, that protection is maintained in the new provisions, ensuring that individuals who are subject to a money laundering investigation cannot be compelled to provide information that might incriminate them.
Clause 7 also changes the definition of who can apply for a disclosure order, removing the need for a prosecuting body to be responsible for its application. Significantly, this change does not lead to a reduction in the level of seniority of the person who can apply. An appropriate officer can apply for a disclosure order only on the approval of the senior appropriate officer, ensuring that the application process is safeguarded. These changes will be reflected in the statutory code of practice on the investigation tools in the Proceeds of Crime Act 2002.
Clause 8 replicates in Scotland the provisions contained in clause 7 for England and Wales that enable an application for disclosure orders in money laundering investigations, providing an essential UK-wide response.
Dr Huq
I am convinced by the Minister’s persuasive words that red tape will be removed. We can apply for disclosure orders and yet maintain vital safeguards, so we will support clause 7 and clause 8, which extends the power to Scotland.
Question put and agreed to.
Clause 7 accordingly ordered to stand part of the Bill.
Clause 8 ordered to stand part of the Bill.
Clause 9
Power to extend moratorium period
Mr Wallace
I beg to move amendment 8, in clause 9, page 28, line 34, at end insert “(subject to the restriction mentioned in section 336A(6))”
This amendment clarifies that the 186 day maximum period for extending the moratorium period also applies to a decision of the appeal court in Scotland.
The Chair
With this it will be convenient to discuss Government amendments 15, 50, 51, 55, 56, 52, and 53.
Mr Wallace
Clause 9 inserts in part 7 of POCA a scheme for the extension of the suspicious activity report moratorium period beyond 31 days. As the action plan for anti-money laundering and counter-terrorist finance sets out, the Government see a more robust law enforcement response as central to tackling money laundering. It might help if I briefly explain how the suspicious activity report regime works.
Where a company in the regulated sector—a bank, an accountancy firm or a legal firm—suspects that they may commit a money laundering offence, they are obliged to submit a suspicious activity report to the National Crime Agency seeking consent to proceed. The National Crime Agency then has a seven-day period to determine whether it is necessary to refuse consent to the company to proceed with the transaction. If consent is refused, the 31-day moratorium period begins. During the moratorium period, law enforcement agencies need to gather the necessary evidence to instigate civil recovery proceedings or a criminal investigation in relation to the money laundering activity. However, money laundering investigations can be multi-layered and complex. Money launderers obfuscate the financial trail to distance proceeds from their criminal source; funds are often moved overseas.
New section 336A of the Proceeds of Crime Act 2002 states that the court may not grant a further extension of the moratorium period if the effect would be to extend the period of more than 186 days in total, beginning with the day after the end of the initial 31-day moratorium period. The amendment makes that clear. Amendment 15 replicates in Scotland what clause 28(2) already does for England and Wales. Amendments 52, 53, and 56 are consequential to that.
The criminal’s property, referred to in POCA as “free property”, which may be in the form of cash, is available for consideration in confiscation unless it is already subject to a forfeiture or deprivation order. When a court considers making a confiscation order under POCA, it must not take into account certain types of property when calculating the amount of the order. This is to ensure fairness to the defendant and prevent the double counting of assets.
Clause 28 amends POCA to clarify the situation in relation to cash that has been seized and is being detained pending the decision of a forfeiture application. Cash that is detained in anticipation of the forfeiture application being made is already excluded, so this is an extension of the existing principle in section 82 of POCA. The amendment extends that to Scotland. We hope to be making an equivalent amendment in respect of Northern Ireland in due course—we are awaiting their formal agreement.
Amendments 50 and 51 will correct an error in clauses 37 and 38, which incorrectly refer to England when they should refer to England and Wales. That is merely to ensure that the text of the Bill reflects the intent of the policy, which is for the measure to extend to England and Wales. Amendment 55 will correct another typographical error.
Dr Huq
It sounds as if the amendments are tidying up some sloppy mistakes. On the whole, however, I know that the SARs extension to the moratorium period was very much welcomed by the witnesses we heard from. I have seen that some law firms do not like the policy, but I think it is a good idea. The previous period of 31 days was not long enough. Does the Minister have an inkling of how many times the maximum would be used—I think it is 200 days?
Mr Wallace
The timescale is really just a reflection of what the investigatory agencies have said to us: that some of these cases are very complex. Some of the ways in which people hide their wealth—they sometimes freeze it themselves—and who they are mean that the process will take time. We want to ensure that our agencies have time to investigate, rather than being under the sort of pressure where effectively they run out of time. Those people exploit that. That is the reason for the longer period. Hopefully it will not be used, but the very fact that it is there will give power to the elbow of the agencies trying to do the job.
Dr Huq
I thank the Minister for his response. We support the proposal, but we have a concern, which will come up in a new clause at the end, about the architecture of crime fighting. There could be better resource for all the different agencies that will be looking at these issues and particularly for the ELMER IT system. It was envisaged that that system would deal with 20,000 SARs a year, but the figure is 380,000 at the moment and will probably rise even higher after the Bill is passed. That does not relate to the clause, but I wanted to sound a word of caution.
Richard Arkless
I have a very quick point to make on amendment 9. I apologise if I missed it—I had my head buried in some papers—but could the Minister clarify why Scottish Ministers are being removed from the list of people who can apply to the sheriff?
The Chair
Order. Amendment 9 is in the next group, which we have not quite moved on to yet.
Richard Arkless
My apologies, Sir Alan. I got ahead of myself.
Amendment 8 agreed to.
Mr Wallace
I beg to move amendment 9, in clause 9, page 29, leave out line 47.
This amendment removes a reference to the Scottish Ministers from the list of persons who may make an application to the sheriff for extending the moratorium period under new section 336A of the Proceeds of Crime Act 2002.
Mr Wallace
The amendments will remove references to Scottish Ministers from the list of persons who may make applications to the sheriff for extending the moratorium period and for making a further information order under the Proceeds of Crime Act 2002 or the Terrorism Act 2000. In our ongoing dialogue with the Scottish Government and with law enforcement partners, we have clarified that Scottish Ministers do not require those powers. In Scotland, they would be used by the Crown Office and Procurator Fiscal Service, the National Crime Agency, the police and HMRC in respect of the moratorium period and by the procurator fiscal, the police and the NCA in respect of further information orders. We are acting on the advice of the Scottish Government, with whom we have consulted extensively in the development of the Bill and will continue to do so. We are making these amendments to ensure that the new measure will work effectively in Scotland.
Richard Arkless
The Minister’s explanation was comprehensive and persuasive and accords with my understanding of the Government’s position. We will not stand in the way of the clause.
Mr Wallace
Clause 9 inserts in part 7 of POCA a scheme for extending the suspicious activity report moratorium period beyond 31 days. As the action plan for anti-money laundering set out, the Government see a more robust law enforcement response as central to tackling money laundering. I have already explained the SARs regime, so we do not need to hear about that again.
As the national risk assessment set out, the UK is vulnerable to abuse by professional enablers from the legal, accountancy and finance sectors. The level of expertise involved can make it difficult to progress a money laundering investigation substantially in only 31 days. That is particularly the case when the law enforcement agency needs to obtain evidence from overseas authorities, which is another reason for an extension for a further length of time—the hon. Member for Ealing Central and Acton asked why it needed to be so long—or to undertake complex asset-tracing inquiries. Accordingly, the moratorium period may be lifted and funds dissipated before the investigation has progressed sufficiently to determine whether civil or criminal proceedings should be undertaken.
We need to provide law enforcement agencies with an appropriate amount of time to undertake investigations. This clause provides for the extension of the moratorium period by a court for periods of up to 31 days. That can be repeated up to a total of 186 days from the end of the initial 31-day moratorium period. The hon. Lady is better at adding up than me, so she produced the right figure. Providing an extension of the moratorium period enables law enforcement officers to continue investigating particularly complex transactions, such as those involving overseas grand corruption or other serious crime. The clause ensures that proceeds of crime are not dissipated when there is a suspicion that money laundering activity has taken place and when the law enforcement agency has not had the opportunity to complete its inquiries.
The Government recognise that there may be concerns about the length of time for which an individual’s property could be withheld from them. The clause does not allow unlimited extension of the moratorium period. The court must approve the application to extend the moratorium period each time an extension is sought. Law enforcement agencies must demonstrate to the court that it is reasonable in all circumstances for the moratorium period to be extended. They must satisfy the court that the investigation is being carried out diligently and expeditiously and that further time is required to progress the investigation.
An application to extend the moratorium period will be made to the Crown court, which provides a senior level of judicial authorisation. The owner of the property will be able to make representations in person before the court and is provided with the opportunity to appeal the decision to extend the moratorium period. An application may be made only by a senior officer who has a remit to undertake financial investigation. A senior officer is at the police rank of inspector or equivalent.
Money laundering is an enabler of serious and organised crime. The clause will help to stop criminals profiting from their criminal behaviour. It gives our law enforcement agencies the time to progress critical investigations into money laundering where they have genuine reasons for being unable to progress their investigation substantially in 31 days.
Dr Huq
The Minister has put it very well. All the witnesses stated that 31 days was not enough. Here we have appropriate checks and balances. A legal procedure is gone through to extend the period; it cannot be open-ended; and appeals procedures are built in. The Minister also praised my maths, which never happens normally—I am a qualitative person usually—so for that reason as well as all the other reasons, we will not stand in the way of the clause.
Question put and agreed to.
Clause 9, as amended, accordingly ordered to stand part of the Bill.
Clause 10
Sharing of information within the regulated sector
Question proposed, That the clause stand part of the Bill.
Mr Wallace
The clause introduces a new provision into the Proceeds of Crime Act 2002. As the action plan for anti-money laundering also set out—it seems to make a regular appearance—the Government see public-private partnership as central to tackling money laundering and terrorist financing. A major part of that approach is to provide support for the effective exchange of information, both within the private sector and between the public and the private sectors, to increase our collective knowledge of threats and vulnerabilities, to help the regulated sector to protect itself and to improve the quality of the UK’s financial intelligence.
Both the private sector and law enforcement agencies hold significant amounts of information that can be of great use to each other. The private sector holds data on financial transactions and related personal data; law enforcement agencies hold intelligence on money laundering and terrorist financing. When those data have been shared, there have been benefits to both sectors.
Dr Huq
I described joined-up thinking in my remarks on amendment 2. The Minister has reassured us. I have seen that some people have civil liberties concerns, but he has told us that the sharing of information will be a last resort in extreme cases, and that it will happen largely on a voluntary basis anyway.
The Government action plan on money laundering said that what is needed is a
“collaborative approach to preventing individuals becoming involved in money laundering.”
It discussed different agencies, supervisors and the public and private sectors working together. The clause does all those things, and we support it.
Question put and agreed to.
Clause 10 accordingly ordered to stand part of the Bill.
Clause 11
Further information notices and orders
Amendment made: 10, in clause 11, page 38, leave out line 2.—(Mr Wallace.)
This amendment removes a reference to the Scottish Ministers from the list of persons who may make an application to the sheriff for a further information order under new section 339ZJ of the Proceeds of Crime Act 2002.
Question proposed, That the clause, as amended, stand part of the Bill.
Mr Wallace
Clause 11 creates a new power to issue further information orders. In the anti-money laundering action plan the Government set out our commitment to improving the financial intelligence that would be available to both the law enforcement agencies and the private sector. Improving our financial intelligence is essential to allow the identification of the major risks from money laundering, and to identify where resources from both the public and private sectors should be focused.
The action plan also contained a commitment to do more to tackle money laundering internationally, through sharing information and intelligence, and working through international bodies such as the Financial Action Task Force. The suspicious activity reports regime, run by the UK Financial Intelligence Unit at the National Crime Agency, is central to the UK anti-money laundering regime, and to the development of financial intelligence. The regime took more than 380,000 reports in 2014-15 from the regulated sector, including banks, lawyers and accountants.
Clause 11 will allow the UK Financial Intelligence Unit, following the receipt of a suspicious activity report, to request further information from any member of the regulated sector, irrespective of whether that entity raised the SAR.
There are a number of reasons why the UKFIU needs such a power. First, there are occasions where the SAR does not contain all the information necessary to allow the UKFIU to determine whether action, including an investigation, should be undertaken. That is particularly important when determining how scarce resources should be allocated. The intention is to drive up the quality of SARs and to enable improved intelligence analysis for the better identification of risk and threat.
Secondly, the UKFIU can use the power when it needs information in order to develop effective intelligence to identify the major threats from money launderers. That intelligence will be used to inform the work of law enforcement agencies and can be shared with the private sector to help them put in place effective counter-measures to the threats they face from money laundering.
Thirdly, it will allow the UKFIU to seek further information on behalf of a foreign financial intelligence unit to support investigations or intelligence development in that country. That will be subject to the appropriate safeguards, and the UK will benefit from the ability to request equivalent information from foreign financial intelligence units. The provision will also ensure that the UK is compliant with the relevant Financial Action Task Force recommendations ahead of the its evaluation of the UK anti-money laundering regime in 2018.
The clause will allow the National Crime Agency to direct that further information is provided and, if it is not provided, to apply to a court for a further information order to require the person to provide the information requested. We are keen to support appropriate information sharing between financial intelligence units, and we know that FATF and its members want to do more in that area. Incidents such as the attacks in Paris, where financial intelligence was needed to support the investigation, illustrate the need to be able to share such information. However, I would like to be clear that there should be safeguards in place for international information sharing. As with a request driven by the NCA itself, a court order will be required where a regulated entity does not provide information if requested to do so by the NCA. That in itself is an important safeguard. I am, as ever, open to discussing this issue with hon. Members if it is felt that additional safeguards may be appropriate.
On a separate point, I know that the issue of privileged information is of concern to Members, and I want to be clear that the UK Financial Intelligence Unit will not be able to request the provision of privileged information as part of this measure. This is an important safeguard for those who hold such information, and we do not believe that it should be requested under this power.
Dr Huq
It appears that the clause enacts some of the recommendations of the action plan for anti-money laundering and counter-terrorist finance that the Government issued in April 2016. We will support the clause.
Question put and agreed to.
Clause 11, as amended, accordingly ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned. —(Andrew Griffiths.)
Criminal Finances Bill (Fourth sitting)
Thursday 17th November 2016
(7 years, 5 months ago)
Public Bill CommitteesRead Full debate Criminal Finances Act 2017 View all Criminal Finances Act 2017 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 17 November 2016 - (17 Nov 2016)
Richard Arkless (Dumfries and Galloway) (SNP)
I beg to move amendment 58, in clause 12, page 40, line 1, and end insert—
“(g) betting slips;
(h) casino chips.”
This amendment includes betting materials that can be used to store the proceeds of criminal activity.
Richard Arkless
Amendment 58 would extend the definition of “listed asset” in proposed new section 303B of the Proceeds of Crime Act 2002 to include betting slips and casino chips. The Minister helpfully acknowledged on Second Reading that he would consider tabling an amendment to deal with those two means of retaining value, and I understand that new clause 10 has been tabled in that regard.
Although I fully commend the spirit of new clause 10, it will achieve that change not by adding to the definition of listed asset but by expanding the definition of cash to include gaming vouchers and fixed-value casino tokens. On the latter, we are in agreement: in effect, the new clause does what it says on the tin. It will extend the meaning of cash and therefore make fixed-value casino tokens catchable. Our concern is that “gaming voucher” is specifically defined in new clause 10 as
“a voucher in physical form issued by a gaming machine”.
We do not believe that that covers betting slips. Therefore, although we welcome the tone and construct of new clause 10, we feel that there is one means of retaining value that it does not cover, and that is covered in amendment 58.
The Minister for Security (Mr Ben Wallace)
I am grateful to the hon. Member for Dumfries and Galloway for his amendment, which was set out in his party’s manifesto for this year’s Scottish Parliament elections. The Government take this issue seriously, as do the Scottish Nationalist party and the Scottish Government.
As we have heard, to avoid detection, criminals use a range of means to transfer value among themselves. Law enforcement agencies and prosecutors—particularly those operating in Scotland—have made us aware of criminals’ use of gaming vouchers and casino chips to do that. There has been media coverage of drug dealers using fixed odds betting terminals to convert cash obtained from street drug dealing into vouchers issued by those machines. Those vouchers can either be converted into cash at the bookmaker, thus laundering the funds, or transferred to another person to pay the drug dealer’s debts.
The Proceeds of Crime Act contains provisions that enable law enforcement agencies to seize cash, but those provisions do not extend to the type of criminal tactic that I have just described, so clauses 12 and 13 seek to allow those agencies to freeze, seize and seek forfeiture of illicit funds held in bank accounts and other forms of criminal property used to transfer value. It has always been the Government’s intention to include gambling vouchers and casino chips in those provisions, as I made clear on Second Reading. When the Bill was introduced, we were still looking at the best way of achieving that in legislation, but I tabled new clause 10 on Monday—I apologise for doing so at the beginning of the Committee stage and not giving hon. Members more time to look at it—which will add gambling vouchers and casino chips to the definition of cash in the Proceeds of Crime Act and allow law enforcement agencies to seize those items on the same basis as they can seize cash, where their individual or aggregate value is more than £1,000.
Officers will have to demonstrate to a court that they have reasonable grounds for suspecting that vouchers or casino chips are either proceeds of crime or intended for use in unlawful conduct. That is an important safeguard that we apply to all forms of seizure. Law enforcement agencies will need to show why they seek the detention of the property, and will be able to seek administrative forfeiture of vouchers or tokens, or the agreement of a court. In all cases, an individual who believes that such vouchers or tokens are theirs legitimately will be able to challenge their detention or forfeiture.
I turn to the hon. Gentleman’s point and why we have used the term “gaming vouchers” rather than “betting slips”. In discussions with law enforcement agencies, we have identified that there is a major concern about the laundering of proceeds of crime through machines that provide a guaranteed return if they are played in a certain way. Those machines produce pay-out vouchers with a value that can then be cashed in. Betting slips, such as those used for horse racing, are used for betting with no guaranteed return and, therefore, are much more risky for use in money laundering.
However, once the points had been raised by the hon. Gentleman, I asked officials to examine whether there is potential to extend the Bill to ensure that we cover betting slips as well. As someone who likes the horses and knows his way round a losing—rather than a winning —bet, I understand that the ability to exploit that type of bet could potentially lead to such money laundering.
Carolyn Harris (Swansea East) (Lab)
The Minister may be aware that I am the Chair of the all-party group on FOBTs. I have grave concerns about bookmakers not reporting unusual and excessive activity on B2 machines by people who would not normally have that kind of disposable income. Is the Minister satisfied that leaving it up to the betting industry to self-report is adequate?
Mr Wallace
If memory serves me right, the Gambling Commission has the power to carry out a range of investigations and to impose conditions on bookmakers. I hear the hon. Lady’s point loud and clear. I have the same concern in my part of the world in the north-west about whether bookmakers are properly regulated and carrying out their obligation to report suspicious bets, as they currently do under the law. That is more a question of whether we are doing enough to enforce the law. Existing laws are quite strong, though some bookies’ shops—I suspect, as she does—have a way to go. If criminals know that we can seize their FOBT print-outs, they might be less likely to stick their money in the FOBT in the first place. We have put provisions in the Bill because they are pretty canny. When POCA came in in 2002, they realised that we could seize cash, so off they went. They are pretty good at moving the cash. No doubt, one day we will be back again, maybe saying that they have used telephone cards or whatever, and we will have to adapt the legislation in time.
The Government’s amendment chooses to put the provision into POCA, as opposed to the route chosen by the Scottish Nationalist party, because we believe that these items are better placed in cash provisions, because they have no real use other than to be turned into cash. The listed items of moveable property have an intrinsic use as well as being a store of value, and they need to be dealt with under the provisions that we have introduced into the Bill.
The listed items of moveable property clause also contains detailed provision about dealing with non-severable property and competing joint-owner claims that are not relevant to gambling vouchers. As I said, we are considering this as part of the Treasury’s review of regulation under the change to the fourth anti-money laundering directive when it comes to self-reporting of suspicious activity and fixed odds betting. That is under review by the Treasury as well, so I hope everyone will get their collar felt if they do not comply with one directive or another.
I hope hon. Members will agree that that would achieve the results they were after and, accordingly, I invite them to withdraw their amendment.
Richard Arkless
I thank the Minister for his comments and it is clear that extending the definition of cash, as the Government intend in the Bill, achieves the same outcome as we desired in extending the list of assets. I accept the Minister’s point that those assets have an intrinsic value, and perhaps the other ones are best suited to the extension of the definition of cash.
On the basis of the Minister’s commitment to examine the specific issue of betting slips and if we can agree that the evidence suggests that they are a moveable item that can store value that could be easily used by criminals, I am sure—given his tone—that we could discuss that further down the line. Given that assurance and the long list of things that we will consider as the Bill passes through its stages, I will take the Minister at his word. On that basis, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
Mr Wallace
As a former Member of the Scottish Parliament, I might be accused of favouring one part of the United Kingdom over another with all the concessions.
Richard Arkless
Given the Minister’s time in Scotland, he might want to refer to my party as the Scottish National party, not the Scottish Nationalist party.
Mr Wallace
Well, I will not say what we used to call it when I was in the Scottish Parliament. We will call it the SNP. I never say “separatists”, obviously.
Clause 12 will create new powers to seize and forfeit moveable items of property where they are suspected to be the proceeds of crime. Criminals launder the proceeds of their crimes to benefit from their criminal activity and carry it on. They are resourceful in using any mechanism to hold and move illicit funds, and we need to ensure that we are able to respond to that threat. Criminals hold the proceeds of crime in a variety of forms, which act as a store of value and a means through which such value can be transferred. Some, such as cash, gold and diamonds, can be easily moved or concealed. In some cases, these items can be readily sold for cash or dissipated through other means.
We want to take action to prevent criminals from transferring their illicit funds however they choose to do it, and the clause should be seen as part of a framework for seizing such assets, alongside the existing cash seizure provisions in the Proceeds of Crime Act and the new provisions in clause 13 for the freezing and forfeiture of funds held in bank accounts.
The cash seizure and administrative forfeiture procedures in POCA were designed to prevent cash from being moved or dissipated in the time that it would take to seek a restraint order. Cash seizure is widely used, both inland and at the UK border. The existing legislation does not allow law enforcement agencies to take the same action in the case of other highly mobile stores of value. Evidence suggests that those items are being used to move value both domestically and across international borders.
The clause will give law enforcement agencies new powers to seize and forfeit certain listed items, such as precious metals and stones, where they have reasonable grounds to suspect that those items are the proceeds of crime or are intended for use in unlawful conduct. The clause will strengthen law enforcement agencies’ ability to disrupt criminal funding by preventing value from being transferred and enable the recovery of criminal property.
The Bill sets out the list of items that can be seized by agencies. The list has been drawn from discussions with law enforcement agencies and from reviewing the approach taken by other states. We have set the minimum value level for the seizure of listed items at £1,000, which is the same as for cash. There will be no upper limit, again mirroring the existing cash provisions. We have set no higher limit, as we believe there are potential circumstances where the value of the item is likely to be significant, and law enforcement agencies need the power to seize the item if there is reasonable suspicion that it is the proceeds of crime. There is evidence of that, particularly in relation to works of art being used to store illicit value and then transferred internationally. Some Members might have heard last week that a French impressionist painting was discovered in a mafia house. Should we discover one of those in the United Kingdom, I do not think we would like to cap what we could seize. I want to be clear that we do not intend that this power should be used indiscriminately. That is why the power can be used only in respect of certain listed items and is subject to oversight by a court.
We have also introduced two additional safeguards. First, within six hours of the seizure, a senior officer must review the seizure and authorise the continued detention. Secondly, we are not, in these cases, permitting administrative forfeiture. That procedure is available in the existing cash forfeiture system and allows a law enforcement agency to forfeit cash without obtaining a court order, in circumstances where the owner does not object. Owing to the possibility of greater complexity of the cases, such as property being jointly owned and difficult to sever, administrative forfeiture is not appropriate. We want to ensure that law enforcement agencies have the powers they need to seize such items. At present, there is a short list, but we intend that it will be amended over time to reflect changes in criminal behaviour.
Dr Rupa Huq (Ealing Central and Acton) (Lab)
Amendment 58 looks quite attractive. The hon. Member for Dumfries and Galloway and I served together on the Select Committee on Justice and went to America. I was quite tempted by his amendment, but I am now reassured by the Minister that Government new clause 10 addresses those concerns. It is added to the list for the ever longer meeting they will have.
Mr Wallace
I am not an art historian or expert. We would probably get Philip Mould from the television to come along. In reality, like with everything else, there is probably a proper valuation process held and items are disposed of that way. If they wanted my services, I would be useless.
The Chair
Order. To help the hon. Lady, I think she will find that, in the evidence produced on Tuesday, one of the witnesses from Her Majesty’s Revenue and Customs said that they recovered assets and then called in experts who valued them.
Dr Huq
Thank you, Sir Alan. I guess there is a serious point behind this: sometimes it is unclear who is the prime enforcer. We want some reassurance, which I am sure will come, that structures are in place, but we are big fans of the clause on the whole.
Question put and agreed to.
Clause 12 accordingly ordered to stand part of the Bill.
Clause 13
Forfeiture of money held in bank and building society accounts
Question proposed, That the clause stand part of the Bill.
Mr Wallace
The clause introduces a new provision into the Proceeds of Crime Act 2002. Criminals need to launder the proceeds of their crimes to carry on their criminal activity. As I outlined on clause 12, we need to ensure that we are able to respond to that threat.
POCA already contains provisions for the seizure of cash, but we do not have an equivalent power to take quick and effective action against funds held in bank accounts, and criminals know that. Given the use made by criminals of the banking system, we need to plug that gap. At present, it is difficult for law enforcement agencies to take action against many such accounts because their values are below the limits for civil recovery. The clause will allow the police or the National Crime Agency to seek the freezing and forfeiture of those funds.
The clause will give law enforcement agencies new powers to freeze and forfeit funds held in bank and building society accounts. The measure will have two significant effects. First, it will be easier and quicker for law enforcement agencies to seize the illicit funds held by criminals who abuse the banking system to store and transfer the proceeds of their crime. Secondly, it will also make it clear to criminals that we can take immediate and effective action against their abuse of the financial system.
The provisions we are putting in place will support the forfeiture of funds in bank accounts that have been suspended by the banks when they have serious concerns regarding the use of the accounts. The banks welcome the certainty that will bring. The provision will of course be accompanied by appropriate safeguards. An account cannot be frozen unless there are reasonable grounds to suspect that the funds in it are the proceeds of crime or will be used to fund criminal activity. The freezing of an account will be overseen by a court, which will be able to make an exclusion to allow the account to be used to support a person’s reasonable living expenses or to continue to run a legitimate business.
Forfeiture can be undertaken administratively by the law enforcement agency exercising the provision in uncontested cases. When the forfeiture application is contested, the matter will be decided by the court. The funds in the account will not be transferred to the law enforcement agency account until the forfeiture order is made. I hope that sufficiently reassures the Committee about the need for the power and how it will be used.
Dr Huq
It sounds like there will be sufficient judicial oversight in this space. We know that a lack of bank regulation previously led to some nasty incidents in our history, so we support the clause.
Question put and agreed to.
Clause 13 accordingly ordered to stand part of the Bill.
Clause 14
Serious Fraud Office
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
That schedule 1 be the First schedule to the Bill.
Clauses 15 and 16 stand part.
Government amendment 11.
Government new clause 9—Immigration officers.
Mr Wallace
We come to chapter 4 of the Bill. This group concerns clauses 14 to 16, schedule 1, amendment 11 and new clause 9, which relate to provisions that grant officers of a number of agencies access to new powers under the Proceeds of Crime Act.
Clause 14 and schedule 1 amend POCA to grant officers of the Serious Fraud Office direct access to the wide range of powers under POCA without the unnecessary existing step of their having first to be accredited and monitored as accredited financial investigators by the National Crime Agency. We are also granting officers access to the new powers proposed elsewhere in the Bill, including the power to extend the moratorium period under clause 9 and the new seizure and forfeiture powers in clauses 12 and 13.
It is, of course, only right that those using the intrusive powers provided by POCA are trained and monitored to ensure that the powers are not misused. However, officers of the SFO are experienced and well trained in the use of POCA powers and have appropriate oversight arrangements.
Clauses 15 and 16 amend part 5 of POCA to grant the powers for the civil recovery of assets to both HMRC and the Financial Conduct Authority. Expanding the civil recovery powers to HMRC and the FCA will improve both the capability and capacity for civil recovery. It will ensure they have access to the full suite of investigatory powers to support them in their civil recovery investigations. The use of those powers is governed by an existing code of practice, which will be amended. The Bill will also enable the SFO, HMRC and the FCA to apply for unexplained wealth orders. As we have discussed, the civil recovery provisions in POCA are robust and powerful, and giving additional bodies access to those powers will strengthen the UK’s overall response to serious and organised crime.
Clauses 12 and 13 provide for new freezing, seizure and forfeiture powers. At present, the Bill allows the police, the National Crime Agency, the SFO and accredited financial investigators to use those powers. Amendment 11 and new clause 9 will extend the use of those important new powers to immigration officers to support their investigations into immigration offences and to take action against criminal property that is the proceeds of immigration crime, or that is being used to fund further immigration offences. Those officers will also be able to seize suspected criminal property obtained through offences unrelated to immigration if they encounter them during immigration investigations. The amendment will strengthen the UK’s ability to tackle money laundering and will allow for the seizure of more criminal assets.
Dr Huq
We will support the clause. However, the amendment will lead to an increased workload for agencies such as the SFO and others. Our new clause will be debated later, but we would like an assurance that the blockbuster funding model that they currently operate, which seems to momentarily splash cash, will be replaced with some sort of consistent funding model, because their workload is going to increase and the investigation time in the courts is increasing. That is my only caveat.
Mr Wallace
In response to the hon. Lady, some of the measures in the Bill actually make their jobs easier. Although it might give them more people to catch, the fact that they are going to have disclosure orders and that they will be able to use things such as unexplained wealth orders as an investigatory measure, and the fact that we are going to improve the subject access request data sharing regime, so that the private sector produces more quality referrals rather than just a blurb of quality, will hopefully make their jobs easier when it comes to an investigation. In one sense, all of those barriers that they have to get through at the moment will be removed, which, hopefully, will make them more productive.
I recognise the hon. Lady’s point about the funding of the SFO and other agencies. Under the comprehensive spending review and the SDSR, we found quite a lot. SFO officers are already doing this work. It is here to be—[Interruption.] My writing is appalling. One of the reasons we want to remove their need be accredited financial investigators is that that is another hurdle that will get in their way and make them less productive, so we have removed some of those issues.
Dr Huq
It is the NCA as well. Both of those big reports from the Home Affairs Committee and the Public Accounts Committee said that there should be more consistent funding, but I am not going to let that niggle get in the way right now because we have a whole clause on that coming at the end.
Question put and agreed to.
Clause 14 accordingly ordered to stand part of the Bill.
Schedule 1 agreed to.
Clauses 15 and 16 ordered to stand part of the Bill.
Clause 17
Search and seizure warrants: assault and obstruction offences
Question proposed, That the clause stand part of the Bill.
Mr Wallace
This clause, and those that follow, fill a gap in the general law relating to those who conduct investigations of being placed in danger of being assaulted or obstructed. It is a general offence to assault another person, but in addition to that, police officers and HMRC officers are protected by specific offences that relate to the obstruction or assault of those officers in the course of their duties.
There are two very good reasons for specific offences. Those officers, by the very nature of their actions and work, face a much higher danger and likelihood of being assaulted. For example, they often enter the residences of serious criminals. I am sure the Committee sees that that is a wholly different scenario from what is envisaged in the general offence of assault. We, as law-abiding citizens, are not actively placing ourselves in situations that put us in danger.
Although we are unaware of any prosecutions relating to the assault or obstruction of police officers or others while exercising powers under the Proceeds of Crime Act, there is wide recognition that it is an important safeguard. It is a gap in the law that under POCA, investigators of certain agencies are put in situations where they could be assaulted or obstructed, and yet there are no connected offences. Section 453A of POCA has already created assault and obstruction offences for civilian accredited financial investigators operating under the Act. The clause provides that those who can execute search and seizure warrants in civil recovery investigations have a similar protection.
Dr Huq
We have had two good debates on the Floor of the House recently about the assault of police officers. These are very good provisions, and we are happy to support them.
Question put and agreed to.
Clause 17 accordingly ordered to stand part of the Bill.
Clause 18
Assault and obstruction offence in relation to SFO officers
Question proposed, That the clause stand part of the Bill.
Mr Wallace
The clause addresses a gap in the law relating to those who conduct investigations being placed in danger of being assaulted or obstructed. Much of what I said in relation to clause 17 also applies here. We are extending powers to SFO officers elsewhere in the Bill—in clause 14 and schedule 1, as well as clauses 12 and 13. In doing so, we place them in the position of being vulnerable to being assaulted or at least obstructed.
Unlike the police, HMRC officers and others, there is no specific offence that relates to SFO officers who are assaulted or obstructed in the course of their duties in general. The Bill therefore creates one to support the more general provisions of extending powers to the SFO. SFO officers currently access the powers in POCA as accredited financial investigators, and there are offences of assault and obstruction that relate to them. As accredited financial investigators, they are therefore protected by the offences in section 453A. The clause will simply copy the same approach, to reflect the fact that they will be able to operate the powers in their own right.
Dr Huq
This appears to us an entirely logical extension of the anti-assault powers. I know that taxmen are not always the most popular people, but I think MPs and used car salesmen are the most unpopular in the rankings of professions. We thoroughly support the clause.
Question put and agreed to.
Clause 18 accordingly ordered to stand part of the Bill.
Clause 19
Obstruction offence in relation to immigration officers
Amendment made: 11, in clause 19, page 72, line 36, at end insert—
“( ) section 303C as so applied (powers to search for a listed asset);
( ) section 303J as so applied (powers to seize property);
() section 303K as so applied (powers to detain seized property);”—(Mr Wallace.)
This amendment is consequential on NC9.
Question proposed, That the clause, as amended, stand part of the Bill.
Mr Wallace
This clause is similar to clauses 17 and 18. It addresses the need for an offence of obstruction, in this case to apply to immigration officers. Much of what I have already said in relation to such an offence also applies here. Under section 21(1)(g) of the Immigration Act 1971, a person commits an offence if they obstruct an immigration officer who is lawfully acting in accordance with their powers under that Act. That obstruction offence does not apply to the exercise of powers under the Proceeds of Crime Act.
As immigration officers now regularly use their powers under POCA—in particular since the extension of those powers in the Crime and Courts Act 2013—it is consistent for them to have a related obstruction offence. The clause amends POCA to create such an offence. Immigration officers are already covered by a general assault offence under section 22 of the UK Borders Act 2007, so no further provision is required in relation to assault. We are also amending immigration officers’ power of arrest without warrant to include this new offence.
Dr Huq
Again, Her Majesty’s Opposition entirely support this clause in relation to obstruction of immigration officers in the line of duty.
Question put and agreed to.
Clause 19, as amended, accordingly ordered to stand part of the Bill.
Clause 20
External requests, orders and investigations
Question proposed, That the clause stand part of the Bill.
Mr Wallace
Clause 20 makes a technical change, consequential to clause 18. Under section 444 of POCA, an Order in Council can be made to set out the procedure for providing assistance to other countries in freezing and confiscating property in the UK that is related to their cases. The Order in Council can create provisions that correspond to those available in our own domestic cases. The clause ensures that any offence created relating to the assault or obstruction of an SFO officer mirrors the one that we are creating domestically under clause 18. I hope the clause stands part of the Bill.
Dr Huq
Again, we have heard that these criminals often do not respect borders and maps, so we support the move to extend the provisions to external requests.
Question put and agreed to.
Clause 20 accordingly ordered to stand part of the Bill.
Clause 21
Seized money: England and Wales
Mr Wallace
I beg to move amendment 12, in clause 21, page 73, line 17, at end insert—
“( ) In subsection (2), for paragraphs (a) and (b) substitute—
“(a) has been seized under a relevant seizure power by a constable or another person lawfully exercising the power, and
(b) is being detained in connection with a criminal investigation or prosecution or with an investigation of a kind mentioned in section 341,”.
( ) After subsection (2) insert—
“(2A) But this section applies to money only so far as the money is free property.”
( ) Omit subsection (3).
( ) In subsection (5), for “bank or building society” substitute “appropriate person”.
( ) In subsection (5A), at the beginning insert “Where this section applies to money which is held in an account maintained with a bank or building society,”.
( ) In subsection (7A), after “applies” insert “by virtue of subsection (1)”.”
This amendment broadens the circumstances under section 67 of the Proceeds of Crime Act 2002 in which a court may order detained money to be paid in satisfaction of a confiscation order, by providing that the section applies to money that has lawfully been seized by any person (rather than only by constables) under a relevant seizure power, and by removing the requirement that the money is held in an account maintained with a bank or building society.
Mr Wallace
Amendments 12, 13 and 14 are a logical extension of powers that are already within POCA. Section 67 of POCA provides the magistrates court with a power in relation to money seized by the police or HMRC under the Police and Criminal Evidence Act 1984 that has to be paid into a bank or building society account. The court can order that money be paid to the court in satisfaction of a confiscation order. The money still belongs to the criminal. Therefore, section 67 avoids the ridiculous scenario of money being paid back into the criminal bank account when there is an outstanding confiscation order to pay. The amendments do not break new ground, but extend the established logic of section 67. When the police have possession of a criminal’s money, they should be able to transfer that across in the payment of a confiscation order, rather than return it to the criminal.
The amendments do three things. First, section 67 currently applies only to police and HMRC officers. The amendments effectively extend the powers to law enforcement officers who have the power to seize money, including immigration officers and SFO investigators. Secondly, the provision will now apply to money that has been seized under any power relating to a criminal investigation or proceeding, or under the investigatory powers in POCA. Instead of being limited to money seized under the Police and Criminal Evidence Act, this removes an unnecessary restriction. Many other powers of seizure should come from this provision’s scope, such as those in the Immigration Act 2016.
Thirdly, section 67 currently applies only to money that has been paid into a bank or building society account. That is another false limitation. For example, if money has evidential value it will not be paid into an account. It may be required at a trial as evidence that it is contaminated with a trace of drugs or explosives. It would be odd that a convicted drug trafficker with an outstanding confiscation order has his money returned by the police purely because that money was used as evidence in his trial, and not paid into his bank account.
There was no provision equivalent to section 67 in Scotland. Section 67 applied in England and Wales, and was similar to section 215 for Northern Ireland. I draw the Committee’s attention to clause 23, which introduces a similar power in Scotland. In constructing clause 23, we have been made to rethink the scope of section 67. We have come to the conclusion that it should be extended in the ways I have just described. We are also looking into whether to make similar amendments to the powers being introduced in Scotland and to the existing powers in Northern Ireland, and I will update colleagues in due course. I am sure the Committee will agree that this is an entirely sensible extension of the existing power to support the enforcement of confiscation orders.
Dr Huq
We do not oppose the amendment.
Amendment 12 agreed to.
Amendments made: 13, in clause 21, page 73, line 18, leave out subsection (2) and insert—
“( ) For subsection (8) substitute—
(8) In this section—
“appropriate person” means—
(a) in a case where the money is held in an account maintained with a bank or building society, the bank or building society;
(b) in any other case, the person on whose authority the money is detained;
“bank” means an authorised deposit taker, other than a building society, that has its head office or a branch in the United Kingdom;
“building society” has the same meaning as in the Building Societies Act 1986;
“relevant seizure power” means, subject to subsection (9), a power to seize money conferred by or by virtue of—
(a) a warrant granted under any enactment or rule of law, or
(b) any enactment, or rule of law, under which the authority of a warrant is not required.
(9) A power to seize money conferred by Schedule 1 to the Anti-terrorism, Crime and Security Act 2001 is not a “relevant seizure power” for the purposes of this section.”
This amendment defines terms used in amendment 12 and makes a consequential change to the Bill.
Amendment 14, in clause 21, page 73, line 23, leave out “subsection (8)(a)” and insert—
“the definition of “bank” in subsection (8)”.—(Mr Wallace.)
This amendment is consequential on amendment 13.
Question proposed, That the clause, as amended, stand part of the Bill.
Mr Wallace
The clause is a technical amendment to POCA, specifically to update references to the definition of “bank” in three sections. The current reference in POCA is to the Banking Act 1987, which was repealed in December 2001, before POCA was commenced. The reason for its repeal was to remove bank regulation from the Bank of England, and to make it independent. Although no universal definition of a bank was given in the Banking Act, and nor is there any such definition in the subsequent legislative changes, a bank is defined by its activity as a deposit taking institution.
The only references in POCA affected by the change are those in three sections: section 67, section 215, and paragraph 6 of schedule 3. In addition, the definition will apply for the purpose of the new powers in the Bill to freeze and forfeit funds in a bank account.
Section 67 provides that where a confiscation order is made against a person, and moneys belonging to that person are held in a bank or building society account maintained by the police or HMRC, those institutions can be ordered to pay those moneys to the court. Section 215 makes equivalent provisions for Northern Ireland, and paragraph 6 of schedule 3 to POCA refers specifically to a Scottish provision relating to the deposit of certain moneys by an administrator into an “appropriate bank or institution”.
These changes replicate, as much as possible, the previous provisions, while recognising that the legislation in the area has now changed. I hope the clause will stand part of the Bill.
Dr Huq
Once again, I am proud that the Proceeds of Crime Act was a Labour Act that we pushed through when we were in government. It is now being updated to reflect contemporary circumstances.
Question put and agreed to.
Clause 21, as amended, accordingly ordered to stand part of the Bill.
Clause 22
Seized money: Northern Ireland
Question proposed, That the clause stand part of the Bill.
Mr Wallace
Clauses 22 to 28 contain a number of minor and technical amendments that will strengthen the operational impact of POCA powers. The clauses clarify and simplify the use of powers intended to recover criminal assets, and I will very briefly expand on those particular provisions.
Clause 26 makes technical amendments to the process that accredited financial investigators follow when seeking approval to use certain POCA search and seizure powers. Accredited financial investigators are not warranted officers, but may be employed by a police force or another public body. They have access to a wide range of powers under POCA, including certain search and seizure powers. They have access to search and seizure powers to seize property that may be subject to a future confiscation order. In order to use those powers, an accredited financial investigator has to seek the prior approval of either a justice of the peace or a senior officer. Currently, POCA only allows a civilian AFI to seek the approval from a senior AFI, as opposed to a senior police officer. This is not always practical from an operational point of view and creates an additional layer of bureaucracy. This measure allows civilian accredited financial investigators to seek authorisation from a police colleague who is at least the rank of inspector and therefore of equivalent seniority, thereby creating additional flexibility.
Clause 27 provides that an investigator has full access to investigation powers in section 22 revisits. Section 22 of the Proceeds of Crime Act allows an investigation to revisit any confiscation order so that any money acquired by a defendant in the future may be confiscated and satisfy a previous order. Currently, it is open to question whether an investigator’s ability to identify money made by the defendant using the investigatory powers in POCA—for example, by monitoring bank accounts, searching property or requiring the production of evidence —is available for investigations linked to revisits. Clause 27 strengthens investigative powers, making confiscation revisits more effective and helping to make best use of the resources being put into revisiting confiscation orders.
The remaining clauses clarify process and definitions to allow for the more effective recovery of criminal assets. Although minor and technical, these amendments are important measures that allow for the proper functioning of POCA. I hope that the clauses will stand part of the Bill.
Charlie Elphicke (Dover) (Con)
It is a pleasure to serve under your chairmanship, Sir Alan, and to make my first speech before this illustrious and most distinguished Committee. I have a few queries for the Minister on these important clauses. Part of the concern about POCA in the past has been that it has not always worked quite as well as it should have; it has a slightly chequered history when it comes to making sure that the proceeds of crime are, in fact, captured for the state.
First, looking at the miscellaneous provisions relating to Scotland, we are told that clause 23 is intended to replicate in Scotland the effects of section 67 for England and Wales, and section 215 for Northern Ireland, with certain modifications. It provides for the High Court of Justiciary or the sheriff, as the case may be, to order that any realisable property in the form of money held in a bank or building society account is paid to the appropriate clerk of court in satisfaction of all or part of the confiscation order. It would be helpful if the Minister could say why exactly those provisions are needed and how they will ensure that POCA works more efficiently. I am sure that will be a matter of concern to the spokesman for the Scottish nationalist party [Hon. Members: “Scottish National party.”] Oh, Scottish National party—or is it the Scottish neverendum party? I get confused, but I have a one in three chance of being right on one of them. That deals with the concern that I had on Scotland.
We are discussing clauses 23 to 28, are we not? Clause 24 deals with recovery orders related to heritable property. The proposed measure is to remove existing jurisdictional and procedural barriers that can delay the recovery of the possession of heritable property. For those who are not fully up to speed on what heritable property is, and for the benefit of colleagues and Members of the Committee, it is a house, flat, commercial premises and like real estate. I would ask why there were jurisdictional and procedural barriers in the first place and how they would be dealt with by this provision. The clause also says that, where a recovery order is granted, the property automatically vests in the trustee for civil recovery and the previous owner-occupier loses his or her title, since the owner-occupier of the property is subject to the recovery order and has no right or title to occupy the property. The appropriate way to recover possession in those circumstances is by warrant for ejection.
I want to check that there will not be any delay in getting such a warrant and that the procedural aspects are considered likely to work efficiently and swiftly. I also want to ask what the situation would be if there are any sitting tenants in the heritable property to which a recovery order applies. Would such sitting tenants be ejected or would they be able to see out the length of their tenancy?
A house might be owned by a crook who might have let that house to some innocent people, members of the hard-working classes of modern Britain, who suddenly find that their home is seized because that crook is brought to book. They do not want to be ejected and thrown out on to the street, where it is cold and dark as the seasons change against us. I hope we can understand what will happen to sitting tenants in such a case because that is extremely important. I see that the hon. Member for Scunthorpe is following with interest and is concerned about the matter. It would no doubt be heritable property 95% made with English steel from the great steelworks in his illustrious constituency.
Clause 25 deals with money received by administrators. We are told that this is a technical amendment to paragraph 6 of schedule 3 to POCA, which deals with money received by an administrator in Scotland. That is obviously a matter of great concern to my hon. Friend from the Scottish nationalist party. It is to provide a definition of “bank” following the repeal of the provisions of the Banking Act 1987, which previously provided the definition. I want to understand why it is so important to provide a definition of bank in such circumstances and why that is not already covered by legislation. That is a minor technical point. Is it truly necessary or does it make a substantive difference?
Victoria Atkins (Louth and Horncastle) (Con)
Does my hon. Friend welcome, as I do, the fact that the Government are enabling civilians to help warranted officers in such important investigations? Civilians can bring skills from the private sector of which a warranted officer might not yet have experience. It is a useful tool in the armoury of law enforcement agencies to be able to draw on the wealth of experience in the private sector, as well as relying on the significant experience of warranted officers.
Charlie Elphicke
I thank my hon. Friend for more than fully answering my question. She has saved the Minister the trouble of having to respond to my query. She makes a powerful point. It is important that we have such expertise, understanding and skills and that the forces of law and order are able to draw on civilian skills that may not exist directly under the employ of officers of the Crown. That is extremely helpful, and I thank her very much.
The Chair
Minister, having caught such a rare fish, I presume you want to deal with it now rather than later.
Mr Wallace
I am touched by the love of Scotland expressed by my hon. Friend the Member for Dover—although his constituency is closer to France than Scotland. I might be able to help him on some of his technical questions.
My hon. Friend’s first question was about why the miscellaneous provisions relate to Scotland, how they are processed and why they are different. Sections 67 and 215 of the 2002 Act provide that a magistrates court can require a bank or building society to pay a sum of up to £5,000 if it fails to comply with an order. However, there is no precedent for such a provision in Scottish law. Also, the equivalent orders in Scotland will apply to law enforcement authorities, as well as to banks and building societies. It was therefore considered more appropriate for any, hopefully rare, wilful non-compliance with an order in Scotland to be dealt with as contempt of court.
Clause 24 addresses recovery orders relating to heritable property. Although it is Scottish Ministers, as the enforcement authority, who apply for a recovery order, once granted it is for the trustee for civil recovery to recover possession of any heritable property to which the recovery order applies. That is because the effect of a recovery order is to vest the property in the trustee for civil recovery. Under existing law, however, a trustee for civil recovery is unable to seek recovery of possessions directly in the Court of Session so must raise a separate action in a lower court, namely the appropriate sheriff court. That can lead to defenders rehashing arguments that were unsuccessful before the Court of Session and incurring costs for those days, which ultimately compromises the amount recovered. Such delays also permit those involved in criminality to continue occupying a property despite the Court of Session having determined that the property was obtained through unlawful conduct and should therefore be recovered.
My hon. Friend is rightly concerned about sitting tenants whose house is owned by a crook and who suddenly find that it is forfeited or frozen. The primary policy obligation is the effective recovery of the proceeds of crime, which is generally best served by recovering the heritable property concerned and selling it so that proceeds from the sale can be added to the public purse. A primary function of the trustee for civil recovery is to realise the value of the property for the benefit of the enforcement authority, which, in Scotland, is the Scottish Ministers. It was never intended that the trustee should take on the functions of a landlord in relation to any sitting tenants.
However, we are considering introducing amendments to other legislation in consequence of the clause, as was well pointed out by my hon. Friend the Member for Dover, with a view to ensuring that any legitimate tenant receives fair notice that a recovery order is being sought in respect of the property concerned and that, if granted, they will have to vacate the property within a certain period of time, and that adequate support is put in place to safeguard against homelessness.
Let me move on to the fourth point, relating to the definition of “bank”—I remember this being a particularly gripping part of the Bill when I was reviewing the legislation. The Banking Act 1987 provided a definition of a bank; these amendments simply update the definition to ensure that it is current, as the Banking Act has been repealed.
Dr Huq
I am reassured to hear that tenants’ rights, which are often under-regulated in this country, will be dealt with in the legislation.
I have a question about clause 26, which is on accredited financial investigators. We have had those in this country since 2009. Even though I do not have the exact figures—my iPad is not getting wi-fi—there is evidence that we have not hung on to all of them. People have been trained as specialist investigators out of the public purse. We live in an age where we should justify every pound of public money, and we seem to have lost those people to the private sector. A lot of them have been poached.
Charlie Elphicke
This was exactly my concern as I studied the Bill in great detail. However, I feel that my hon. Friend the Member for Louth and Horncastle, who is extraordinarily able and learned in these matters, answered that question by saying that one should be able to draw on skills across the whole nation by contracting them in. I thought that was quite a powerful point.
Dr Huq
It was a powerful point. As I was going to say if the hon. Gentleman had allowed me to finish the sentence I had embarked on, this issue will be addressed at the end in one of our new clauses. Perhaps we could build in some way of, if not exactly giving them golden handcuffs, then retaining them or even getting the cost of the training repaid, whatever that is. We see the same happening across other sectors. We hear of junior doctors being lost to Australia. It would be a tragedy if we trained these people up and then off they went, poached by the private sector. We have heard of examples where they have gone to the gambling industry, which my hon. Friend the Member for Swansea East has experience of in her role on the all-party group on fixed odds betting terminals. I flag that issue up now, but we will come back to it later in a new clause.
Mr Wallace
I have heard the hon. Lady’s sentiment. We will discuss the new clause later. I understand the point that we invest in people and we as the taxpayer should extract that investment back. We will no doubt discuss that further.
On the final concern raised by my hon. Friend the Member for Dover about the governance of accredited financial investigators, the use of the power in the clause is covered by a code of practice that will be amended. That mirrors the application processes elsewhere in POCA whereby civilians authorise applications. I am happy to provide those codes of practice for my hon. Friend to look at.
Question put and agreed to.
Clause 22 accordingly ordered to stand part of the Bill.
Clauses 23 to 27 ordered to stand part of the Bill.
Clause 28
Confiscation orders and civil recovery: minor amendments
Amendment made: 15, in clause 28, page 78, line 33, at end insert—
‘(2A) In section 148 (free property: Scotland), in subsection (3)(b) for “or 297D” substitute “, 297D or 298(4)”.” —(Mr Wallace.)
Clause 28(2) amends section 82 of the Proceeds of Crime Act 2002, which determines what constitutes “free property” in relation to confiscation proceedings in England and Wales, by providing that property detained under section 298(4) of the 2002 Act is not free property. This amendment provides for a corresponding change to be made to section 148, which applies in the case of confiscation proceedings in Scotland.
Clause 28, as amended, ordered to stand part of the Bill.
Clause 29
Disclosure orders
Question proposed, That the clause stand part of the Bill.
Mr Wallace
We now move on to part 2 of the Bill, relating to terrorist property. In our discussions so far we have focused on clauses that are about ensuring we take the profit out of serious and organised criminality. Terrorism finance is different. Individuals who raise and move funds for the purpose of terrorism are not concerned with profit, but with causing the loss of life. It is essential that the tools available for terrorist finance investigations and the powers available to seize terrorist cash and property are as comprehensive as those available for dealing with other financial crime or, in some cases, more robust. Part 2 of the Bill is included for that purpose.
The relevant clauses therefore largely reflect the existing provisions relating to financial crime, but have been adapted as needed to respond to what is a different type of threat. As I explained earlier, disclosure orders are available for confiscations, civil recovery and exploitation proceeds investigations. Clause 29 and schedule 2, which it introduces, are very similar to clauses 7 and 8, and extend disclosure orders to money laundering investigations, but do so for terrorist finance investigations. The clause will make disclosure orders available for terrorist finance investigations, which will give law enforcement agencies the means to obtain information that is significant for investigating suspected terrorist finance offences or for identifying terrorist property.
The clause makes it possible for the police to apply to the court for an order to compel an individual to answer questions, to provide information or to produce documentation that is assessed to be relevant to progressing a terrorist finance investigation. It will be an offence to fail to comply with such an order without reasonable excuse, and to make a false or misleading statement in response to such an order. Either offence is punishable by a possible term of imprisonment of up to two years.
This is a robust measure, which is appropriate when we consider the type of threat with which we are concerned. However, it will operate with a number of safeguards: the application for an order must be made by a senior police officer, at least a superintendent, or authorised by such an officer; and the court must be satisfied that the information sought will be of substantial value, and that it is in the public interest for it to be provided, before making an order.
The action plan for money laundering and counter-terrorism finance, to which I have referred on numerous occasions, identified the need for a more robust law enforcement response to tackle money laundering and terrorist finance in all its forms. The measure is part of that response.
Dr Huq
The Minister is absolutely correct that the Government’s action plan of April 2016 identified this as a crucial area in need of examination. Terrorism is the threat of our modern age, along with climate change, so we go along with the clause.
Question put and agreed to.
Clause 29 accordingly ordered to stand part of the Bill.
Schedule 2
Disclosure orders
Mr Wallace
I beg to move amendment 16 in schedule 2, page 109, line 9, leave out “designated” and insert “counter-terrorism”.
This amendment, and amendments 18, 20, 21 to 25, 27 to 49 and 54, are consequential on amendment 26.
The Chair
With this it will be convenient to discuss Government amendments 18, 20 to 49 and 54.
Mr Wallace
We come to a large number of Government amendments, but I am pleased to inform the Committee that they are all connected to the same issue. Legislation must keep pace with changes to the police workforce. Civilian financial investigators accredited to the National Crime Agency under the Proceeds of Crime Act 2002 can already exercise many of the equivalent investigatory powers available under the legislation for a variety of investigations into money laundering and other serious crime.
Clause 34, which we will reach consideration of in due course, will allow civilian members of police staff, who will be referred to as counter-terrorism financial investigators, likewise to exercise certain investigatory powers in connection with terrorist investigations. The powers include applying to a court for a production order in relation to terrorist property, a financial information order or an account monitoring order. Clause 34 will also amend schedule 1 to the Anti-terrorism, Crime and Security Act 2001 to allow financial investigators to seize terrorist cash. Clause 32 will enable them to seize certain personal movable items.
At a time when counter-terrorism policing has been given additional investment in recognition of the threat levels facing the UK and the vital function it provides, I hope the Committee will agree that it is entirely sensible to provide greater flexibility in legislation for how the police may use their workforce. That does not mean that the exercise of those powers by a wider pool of people should be without safeguards. After further discussion with the police and the National Crime Agency, we have identified that a discrete accreditation process is appropriate for counter-terrorism financial investigators, rather than the training system for financial investigators set out in the Proceeds of Crime Act 2002.
Nic Dakin (Scunthorpe) (Lab)
The Minister is explaining the need for the amendments. Will he explain exactly what difference the proposed changes will make to the accreditation? How will it compare with what it would otherwise have been?
Mr Wallace
As I said earlier, terrorist financing often happens much more in real time. It is not about someone banking their asset to enrich themselves; it is about funding an operation. There will therefore be different requirements for these financial investigators. They will almost be chasing the money as they go, often to stop an operation that is about to happen—someone may be about to book a plane ticket and we may need that stopped—so they will need a different skill set from a normal accredited financial investigator. That is one fundamental difference; another relates to the different approaches that the Bill takes to terrorist financing and to criminal financing. There is a difference between enriching oneself and funding an act of terror.
Amendment 16 agreed to.
Mr Wallace
I beg to move amendment 17, page 114, line 30, leave out “6” and insert “12”.
This amendment increases the maximum period of imprisonment from 6 to 12 months (in line with other provisions in the Bill) in the case of an offence in Scotland of making false etc. statements in response to a disclosure order under the new provisions inserted into Schedule 5A to the Terrorism Act 2000.
The amendment will increase the maximum sentence for making false or misleading statements in response to a disclosure order to 12 months’ imprisonment, following a summary conviction in Scotland. The maximum penalty for the offence following a conviction on indictment will remain two years’ imprisonment. In our ongoing discussions with the Scottish Government, I have been advised that the summary courts in Scotland have general powers to impose sentences of up to 12 months and that this is therefore the correct approach for offences that can be tried summarily or on indictment. It will help to ensure the best use of the sheriff courts in Scotland.
Richard Arkless
That is a fair assessment of the position in Scots law. A sentence of 12 months is more consistent with the rest of the Bill and with the summary powers of sheriff courts in Scotland. Also, we have a presumption against lower sentences in Scotland and I would not like a lower sentence of less than six months to be caught by that presumption unintentionally. We support the amendment.
Mr Wallace
Collaboration between law enforcement and the private sector is incredibly important for countering terrorism, as it is for combating serious and organised crime. The importance of such close collaboration will be a key theme that features prominently in the forthcoming revised Contest counter-terrorism strategy.
Clauses 30 and 31 mirror the provisions in clauses 10 and 11, but for terrorist finance investigations.
As I have outlined to the Committee in relation to part 1 of the Bill, the Government are committed to improving public-private partnerships. We must support the regulated sector to come together to share expertise and information to help it protect legitimate businesses from being exploited for criminal or terrorist intent. In some cases, the detailed picture held by the regulated sector might be key to understanding particular threats. Closer working with the regulated sector can only enhance our understanding of terrorism and provide opportunities to protect against it or disrupt it. Clearly, the financial sector in particular can play a vital part in terrorist finance investigations and tracking terrorist property.
Clause 30, like clause 10 on money laundering, will enable firm-to-firm information sharing through a legal gateway, which will provide immunity from civil liability, encouraging the reporting sector to share information to detect and prevent money laundering and terrorist financing. The joint money laundering intelligence taskforce has demonstrated that there is potential for information sharing in relation to terrorist financing to support effective law enforcement action and disrupt threats to our national security. The clause is an important measure that enables us to take forward that agenda. Although obligations to protect customers’ personal data remain important and must be respected, where it is possible to overcome barriers to the effective sharing of information to progress an investigation, the Government will do what we can to allow it.
Clause 31 will allow the National Crime Agency or the police, following receipt of a report under section 21(2)(a) of the Terrorism Act 2000, to request further information from any member of the regulated sector, irrespective of whether that entity raised the original suspicious activity report. It will also allow the National Crime Agency to seek further information on behalf of a foreign authority. Just as in clause 11, in the event that a member of the regulated sector does not comply with a request for more information, the provision will also allow the NCA or the police to obtain a court order to ensure that it is provided.
The two clauses will allow better information flows within the regulated sector and between the regulated sector and law enforcement agencies, generating better intelligence for law enforcement agencies and helping firms better protect themselves. I commend the clauses to the Committee.
Dr Huq
Clauses 30 and 31 revisit the information sharing themes that we have been discussing all day. We thoroughly commend them. They build on another good piece of Labour legislation, the Terrorism Act 2000. Unfortunately, terrorists have become ever more ingenious in the evil schemes that they dream up in the 16 years since, which is why the clauses are necessary.
Question put and agreed to.
Clause 30 accordingly ordered to stand part of the Bill.
Clause 31
Further information notices and orders
Amendments made: 18, in clause 31, page 86, line 1, leave out “designated” and insert “counter-terrorism”.
See the explanatory statement to amendment 16.
Amendment 19, in clause 31, page 86, leave out line 3. —(Mr Wallace.)
This amendment removes a reference to the Scottish Ministers from the list of persons who may give a further information notice under new section 22B of the Terrorism Act 2000.
Question put and agreed to.
Clause 31, as amended, ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned. —(Andrew Griffiths.)
Westminster Hall
(7 years, 5 months ago)
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Soil Health
(7 years, 5 months ago)
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Mary Creagh (Wakefield) (Lab)
I beg to move,
That this House has considered the First Report of the Environmental Audit Committee, Soil Health, HC 180, and the Government response, HC 650.
May I say what a pleasure it is to be here with you today, Mr Bone, to discuss the vital issue of the nation’s soil health? I believe this is the first time that the UK Parliament has ever discussed the health of our soil, which is a vital part of the nation’s ecosystems. I warmly welcome the Minister to her post—I know we will have a good discussion today—and my hon. Friend the Member for York Central (Rachael Maskell), who is the Labour Front-Bench spokesperson on this issue. I am grateful to Mr Speaker and to the House for this first ever debate, which is on the Environmental Audit Committee’s report into soil health.
I begin by thanking my Committee colleagues for their work and all the other hon. Members across the House who have a long-standing, informed interest in protecting the environment. One of the first findings of our report is that soil is a Cinderella environmental issue. It is an earthy subject; it is not clear like water, and it receives a lot less attention than air pollution, water quality and climate change. Yet whether we realise it or not, society relies on healthy soil for the food that we eat, for flood prevention and for storing carbon. The UK’s soils are only about 10,000 years old, which is one of the fascinating facts we learnt as we went through our inquiry. Soil supports 95% of the world’s food production —the other 5% is probably fish and perhaps stuff from trees, although trees grow in soil as well—so if soils start going down, human life will follow soon after.
The Government say they want our soil to be sustainably managed by 2030, but we found no evidence that they are putting in place the policies to make that happen. Although healthy soil is a vital tool in the fight against climate change, degraded soils harm the environment and can even contribute to climate change by emitting carbon into the atmosphere, so it is vital that robust mechanisms are put in place to promote soil health and reverse soil degradation. We welcome the Government’s aspiration for UK soils to be managed sustainably, but we need ambitious targets, effective policy and strong enforcement mechanisms to make sure that happens, and we did not see that action.
Let me turn first to the vexatious issue of contaminated land. This is absolutely vital if we are to have a resource-efficient country that uses everything well. That includes brownfield land, rather than taking more land from our beloved greenbelt, which, as we all know as constituency MPs, is a deeply controversial issue.
A key area of concern was the fact that 300,000 hectares of UK soil are contaminated with toxins, including lead, nickel, tar, asbestos and radioactive substances. Those contaminated sites can be a public health risk and can even pollute our water supplies. The contamination is the result of the UK’s proud industrial heritage in areas such as mine and that of the hon. Member for Rochdale (Simon Danczuk). That is not a problem in areas with very high land values, where sites are mostly dealt with through the planning system, so that developers can see what the cost of remediating and cleaning the soil—washing it, which is what actually happens—will be, and they are happy to do that. That happened, for example, at London’s Olympic park: the soil was actually lifted up and washed before the development began. I am sure we are exporting that amazing technology all round the world.
In areas where land values are low, where the local authority owns the land or where rogue developers have failed to clean up before construction, local councils have a statutory duty under part 2A of the Environmental Protection Act 1990 to clean up contaminated land. However, the Government have withdrawn capital grant funding, which enables councils to do that.
Let me give an example from Wakefield of a housing estate in Ossett. It was built in the 1970s on the site of an old paintworks, when environmental regulations were much less stringent than they are today. In 2012, the council discovered that people’s back gardens were contaminated with asbestos, lead, arsenic and a derivative of coal tar, which can cause cancer. Cleaning up that toxic legacy would have cost residents £20,000 to £30,000 each, leaving their homes blighted and unsellable. Thankfully, Wakefield Council secured more than £300,000 from the Department for Environment, Food and Rural Affairs in contaminated land grants to clean up the toxic mess.
However, our inquiry heard that the cut to the capital grant has severely undermined local councils’ ability to tackle the problem. It means that sites such as Sand Hill Park in Gunnislake in Cornwall, Upton Court Park in Slough and McCormack Avenue in St Helens will be left untreated. Many councils simply do not have the resources to investigate contaminated sites, and we heard that councils would be reluctant to investigate a site—rightly—knowing that they could not secure funding for remediation.
There is a real danger that contaminated sites are being left unidentified, with potential harm to public health. Ministers have been clear that relying on the planning regime alone does not solve the contaminated land problem and could exacerbate regional inequalities. There is a risk of no remediation being done, and in some cases the houses were built in Victorian times, so there is no developer to pursue. The Government have not produced an impact assessment that we have seen—I am happy if the Minister wants to correct me—on the cessation of the capital grant scheme, but it is wrong to state, as Ministers have, that contamination can be addressed through the revenue support grant. Correspondence published by my Committee from December 2013 shows the then DEFRA Minister, Lord de Mauley, saying that the Government never intended the revenue support grant to take the place of capital grant funding.
The Government have cut £17 million of funding since 2009-10, leaving just half a million pounds, with the funding essentially being phased out in 2016-17. Capital support grants, not revenue support grants, have financed 80% of the cost of cleaning up contaminated sites. Fewer than 2% of cases have been remediated through other public funding, suggesting that the revenue support grant has rarely been used to meet councils’ statutory responsibilities under part 2A.
Revenue support grant—the clue is in the name, is it not? It is there to help councils with their revenue needs, not these sorts of big capital needs. Some councils facing the biggest problems with contaminated sites are coping with the most severe budget cuts. Wakefield Council is cutting £27 million of spending this year. We believe it is essential that DEFRA provides a dedicated funding stream to decontaminate sites, to use brownfield properly and to have a resource-efficient approach to the planning system. It should be set at the level of the previous scheme—around £19.5 million in today’s prices.
I was concerned to learn that since the publication of our report both DEFRA and the Department for Communities and Local Government have proposed amendments to planning regulations in the Neighbourhood Planning Bill that will curtail the right of local planning authorities to attach pre-commencement planning conditions to brownfield development approvals. The requirement for these conditions to be agreed with developers in advance or be subject to appeal will prevent local authorities from ensuring that site investigation, risk assessment and clean-up works take place before development begins. Furthermore, the CL:AIRE national quality mark scheme, which aims to speed up approval for development on brownfield sites, risks negating or potentially replacing the independent, rigorous and accountable role of the local authority’s contaminated land officer. It is wrong for DEFRA to be relying on local authorities to remediate contaminated land while cutting their funding and introducing new legislative measures that reduce their ability to act effectively.
Let me turn to soil degradation, peat lands and climate change. I was unaware before this inquiry that soil is a massive natural carbon capture and storage system. We hear a lot about CCS, but we do not actually understand that the soil around us is capturing and storing carbon all the time. It stores three times as much carbon as the atmosphere, and we want it to stay there. The UK’s arable soils have seen a widespread and ongoing decline in peat soil carbon levels since the ’70s. Soil degradation increases carbon emissions and contributes to climate change. Each tonne of carbon retained in soil helps us to meet our carbon budgets and slows climate change.
At the Paris conference on climate change last year, the Government pledged to increase soil carbon levels by 0.4% a year. That is a great pledge, and we welcome the ratification today of the climate change treaty, but the Government need a plan to put that pledge into action. I would like to hear from the Minister where that plan is. Without a national soil monitoring scheme to establish a baseline for the nation’s soil, we will not know whether the target is met. The carbon content of soil is vital for growing food—95% of food, apart from fish. Soil degradation could mean that some of our most productive agricultural land, particularly in East Anglia, becomes unprofitable to farm within a generation.
The degradation and decline of peat bogs is particularly troubling, given that peat lands store about 40% of our soil carbon. The Government need to crack down on land use practices that degrade peat, such as the burning and draining of bogs. I welcome the Government’s commitment to publish their report on the carbon and greenhouse gas balance of low-lying peat lands in England and Wales before the end of the year. That research will fill an important knowledge gap, and the Government should use the report to accelerate and improve their peat land restoration programme.
The upcoming 25-year environment plan—we are keen to hear the latest timings for that from the Minister—should set out measurable and time-bound actions that will halt, then reverse, peat land degradation while minimising the impact on farmers. DEFRA’S single departmental plan contains £100 million for the natural environment. Will the Minister tell us how much of that money will be spent on improving soil health? I am concerned that a majority of the projects are based in upland peat land areas, whereas our report highlighted that the problem is in the lowland peat areas. They are the emissions hotspots, and that is where the Government should target their efforts.
I mentioned the need for a proper soil monitoring system. Again, because soil is earthy and dark, we do not tend to see it as something that is important to us as an ecosystem. DEFRA’s ad hoc approach to soil health surveys is inadequate. We would like the Government to introduce a rolling national monitoring scheme, very similar to the one in Wales that we heard about, to ensure that we get a rich picture of our nation’s soils. Data collection is a cornerstone of effective policy, because what gets measured gets done. Without a national soil monitoring scheme, we do not know whether our soils are getting healthier or sicker. Ad hoc studies are just not enough; one survey in eight years is not enough.
A proposal to undertake a repeat of the soil sampling carried out in 2007, which would cost just £156,000 a year, has been submitted to DEFRA since the release of our report. Is the Minister aware of that and does she have any comments about that proposal? Compared with the costs of monitoring air and water quality, this is very small beer, but it is a crucial platform for knowledge building. Soils receive nowhere near equal status with water, biodiversity and air.
The Government have suggested that we could use farmers’ own soil analysis to monitor soil health. That is fine. That approach may provide useful additional data, but it is not a solution because it would be an unrepresentative sample. I know the Minister has a degree in these—
Mary Creagh
Yes, the Minister has a degree in chemistry, so she will know about the importance of representative sampling. Such an analysis would only deal with agricultural soil, but would neglect conservation land, urban and coastal land, forests and most peat lands.
Let me turn to the cross-compliance regime. The Government’s reliance on cross-compliance rules with farm payments to regulate agricultural soil health is not sufficient to meet their ambition to manage our soil sustainably by 2030. The regime is too weak. The rules are too loosely enforced and they rely only on preventing further damage to soil, rather than on promoting activity to encourage the restoration and improvement of our soils.
Crucial elements of soil health, such as soil structure and biology, are not assessed at all in the cross-compliance regime, and there is a minimal inspection regime. Two figures really illustrate the changes in the past couple of years. In 2014 there were 478 discovered breaches of the cross-compliance soil regime, but in 2015, under the new common agricultural policy rules, there were just two discovered breaches of the new conditions, both on the same farm. I am pretty certain that the only reason those breaches were discovered was because there was soil run-off, which probably went into a watercourse. It was not Government inspectors, but the Environment Agency, that saw a polluting incident in a river, allowing the breach to be discovered. In theory, an outcome-based approach is fine, but we need adequate inspection and monitoring. Rules with greater scope, force and ambition are required to meet the Government’s goal to manage soil sustainably by 2030.
I turn briefly to subsidies for maize production and anaerobic digestion. We heard that maize production, when managed incorrectly, also damages soil. This is not just a question for fans of “The Archers”, in which Adam is trying to restore the soil structure in the face of opposition from evil Rob Titchener, who is evil not just because of what he did to Helen, but because of his approach to soil monitoring and restoration. We send Adam every good wish in his low-till approach to improving the land.
Maize production can increase flood risk and contribute to soil erosion. My Committee heard evidence that up to three quarters of a field could be sealed to—or become impervious to—rainfall in maize stubble fields over the winter, which results in the soil run-off that, as I said earlier, damages rivers. There is a very simple method to avoid that, which is roughly ploughing back in the maize stubble. If the Government could think of ways to incentivise farmers to do that, we would be only too happy to hear about them. We need effective regulation of high-risk practices.
Maize produced for anaerobic digestion receives a double subsidy: first through the CAP and then from the UK’s own renewable energy incentives. That is counterproductive and has contributed to an increase in the land used for maize production. The Government’s plan to restrict the subsidy for energy generated using crop-based feedstock is a move in the right direction, but it fails to prevent maize from being grown on high-risk soils. I would be grateful if the Minister set out whether she has any specific plans on that issue.
Before I finish, Mr Bone, I would like to say a few words about the referendum result, a topic that I know is very close to your heart.
Mr Peter Bone (in the Chair)
Order. When I sit in this Chair, I have no views on anything.
Mary Creagh
Excellent; that is great. I shall carry on regardless, then.
Some 80% of our environmental regulations are shaped by Brussels, and soil is no exception. The European Environment Agency researches trends in European soil health and looks at how cross-cutting policy objectives impact on soil management. It is not glamourous work—getting our hands dirty never is—but it is important for member states, including the UK, working towards the European Union’s target to ensure that by 2020 soil erosion is reduced, soil organic matter is increased and remedial work is underway on contaminated sites. It is important that we are able to meet our 0.4% target to improve soil carbon capture, as we have agreed to do in the Paris agreement. As we leave the EU, it is vital that the Government maintain that target and ensure that UK agencies take over the European Environment Agency’s vital work in this area.
Other Members wish to speak, so I will conclude by saying that soil is crucial to life on Earth. Neglecting soil health will damage our food security, increase climate change and damage public health. DEFRA’s upcoming 25-year environment plan gives us a unique opportunity to place soil protection at the heart of our environmental policy. We must stop seeing soil just as a growth medium and treat it as a precious, fragile ecosystem in its own right—it is the Cinderella of all ecosystems.
We need a joined-up soil policy between DEFRA and the Department for Communities and Local Government in relation to planning. We are pleased that the Government have acknowledged those issues, but now we await action. We want to see specific, measurable and time-limited action to protect our soil. I commend our report to the House, and I look forward to the debate and to the Minister’s response.
Rebecca Pow (Taunton Deane) (Con)
I, too, am delighted to serve under your chairmanship, Mr Bone. I am also delighted to follow my Committee colleague, the hon. Member for Wakefield (Mary Creagh), who so ably chaired our inquiry on soil. I was one of the people who persuaded her to hold the inquiry. To many people it might seem a rather odd subject to consider, but I hope that we are demonstrating that we neglect soil at our peril. Soil may not be on your top-10 list of important issues, Mr Bone, but I hope you might change your mind after hearing what we have to say this afternoon and agree that we should all give soil a much higher profile.
The hon. Lady talked about soil and soil contamination, but I will talk about soil in the wider landscape. I hope that some of the ideas in our report will gradually filter into policy, and I am confident that the Minister is listening to some of those views. I am a gardener, I grow fruits and vegetables at home, I was brought up on a mixed farm—such farms treat soil the best—and I have reported on such subjects for many years as a journalist, so I am pleased to be involved in this debate.
Soil is the stuff of life. It is as important as the water we drink and the air we breathe—they are all inextricably linked. Without healthy soils, we cannot produce healthy, sustainable food. Soil is also an important sequester of carbon, as we have already heard, and it plays an important role in climate mitigation. Until we produced our report, many people, even on our Committee, were unaware of that. Soil stores three times as much carbon as is held in the atmosphere, with peat being especially significant. Soil has an important water-cleaning function, as it helps to filter and clean the water as it drains through. Soil also holds water and slows the flow, so it also provides flood resilience. We heard all those things in our inquiry.
I am also a member of the Select Committee on Environment, Food and Rural Affairs, which recently reported on flood resilience. Soil was highlighted in that report. Treating our soil well and increasing the amount of organic matter contained in it will help to hold water and slow the flow into our rivers, which will ultimately help the nation. Taking more care of the land around us would have a cost effect on the economy, because it would save us money if we did not have to react to massive flooding.
I said at the beginning that soil is the stuff of life. Soil is our lifeblood, and it is alive—many people think soil is inert, but it is not. There are more organisms in 1 gram of soil than there are human beings on the planet. Each gram of soil contains: 1 billion bacteria belonging to 10,000 different species; up to 100 invertebrates; and up to 1 km of fungal threads. A square metre of soil can contain between 30 and 300 earthworms.
Mary Creagh
The hon. Lady is showing what a brilliant member of the Environmental Audit Committee she has been. I slightly regret that we did not call her as a witness, instead of just as a member of the Committee, because I am learning new things, particularly about fungal threads and water filtration. This is a subject to which Parliament must return.
Rebecca Pow
I thank the hon. Lady so much for that intervention. I have talked to many organisations. I literally love soil. It is a fantastic subject in which we all need to get more involved. Darwin described earthworms as nature’s little ploughs. We would not survive without earthworms, because they create the passageways that aerate the soil and allow it to breathe and be healthy, and that allow all the other creatures to go to and fro doing their jobs.
All those creatures are working in the topsoil, directly influencing the food we grow—there is a direct link—yet we understand only 1% of those organisms, which is unbelievable. It is an untapped area. People are getting into it, but it is still so unknown. The hon. Lady mentioned fungi. Trees could not properly uptake nutrients or water without the fungi in the soil, and we would not survive without the trees because they have such an effect on the recycling of the air and all the gases, which is even more reason to look after our soil. That brings me neatly to something I must mention—ancient trees. I am chairman of the all-party parliamentary group on ancient woodland and veteran trees. Ancient woodland is our most biodiverse habitat, but only 2% remains. Ancient woodlands are like our rain forests, and they are a wonderful microcosm of biodiversity, but with the trees we have to include the soil underneath. We should treat it all as one holistic whole.
The soil and those trees should be protected as we protect our national monuments. They are that significant. I am sure that the Minister is listening, and her predecessor was terribly interested in ancient trees. All the diverse little connections are all the more reason to protect our soil.
Dr Thérèse Coffey
I reassure my hon. Friend that I am listening. She came to meet me not long ago for a full half-hour discussion on soil health.
Rebecca Pow
I am coming to that. There is a major section in my speech about our meeting, but I thank the Minister for drawing attention to it.
It is a sad scenario that brings us here today and that caused us to hold our inquiry. Soil is a finite and deteriorating resource. Soil takes a very long time to develop, as we have heard—1 cm of topsoil can take 1,000 years to form, but can be lost in a moment. Topsoil can be washed away into our waterways if the incorrect crops are grown and it is left open to water, and the carbon in the soil can evaporate into the atmosphere.
According to a UK Government report, the UK is losing 2.2 million tonnes of crucial topsoil each year, which costs the economy some £1.2 billion. That is why we must seriously consider the issue. As we have heard, some calculations say that we have only 100 harvests left in certain arable areas of the south-east of England before we cannot grow anything in the soil. We have to do something to reverse that decline.
I do not want to be completely negative. I applaud the Government in some respects, and I particularly welcome their progress on preventing the degradation of the peatlands—we have already heard about that, so I will not talk about it in great detail. I also applaud the Government on their ambition to manage soil sustainably by 2030. That was highlighted in the 2011 natural environment White Paper, but I urge the Minister to speed up the process. The situation is so serious that we need to address it now, rather than thinking, “2030 is a long time way. Let’s not worry about it now.”
As we have heard, the Government signed an agreement at COP 21 to increase soil carbon by 0.4% a year. I am pleased that that is on the agenda, which I applaud. That is great, but please can we hear from the Minister about how we are pushing it forward? It is serious.
It is not all about carbon and climate change; it is really about changing how we think about soil, which is partly what this debate is about. This is the first ever UK debate on soil, and I hope that it will influence how we think about it. Let us start by treating soil as an ecosystem, not as a medium for growing stuff, because we have used and abused it—not everyone has, but it has often been treated that way—and the ethos of EU policies has been about preventing damage rather than restoring and improving the soil. Brexit provides us with an excellent opportunity to change how we approach the issue and think about how to encourage those who work the land to help restore and improve it. The Soil Association calls for organic matter to be increased on arable land by 20% in 20 years. That is quite a challenge, but we should perhaps consider it.
I come now to the issue of monitoring schemes. One of our report’s main findings was that we needed a decent monitoring scheme. After all, if we do not know what is in the soil, how can we tell people what they ought to do about it? Lord Krebs led the way on climate change by means of a proper monitoring scheme, which is what triggered all the work that we have been able to do on climate change. I was delighted to discuss a soil monitoring scheme with our previous Environment Minister, who was keen on trying to get the idea into the 25-year plan. Again, I applaud the Department for Environment, Food and Rural Affairs for doing so.
I am also delighted that our new Minister, my hon. Friend the Member for Suffolk Coastal, who has taken over the mantle, has shown so much interest in the subject that she has already met me for half an hour to discuss it, bringing with her lots more of the brains on her team. I was pleased—it was early in her tenure as the new Environment Minister—and I am absolutely sure that she was listening. I would like to hear a little about where those ideas might have gone.
I remind everybody that a royal commission on environmental pollution 20 years ago recommended a monitoring scheme, so we have not come very far since then. In fairness, there is an EU soil monitoring programme, but it is done only once every eight or 10 years, and it is quite cursory. A lot of farmers will tell you that they monitor the soil, but they are monitoring mainly the chemicals in the soil—NPK, or nitrogen, phosphorus and potassium—and that needs to be broadened.
We have so much environmental expertise in this country, as we heard at our inquiry. We have got the brains, and much of the work is already being done. The Centre for Ecology and Hydrology has a scheme that it reckons it could roll out tomorrow, with not too much funding, so that we could monitor our soil as an ecosystem and look not only at the chemical content but the organic and carbon content, and all the organisms—thrips, nematodes, earthworms and all the things that I learned about at university years and years ago—that are mentioned much less than they ought to be. We could make a difference quickly.
I do not think that there should be a blame game against farmers. Many of the ways that farmers have been forced to farm have been directed by our policies of low-cost food. That is why many farmers have gone down the route of monoculture and least-cost production, and our European Community policies have encouraged that. In fairness, lots of farmers are already doing exceptionally good work.
One farmer in my constituency, Tom Morris, is a great friend. He is an organic dairy farmer who has always farmed for the soil. At the Dairy UK breakfast this week, I met a fascinating chap called Lyndon Edwards, who is also an organic farmer, from Severndale farm in Chepstow. He goes around giving workshops showcasing his good practice to other farmers, and has just been to my constituency. We should encourage a lot more of that; I think that people would be receptive to it. One suggestion is that perhaps the Agriculture and Horticulture Development Board, the levy board, might be able to put some emphasis on research into soil analysis, to help build up our picture.
More green cover and grass—I am a great advocate of grass—in growing rotations, more deep-rooted crops and many other simple things can be done to address the situation. We should be getting on with it. I reiterate the calls for more joined-up thinking across Departments, particularly between DEFRA and the Department for Business, Energy and Industrial Strategy, so that when we form our policies on crops grown for energy production, we choose crops that will not destroy the environment. Maize needs serious consideration. I am sure that the Minister is listening.
There is a massive link with well-being and the health of our soil, which links the issue to the Department of Health as well. It is important to have healthy soil and a healthy ecosystem, which basically means a healthy us. That is a no-brainer. I am heartened by the groundswell of interest in the issue. It is not just our Committee here in London; I meet many people who talk about soil, including farmers. I held an environment forum in Taunton last week on flood resilience, but the subject of soil and how better to look after it to control flooding kept coming up.
Soil should not be a Cinderella story. I will end with a final thought that might concentrate our minds. Research in the US has just discovered the first potential in 10 years for a new antibiotic. Guess where? In the soil. That should give us all plenty of food for thought. I know that the Minister, with her scientific mind, will realise how important it is. We neglect soil at our peril.
Simon Danczuk (Rochdale) (Ind)
It is a pleasure to serve under your chairmanship, Mr Bone. It is also a delight to follow the hon. Member for Taunton Deane (Rebecca Pow), who made an excellent speech. She certainly educated me on a range of issues. I welcome the Environmental Audit Committee’s recent report on soil health across the UK, and I commend the work by my hon. Friend the Member for Wakefield (Mary Creagh), who secured this important debate.
DEFRA funding for contaminated land has been vital for towns such as Rochdale. The removal of such funding seriously impairs my local council’s ability to tackle this environmental problem. My community’s rich industrial history has had a lasting legacy, not all of which has been positive. The former Turner Brothers Asbestos site in Spodden valley spans 30 hectares. It was the world’s largest asbestos textile factory until it ceased production in the 1990s. Asbestos scourged the lives of many of the men and women who worked in the textile factory. My predecessor, Cyril Smith, who owned shares in the business, did much to protect and promote the industry even when he would have known that it was killing his constituents.
Today, Spodden valley lies barren, depriving the people of Rochdale space for recreation, services or even homes. My ideal is for the site to become an urban park, a green lung in memory of all those killed by asbestos. Whether that is possible, I am unsure; what I do know is that the site is a ticking time bomb. There are strong suggestions that asbestos was tipped on the site and still sits there in the soil. We know for a fact that many of the derelict buildings on the site contain asbestos.
Therefore, for the people of Rochdale, it is imperative that the Government take soil protection seriously and commit to properly funding the investigation and clean-up of contaminated land. The Environment Agency, the Health and Safety Executive and Public Health England also need to do more, particularly in relation to Spodden valley. Such challenges are too great for local authorities to face on their own.
In the past, Rochdale has benefited enormously from the contaminated land capital grants scheme for carrying out work required by the part 2A regime of the Environmental Protection Act 1990, which my hon. Friend the Member for Wakefield mentioned. Among other sites, four former landfills in Rochdale were inspected using such funding, resulting in three determinations of contaminated land and remediation. Once again, Government funding was vital.
Now Rochdale relies on site owners to undertake voluntary inspections. We are fortunate in the case of Spodden valley that the intrusive site work inspection is being undertaken by the site owners themselves. However, we fear that that may not be the case for future sites in Rochdale, which could be left blighted for the foreseeable future as potential developers see investment as unviable.
The council’s estimated costs for the work on the former Turner Brothers Asbestos site are astronomical. Because of the size, history and potential complexity of the site, further investigations are needed to fill the information gaps. The council will continue to work hard to support the site owner, but we know that it simply could not afford to undertake such a monumental task all by itself. Rochdale Council, like many other local authorities throughout the country, believes that councils will struggle to meet their statutory obligations for contaminated land now that funding under part 2A of the Environmental Protection Act 1990 is being phased out. Councils are rightly expected to uphold good environmental standards but will no longer be given adequate financial support by central Government. Such requirements will become burdensome. Intrusive site investigations and comprehensive risk assessments—not to mention clean-up charges—are incredibly costly.
In this matter, as in so many things, the Government are shirking their responsibilities and punishing local authorities by demanding that they do more and more with less and less every year. In Rochdale, an area with high levels of deprivation, cuts to local government have hit hard. Services that local people depend on have been cut to the bone. The local authority simply does not have spare cash lying around. We need central Government support. Throughout the 20th century, factories in Rochdale and throughout the north-west pumped money into the Exchequer, as did their employees. Now that those industries have gone, the Government appear to be turning a blind eye to their environmental legacy and to families who live with threats from land, such as at Spodden valley.
Local authorities are having an incredibly tough time. With their shrinking budgets, it is simply impossible to expect them to pick up the extortionate bill for investigating and cleaning up contaminated land. I therefore urge the Minister to take seriously the recommendations made in the Environmental Audit Committee report.
Kerry McCarthy (Bristol East) (Lab)
As ever, Mr Bone, it is a pleasure to see you in the Chair. I am pleased that today we have the opportunity to discuss the importance of soil health, which is something of a Cinderella issue in environmental policy, as other hon. Members have said: it has been neglected for too long. I hope that the Environmental Audit Committee’s report and today’s debate will help to lift it from obscurity and give it the attention it deserves.
Some of our most productive agricultural land could become unprofitable within a generation because of soil erosion and loss of organic carbon. Soil degradation in England and Wales costs an estimated £1.2 billion per year in lost productivity, flood damage, reduced water quality and other costs. Our approach to managing our soil has to change to address those risks and as part of our strategy for tackling climate change and flooding. Any Members who visited flood-hit areas in the north of the country over Christmas will have heard from people there about the impact of soil erosion on flooding—I am sure my hon. Friend the Member for York Central (Rachael Maskell) will have something to say on that point. It is one important reason why we need to address the quality of soil and to protect our soil.
I commend the Environmental Audit Committee for its excellent report. The passion with which two of its members—my hon. Friend the Member for Wakefield (Mary Creagh) and the hon. Member for Taunton Deane (Rebecca Pow)—have spoken today speaks volumes about how seriously they take the issue. I am now a member of the Committee; I am sorry that I was not a member when it conducted the inquiry. It is niche, perhaps, but it does really important work on fascinating topics. As a former chair of the all-party group on agroecology and a current vice-chair of the all-party group on agriculture and food for development, I am particularly interested in this topic. I commend the agroecology group’s soil inquiry, which slightly preceded the work of the Environmental Audit Committee and which came to very similar conclusions.
It has to be said that the Government’s response to the Committee’s recommendations has been pretty weak. As well as taking them to task for that today, I know Members of both Houses will be keen to keep up the pressure on the Government after the debate. I will focus my comments on three areas: how we can better protect our best agricultural soils through the planning system and planning policy; contaminated land, which other Members have already addressed; and the need for a proper plan of action to meet the Government’s laudable aim of ensuring that all soils are sustainably managed by 2030.
First, on planning, there has been a steady loss of our most fertile soils to development. The issue first came to my attention with the proposals to build a bus-only junction on prime agricultural land in and on the edges of my constituency. The site, known as the Blue Finger, consists of highly fertile food-growing soil, which is predominantly grade 1, although some peripheral areas are grade 2 and 3. Those three grades are collectively known as best and most versatile—BMV—soil. At the moment, the site is home to exemplary community food-growing projects, such as “Feed Bristol”, and to allotments. Unfortunately, the construction work is now going ahead, but I campaigned against it with my community because my view is that BMV land ought to be used for growing food, not concreted over.
The protection given to BMV land has been slowly weakened, most recently as a result of changes to the national planning policy framework in March 2012. Although planning practice guidance supports space for growing food, the national planning policy framework does not specifically include local food growing, which tends to mean that local plans do not include it either. When I raised that issue in a Westminster Hall debate that I secured in March last year, the then Under-Secretary of State for Communities and Local Government, the hon. Member for Portsmouth North (Penny Mordaunt), assured me that she would look at changes to planning regulations to see how we could better protect high-quality food-growing land. I understand that the NPPF is likely to be amended in the next few months; I would be grateful if the Minister spoke to her colleagues in the Department for Communities and Local Government and tried to persuade them of the need to include protection of our best soil in planning policy. It is too often overlooked.
Secondly, on contaminated land, I congratulate my hon. Friend the Member for Rochdale (Simon Danczuk) on highlighting how important the issue is to his constituency. I was genuinely disappointed that the Government’s response to the Committee did not even acknowledge, let alone accept responsibility for, the compelling evidence about the impact of withdrawing the capital grant scheme for carrying out remediation work to contaminated land. That means that local authorities will be less likely to identify contaminated sites so they are not burdened with the costs of remediation, especially since, as the report strongly makes clear, 81% of part 2A remediation has depended on funding from the capital grant scheme, and less than 2% is remediated through other public funding. It is simply not credible for the Government to claim that support for part 2A work
“remains in the form of the Revenue Support Grant”,
when in reality that grant has rarely been made available for such work.
I received a similar response from the Government to my written question about the management of more than 1,000 old landfill sites on the coasts of England and Wales. According to recent research commissioned by the Environment Agency, those sites are at increasing risk of being breached by coastal erosion, which could result in toxic pollutants leaching into the local environment and bathing water. The response of the Department for Environment, Food and Rural Affairs was that that
“is a matter for local authorities”.
It is true that the statutory duty to remediate contaminated land lies with local authorities, but DEFRA’s failure to acknowledge councils’ reliance on that funding for that work is far too complacent, especially for poorer areas where contamination is less likely to be remediated through the planning system. I would like to hear the Minister’s thoughts on the safety of those sites and whether she is reassured that everything is being done to minimise the risk to the environment and public health in the future.
Thirdly, I would like to focus on the report’s recommendation that the Government set out their plan of action for increasing soil carbon levels. In their response to the Committee, the Government detailed existing guidance and good practice for protecting peatlands, but the damaging practice of burning on upland peat persists. The Committee on Climate Change found that
“the majority of upland areas with carbon-rich peat soils…are in poor condition”
and that 27% of upland peats are regularly burned.
In the Westminster Hall debate on driven grouse shooting a couple of weeks ago, I raised the fact that grouse moors are the only places in England with Natural England’s permission to burn blanket bog on special areas of conservation, even though they receive EU environmental stewardship money for restoring those important sites. Sadly, in responding to that debate, the Minister did not provide much reassurance, other than to unnecessarily clarify that the payments are not paid to support shooting activities, which was not the point I was making, and to say that the Government
“will continue to work with moor owners and stakeholders to further improve management practices and peat condition.”—[Official Report, 31 October 2016; Vol. 616, c. 276WH.]
I hope that we see much tougher action by the Government to tackle land use practices that degrade peat.
The Government’s response was also notably weak on action to address loss of carbon from lowland, drained peat, which, as the Soil Association says, is equivalent to the emissions from all buses in the UK. I hope the Minister will reassure us that she considers lowland peat used for agriculture to be as much of a priority as upland peat. Will she ensure that measures to drastically reduce greenhouse gas emissions targeted at lowland peat areas will be included in the 25-year plans?
After visiting Avalon marshes in Somerset fairly recently, I tabled some written questions to the Department about peat works in the UK and their licences. My first question was to ask
“how many peat works the Government has bought out in each of the last five years; and how much the Government spent on buying out peat works in each of the last five years.”
The Minister’s response was that one licence had been bought out, which rather surprised me because, when he gave evidence to the Select Committee, the former Environment Minister, the hon. Member for Penrith and The Border (Rory Stewart), said:
“We have spent considerable sums of money buying out peat works”,
which I thought implied that there might have been more than one.
As understand it, there are currently 29 valid peat extraction licences, all of which expire by 2042, which clearly is some way off in the distance. Are there any plans to try to buy out any more of the licences so that we can protect the peatland in the intervening years?
Rebecca Pow
I wanted to ask not about licensing but about the Avalon marshes. They are managed by the Somerset Wildlife Trust, which does some excellent work on peatland restoration. Will the hon. Lady comment on how valuable that is and how we ought to showcase more of it? As a vice-president of the Somerset Wildlife Trust, I really feel it deserves some credit.
Kerry McCarthy
I am happy to join the hon. Lady in congratulating the trust on that work. I visited the marshes with the Heritage Lottery Fund, which is working to discover what has been preserved by the peat going back many centuries. That aspect of my trip was fascinating, as was looking at the biodiversity associated with peatland. As I was travelling there, I spotted peat works in the area, which led me to ask how much peat is still being commercially extracted and whether, given the wonderful restoration work that is being done in the Avalon marshes, we should be trying to protect some more of it and buying up some of the licences.
Rebecca Pow
On that point, I know that those in the horticultural industry are working closely together and that the use of peat—that was the main user—has declined dramatically. It is an important issue, but it is very much being tackled by the horticultural industry from that end as well, which I applaud.
Kerry McCarthy
I agree. Action is being taken, but although I could not get a firm answer from the Department, which said that data on peat extraction licences are not held centrally, Natural England estimates that there are currently 29 valid peat extraction licences. Five of those licences will expire before 2020; six more will expire by 2030; another four will expire by 2040; and the remaining 14 will expire in 2042. That is quite a lot of peat extraction between now and 2040. I obviously do not have the data on what areas of land are covered; it is all a little vague, which is why I would like the Minister to look into it. The way to tackle the issue is to try to buy out the licences so that the commercial activities do not go ahead. It should be on the record that I would like to see that done.
On the broader issue of carbon in the soil, there is already evidence out there. As Peter Melchett from the Soil Association said to the Select Committee:
“how you get carbon back into the soil is fairly settled science”.
We need a commitment that shows that the Government have fully embraced the need to act on that science. It is welcome that at an event last month the Secretary of State spoke of her own personal commitment to implementing the global “4 per 1000” soil carbon initiative. It is also welcome that the Government have confirmed that measures to increase soil organic matter will be reflected in the 25-year environment plan, but I hope there will be more than just a token reference to soil, and that the plan will set out the
“specific, measureable and time-limited actions”
to increase soil carbon levels by 0.4% per year that the Select Committee recommended.
The protection of agricultural soils should also, of course, be in the other 25-year plan—the food and farming plan. In fact, this illustrates the absurdity of the Government’s decision to have two completely separate plans. It is not possible to separate farming from the natural environment on which it depends and the rural communities that sustain it. It is unwise to look at food and farming purely from an economic, money-making viewpoint and nothing more, particularly if the focus in the food and farming plan on growing more, buying more and selling more British food ends up promoting further intensification, which would lead to more pressure on soils, not to mention more pressure on water and biodiversity, and increased greenhouse gas emissions. We will all end up paying the costs. The Minister will probably say that efforts are being made to cross-reference the two 25-year plans, but I stick by my original views that the issues ought to be incorporated into one report.
The Committee on Climate Change has said that, for the UK to meet the targets in the Climate Change Act 2008, a 15% reduction in agricultural emissions is needed by 2032. That will be achieved in part by action to prevent the degradation of our carbon-rich soils, about which we have already heard from other Members. Will the Minister say whether emissions from agriculture will be included in the Government’s emissions reduction plans? Will the food and farming plan set out how agriculture will deliver its sectoral share of responsibility for reducing carbon emissions?
Other Members have touched on reform to the common agricultural policy. I hope we will also hear today about the Government’s priorities for our agricultural policy framework once we leave the EU, to ensure that in future farm payments are better invested in public goods, from soil health to wildlife and water quality. In drawing up their plans, I hope the Government look to some of the great examples of best practice and forward thinking by UK farmers and growers on restoring our soils, including agroecological approaches.
As we have heard from my hon. Friend the Member for Wakefield, there is currently quite a debate going on in “The Archers”. People will know of Adam’s struggles in trying to improve the long-term fertility of his soil, with his plans looking increasingly likely to be overturned by his land managers, on the advice of the evil Rob Titchener, who has been mentioned already. The previous Environment Minister, the hon. Member for Penrith and The Border, told the Select Committee that the primary incentive for farmers to protect their soils is that it is good for their farm business, as healthy soils are the bedrock of future production—indeed, we heard from the hon. Member for Taunton Deane that we will reach a point where there will be no more harvests, at least in some parts of the country, if we do not protect soil.
As the report says, the benefits of soil health are not always felt by those maintaining it, and the costs of soil degradation are mostly borne by others, from water companies to those living downstream at greater risk of flooding. Adam’s new farming methods are making Borchester Land uneasy. It has been too easy for Rob to paint Adam’s methods as a bit faddish, hippy-ish and self-indulgent, as opposed to his facing the hard-headed economic realities of farming. I hope that, as well as in the other 25-year plan, the Government really seize the chance in the food and farming plan and say that it is not unfriendly towards business to look at agroecological approaches. We need to be protecting soil as one of our most precious resources. It is that that will protect the future productivity of farming, as well as protecting our countryside.
Mr Peter Bone (in the Chair)
Before I call Mike Weir to speak for the Scottish National party, I am not sure: are we sub judice on some of the events in Borchester, or has that case passed?
Kerry McCarthy
I think Helen was acquitted at the trial, so his evilness is in no doubt and we can put it on the record.
Mike Weir (Angus) (SNP)
I am very happy to appear under your chairmanship this afternoon, Mr Bone, and to learn so much about what is happening in “The Archers”.
I should perhaps start by declaring an interest, because, like the hon. Member for Taunton Deane (Rebecca Pow), I am a keen gardener. I am an organic gardener and from that I understand the necessity for healthy soil; it is only with a healthy soil that it is possible to have healthy plants, particularly fruit and vegetables. However, healthy soil is not only the growing medium, as she rightly said, but extends the biodiversity and the species in a garden. I have many species of birds in my garden. In fact, at times I think that the entire species of Spuggies and Brechin lives in my garden, because there are so many of them there; for the non-Scots, that is house sparrows.
It is important that we get this right, because if we do not have healthy soil there will be an impact on food production and on species. Later, I will say something about the carbon in the soil.
In introducing the very good report by the Select Committee, the hon. Member for Wakefield (Mary Creagh) made the valuable point that the report is not just about soil as such, as a growing medium, but about soil that has been contaminated as a result of things that have happened in the past, which was a point made very powerfully by the hon. Member for Rochdale (Simon Danczuk) in referring to the Turner Brothers factory. However, it is not just in post-industrial landscapes that such contamination is a problem. Even in my area, there are old buildings that have had industrial or farming uses and that are full of asbestos and various other contaminants.
There are also problems with former Ministry of Defence facilities, because in many periods, specifically in the immediate post-war period, old aircraft were dismantled and waste was put into pits and similar things. For example, Dalgety Bay in Fife has had an ongoing and serious problem with radioactivity from some of the machinery that was dumped just off the coast. Also, much machinery was buried on old military bases throughout the country.
One of the problems is a lack of record-keeping. It is sometimes very difficult to know what contaminants are actually on these sites, which makes it extremely difficult to clean them up for agricultural or development purposes. There is no easy answer to that problem, and I appreciate that it is not the current Government’s fault that in the 1940s and early 1950s records were not necessarily kept, or that records from that time have since been lost. Also, sometimes the difficulties in this regard were not fully appreciated. Nevertheless, we have to deal with that situation now, because soil is so important; indeed, it is increasingly important to us.
The hon. Member for Taunton Deane made a very powerful speech about the necessity for good soil. I specifically liked one point she made, namely, that soil is not an innate substance. I do not know if she has read the excellent book, “The Running Hare: The secret life of farmland”, which I understand recently topped the bestselling list. It is a fascinating book about someone who is trying to regenerate a piece of farmland—a couple of acres—with natural resources, in order to bring back hares, which have disappeared from many parts of modern farmland.
One of the things that the author does first is to dig a square metre in a field to discover how many earthworms are within it and to compare the number with that of neighbouring farmland. Of course, because the land has been chemically farmed, there are very few earthworms. One of the things that happens in the book is that earthworms come back. In turn, that leads to hares coming back; without giving away too much of the plot, they do come back. However, other animals are also brought in, including smaller animals and birds, and birds of prey, and the farmland is regenerated as a result. Throughout the book, the author compares his farmland to the neighbouring farmland, which he refers to, perhaps unkindly, as the land of “the Chemical Brothers”, who are not doing what he does. The book is interesting in showing how relatively simple changes can bring about a substantial difference to farmland.
Rebecca Pow
I am so pleased that the hon. Gentleman is highlighting this point. I have not read that book, but I know about it and will now read it. It makes the case for the call for the monitoring scheme to include much more than just chemicals; we should even count the earthworms in a quadrat of soil. He is making a very powerful point.
Mary Creagh
I wanted to ask the hon. Gentleman about hares, which are one of our most iconic native species. I have just seen that there is a close season on hunting hares in Scotland, but I am not aware that we have a close season for hares in England and Wales. That is problematic, because we had a target to restore the hare population to 1990 levels, and that target has consistently been missed. So will he join me in calling on the Minister to consider the need for a close season on hares in England and Wales?
Mike Weir
The hon. Lady has made her point. I think the Minister might object to a Scottish MP calling for a close season on hares in England when we have one in Scotland already. Nevertheless, I am sure the Minister has heard her point.
Much of this issue in Scotland is a devolved matter, but, as has been mentioned, the UK Government have signed up to a scheme, COP 21, to increase soil carbon levels by 0.4% per year. Obviously, there will have to be work with the devolved Administrations to achieve that, since all of them have their own separate schemes.
In Scotland, we recognise that soil is a valuable but vulnerable national asset that requires sustainable and effective management. Although we have talked a lot today about farming, this issues goes much further. In Scotland, as well as farming and food production we have forestry and tourism, which are important and rely on a good natural environment, including a good soil structure. So, throughout the economy, soil is important and we should not just look at it as a purely farming matter; we must expand the areas that we are considering.
I think that it was the hon. Member for Bristol East (Kerry McCarthy) who mentioned flooding, saying how soil management also plays an important role in sustainable flood management. Within the common agricultural policy schemes that are currently operating, at least in Scotland, there is an attempt to persuade farmers to take flooding into account in their farming methods, particularly by leaving flood plains in the areas immediately next to rivers and by not building on those flood plains. Often, when flood plains are built on, there is a problem as floodwater is pushed further down the river. In my area, we have probably expended millions of pounds on flood defences to deal with that problem, because when there are changes in farming practices, sometimes the floodwater is pushed further down the river, causing problems that then have to be dealt with by other methods.
Mention was also made of peatlands. Peatlands constitute a third of Scotland’s soil and they provide many economic, environmental and cultural ecosystems, as well as being important habitats for our wildlife. As far as carbon is concerned, it has been estimated that in Scotland’s peatlands the soil contains 3,000 megatonnes of carbon, which is equivalent to nearly 200 times the net annual greenhouse gas emissions. That shows the importance of soil for climate change and, in particular, the importance of peatlands.
The Scottish Government are seeking to maintain soil carbon in place, but we have to bear it in mind that there is always a conflict about some of these things. For example, renewable energy infrastructure—wind farms, for instance—is often built in areas that are less accessible, and often that is peatland or similar land. There is an offset if we have these renewable energies and clearly we are saving carbon, but at the same time there is a cost to them and we should not lose sight of that cost. The Committee’s report says:
“Current policy aims to minimise losses while facilitating development which delivers economic growth that does not entail disproportionate carbon costs.”
I reiterate that there is a cost and we must find ways of offsetting it.
Also, earlier I made the point about species. One of the things that is being done to support peatland restoration is to provide funding through the rural priorities scheme of the Scottish Rural Development Programme. Some landowners, such as the Royal Society for the Protection of Birds, have carried out restoration on their land, which, in the case of the RSPB, is mostly to do with wildlife but none the less has an important effect on greenhouse gas emissions and on ensuring that carbon is maintained in the soil. Restoration also has side effects. For example, it leads to other species growing. In many cases there is a regrowth of sphagnum moss and the resumption of carbon sequestration.
To sum up, this issue is not just about farming; there is an economic impact on all our rural areas. One thing that worries me—I am sure the Minister will not say too much about it—is farming payments. In Scotland at least, we have been trying to push much of the farming subsidy towards more environmental means to try to ensure the future. If it should come to pass that we leave the European Union, there will have to be a major realignment of farming payments. I urge the Minister and the devolved Administrations to look at the environmental benefits and how they will be maintained in a post-EU world, should that unfortunate calamity come to pass.
Rachael Maskell (York Central) (Lab/Co-op)
It is good to see you in the Chair this afternoon, Mr Bone. I start by thanking the Environmental Audit Committee for the rigour with which it has conducted its inquiry. It has produced an excellent, evidence-based report. The Government should take heed of its warnings and embrace its solutions. The qualities and properties of our soils are so finely balanced, as we have heard this afternoon. Our understanding of that has led in the past to the degradation of soil and peat bog erosion in the lowlands and the highlands, and it has had a wider impact on biodiversity, natural habitats, and flooding and water management. It now presents issues around public health, climate change and food security. The call for an effective plan with clear targets, which my hon. Friend the Member for Wakefield (Mary Creagh) made at the last Environment, Food and Rural Affairs questions and again in her speech today, is the issue of today’s debate.
Before I move on, I must mention the fascinating speech of the hon. Member for Taunton Deane (Rebecca Pow). It reminded me of David Bellamy in my youth talking about soil, and the interest he created in me. She was right, as were other speakers, to talk about the enthusiasm with which farmers talk about this agenda. They are changing their practices to see better quality soil.
The Paris agreement has set the pace for the world on how we need to address the matter. The cap on temperature rises—it is frightening to see a 1.5 °C rise in global temperatures—will determine how we farm our land. With a 1 °C rise in temperature, we could see a 30% loss in peat. Without action, we could see half of our peat depleted. Likewise, we are losing 2.2 million tonnes of soil each year in the UK, but it takes 100 years to grow back just 1 cm of top soil. Action is needed now to ensure that we have sustainable soils by 2030. I have heard that with current farming techniques, much of our land has only 30 harvests left due to the depletion in soil quality. That puts our food security back under the spotlight. We have not seen the action that we would expect since the signing by Sir David King at COP 21 of the agreement to move forward on this issue. We have had a wasted year.
I have read the Government’s response to the Environmental Audit Committee’s work, and it is worrying. There is too much dependency on voluntary codes that are not delivering the required change for carbon sequestration back into our soils, particularly in the lowland peatlands. We are told that the answers will be found in plans yet to see the light of day. My concern is that we need a framework now. That will ensure that we restore soil health in a comprehensive, managed way. How will the Government monitor soils comprehensively? What will the drivers be to re-carbonise soils? What year-on-year targets will the Government set to ensure that they fulfil their obligations? Even the Committee on Climate Change is worried about the Government’s dependency on a narrow agenda to reach anywhere near what is needed.
Members have mentioned many good examples of farming practices, including changing crop mixes, planting grasses, using green manures, investing in agro-forestation schemes, moving to organic farming and using winter cover crops to secure the soil. There have been good examples of re-wetting peatland in the lowlands. That is so important in the fens, where peats are rapidly drying. We have to look at the agenda, but we also have to question why any form of burning or draining soils continues. We heard about that in the grouse moor shooting debate a couple of weeks back. Surely it is time for action to be taken.
We also need a proper analysis of the state of our soil. We have heard how Wales has put a progressive, systematic process in place. The Committee’s report has drawn that out as best practice. We would be wise to follow the actions of Labour’s initiative, which uses a tiny proportion of rural payments to undertake the work.
I was struck by what Professor Chris Collins said in the report. He talked about the need to define what we mean by “soil health”. He said:
“There needs to be clear policy direction, evidence based, that defines what soil health is, and critically the measure to be used to evaluate it.”
It is so important that we put those things in place.
The report also draws out the need to link monitoring to other important biodiversity measures, such as fauna, micro-diversity and soil structure. While ad hoc data gathering from farmers’ soil testing regimes could add to data, its methodology is not scientific enough to provide the necessary data, so I hope the Government will look again at that. Accurate auditing leads to effective mitigation planning and interventions. That leads me to ask the Minister, how will her Government implement a programme to see a 0.4% annual increase in soil carbon levels? How will she help farmers to achieve that? How will she assist some farmers to go even further? What interventions will the Government make to ensure that that happens? Specific timelines are needed now, not just warm words.
When will we be able to see the UK peatland strategy? I know that we have seen delay with the 25-year plans that my hon. Friend the Member for Bristol East (Kerry McCarthy) says should be co-joined. When will the strategy come to light? What measures will be in the peatland plan in particular to ensure that lowland peat is restored and is performing its vital role in carbon retention?
The report was published before the referendum, so I want to ask the Minister about the steps the Government will take on leaving the EU to assist farmers in making the transition to improved soil management, perhaps by converting to organic farming. Will they have access to the five-year conversion and maintenance payments, in the light of the fact that we could have left the EU by 2019? If there is no certainty over the next couple of years, the Government are unlikely to see many applications for transition. What future support will they provide for those in transition now? What sticks and carrots will they make available to make the necessary changes in the future? Answers are needed, because farmers are making choices for their futures now.
The three good statutory management requirements used for cross-compliance have failed to provide the necessary incentive to drive soil quality improvement. It is clear that the scheme has failed to properly audit farms, and there are loopholes in the system. What will the Minister’s priorities be in replacing that part of the rural development programme? As we have heard, we also need to examine the impact of anaerobic digestion. I will not go further into that debate due to the time, but I want to mention the issue of offsetting floods. Soil has so many important qualities in achieving that, so it is important that we also examine it as part of flood management.
I also want to touch on the issue of contaminated land, not least because my constituency was drawn out in the plan and because the funding is inadequate in the light of the contaminated land capital grants being removed. There are a number of contaminated sites in my constituency. They are some of the biggest development sites in the whole of Europe. We heard from the hon. Member for Rochdale (Simon Danczuk) how important that is, and I was enlightened by what the hon. Member for Angus (Mike Weir) said about Ministry of Defence sites, particularly as my local barracks has also been listed for closure and may not be suitable for development. It is so important that we support local authorities in their objectives to ensure that they deal with contamination, and put the proper funding in place.
I have asked a number of questions today but we know how important soil is and how important it is to put funding behind that. Most important of all, we are living through an environmental crisis. Soil is a precious element and therefore it is incumbent on Parliament to make sure that we get the right soil health strategy in place now.
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Dr Thérèse Coffey)
It is a pleasure to serve under your chairmanship for this debate, Mr Bone, and I congratulate the hon. Member for Wakefield (Mary Creagh), the chair of the Environmental Audit Committee, on securing this debate through the Liaison Committee. We have heard some eloquent and passionate speeches, some particularly well informed, such as that from my hon. Friend the Member for Taunton Deane (Rebecca Pow). I hope that I will be able to cover most of the questions, if not all of them, during my contribution.
Soil is a finite resource and it must be protected. The Government recognise that good soil health is essential, not least for the range of benefits it provides, including food production, biodiversity, carbon storage and flood protection. The benefits derived from healthy soil are many and they have a very important role to play. It is for those reasons that the protection and sustainable management of our soils is integral to our thinking in the 25-year environment plan and the 25-year food, farming and fisheries plan.
We have already begun to engage with key soil experts to develop best practice for managing and monitoring our soils, and that will increase as part of our engagement for the 25-year environment plan. We hope to publish the framework for that before the end of this year, and the full plan in 2017.
A hare has been set running, and I am pleased to say to the hon. Member for Wakefield that, according to Professor McDonald’s report, the hare population is recovering in England. It is admittedly not at historic levels, but the recovery is nevertheless under way. One of the reasons for not having a close season in England is that breeding happens throughout the year and is highly variable across the country. In the east of England, they tend to be seen as a pest because there are so many. In the west, there are hardly any to be seen. So that is part of the answer.
The hare that is running is that there are only 100 harvests left. I have asked my officials to look at that claim before. The research did not look at how many harvests soil could support. The statement is believed to have come from a PR firm looking at the work from the research group that showed that there are about 100 to 350 years of mineable rock phosphate left. That shows how sometimes a good statistic does not necessarily have all the evidence behind it.
As has been discussed extensively, the Government did recognise in their response to the Committee’s inquiry that the planning process is the main driver for dealing with land contamination issues. I recognise that some hon. Members do not feel that that is enough. I want to point out that local enterprise partnership funding is helping the clean-up of a contaminated tar works on the Tyne and in Merseyside, and that 120 acres of contaminated land is being reclaimed as part of a LEP-funded development. The UK’s risk-based approach ensures that the protection of health and the environment is balanced with the need to enable development and we also promote the use for development of brownfield sites over agricultural land. I will follow up with the Department for Communities and Local Government on the points raised by the hon. Member for Bristol East (Kerry McCarthy).
We recognise that there will be sites that will not be developed that may still pose some level of risk. In those instances, it is clear that the responsibility is with the local authorities, which identify contaminated land in their areas and ensure that risk to human health and the environment is dealt with. They must also identify who is liable for the cost of clean-up and rigorously pursue those deemed responsible. In response to the point made by the hon. Member for Angus (Mike Weir), if the Ministry of Defence is still in charge of the land to which he referred, I am sure that the Scottish Government, to which of course this issue is devolved, know whom to pursue.
Local authorities have the responsibility of deciding the priority given to contaminated land. I would like to commend Wakefield Council, which has committed £750,000 over five years to the investigation and clean-up of contaminated land. In our reply to the report, we committed to determining whether any local authorities were unable to respond to the two most recent surveys. My officials have found that 14 did not do so and we will be investigating the reasons why. No impact assessment has been undertaken.
The hon. Member for Rochdale (Simon Danczuk) spoke passionately about a particular site. I understand that he met my predecessor to discuss the issue and it was agreed that he would speak to Department for Environment, Food and Rural Affairs officials again, once a site report was available. That offer still stands, but I do not believe that the Department has been contacted.
On soil carbon and climate change, the Secretary of State reaffirmed this Government’s support for the Paris initiative at a climate friendly landscape meeting hosted by the Prince of Wales’s International Sustainability Unit on 26 October. Of course, we must use methods appropriate to our local environmental conditions. Opportunities are limited for most UK soil types to increase carbon stores, except for peatland, of which the United Kingdom has a high proportion. Our focus is therefore their restoration, both through Government funding such as in the Dark Peak nature improvement area and Humberhead peatlands restoration, and through supporting private sector initiatives, such as the Peatland code, to provide businesses with tools and opportunities to invest in nature. We are also supporting the horticulture sector to work towards the removal of peat use in horticulture.
On upland peat, we are committed to continuing to work with moor owners and stakeholders to further improve management practices and peat condition. The Blanket Bog restoration strategy uses an outcome-focused approach and is working to ensure that we have site restoration plans on a site-by-site basis. I think we all agree that dry, degraded peat is not in anyone’s interest and that is why we have been working with the International Union for Conservation of Nature to develop a UK peatland strategy. I am pleased to say that that went out for consultation yesterday. We will provide more detail in due course on how we plan to implement that strategy in England; officials are already working on it.
Some £100 million of capital funding is being invested directly in projects to support the natural environment, including the restoration of peatlands. That figure has not been split up and I do not have a figure for soil health—I am not aware that it has been identified in that sort of way—but it is fair to say that, when we finally have the 25-year environment plan, that will help us to target the resource to the right places.
There has been one peatland buyout. It is not considered to be part of our strategy going forward, but lowland peat will also be considered in the England peat strategy in due course.
We agree that it is important to monitor soil trends, but we need to ensure that we use available public funds cost-effectively. Most soil properties change very slowly over time and soil monitoring is expensive; monitoring is not justified over periods of less than five years. That is why we are looking to innovative methods of gathering the data needed to obtain a strategic picture of soil health, including remote sensing photography using drones and caesium-137 radionuclide as a tracer of non-visible soil erosion.
In the Government’s response, we referred to the potential for using farmer data. I recognise what the hon. Member for Wakefield said about whether that is representative and the need to mention peat and the coastal land. People do farm on the coast of course, but I will reflect on what she said.
Traditionally, soil monitoring has been carried out by expensive one-off monitoring events. The last countryside survey cost around £10 million. An alternative option would be to have a rolling programme of monitoring, where a subset of sites are monitored each year. The approach in Wales was mentioned. The agri-land in Wales is considerably smaller than that of England and extrapolating that would cost a very high sum indeed, but we do have an ambitious research programme that is exploring how we can improve our understanding of soil condition resilience, in collaboration with the research councils, and we are looking to review our knowledge gaps. The review is still being looked at to assess its findings, but we have set up the Sustainable Intensification Platform, which will study what can be done to improve both the productivity and sustainability of the farming system.
On the Centre for Ecology and Hydrology’s proposal that will cost around £150,000 a year, my understanding is that that is only the cost for chemical properties and does not include the cost for measuring earthworms, which my hon. Friend the Member for Taunton Deane thought we should do.
On cross-compliance and future agricultural policy, we introduced new standards in the 2015 to 2020 cap and it is too early to assess whether they are having the intended impact. It is critical to say that any future agricultural policy framework will absolutely have the environment at its heart. It is not just about not compromising soil health; we must look to enhance it.
It would be difficult to publish our plan by the end of the year, but I assure hon. Members that the intention of this Government is to have a smooth Brexit. Operability is the key focus of my officials at the moment. With regards to the emissions reduction plan, DEFRA officials are running scenarios, including on peatland and salt marsh, to see how that can be part of the plan. I am due to meet the Minister for Climate Change and Industry, my hon. Friend the Member for Ruislip, Northwood and Pinner (Mr Hurd), to discuss that this month.
I could say more about protecting water quality. There are some new rules that we have consulted on and we are considering those responses carefully. We may well be drawing up secondary legislation to bring that into effect. I assure hon. Members that a series of measures are happening through the countryside stewardship scheme, which I hope will help farmers to do their bit to improve the soil health that they have.
On maize subsidies, the hon. Member for Wakefield will be aware that we are not the lead Department, but the proposed feedstock restrictions will help to deliver our objectives of waste management and low-carbon energy, and we are discouraging new anaerobic digestion plants that intend to use a high proportion of feed or feed crops. That is why we are looking to restrict or eliminate payments for biogas derived from crops.
In conclusion, the benefits derived from healthy soil are many. Farmers work hard to maximise their production and we do want to ensure that that is not at the expense of soil health.
Motion lapsed (Standing Order No.10(6)).
Post Office
(7 years, 5 months ago)
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Backbench Business
(7 years, 5 months ago)
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Kelvin Hopkins (Luton North) (Lab)
I beg to move,
That this House has considered the future of the Post Office.
It is a pleasure to serve under your chairmanship, Mr Wilson. I am pleased to secure this important debate on the crisis in the Post Office. First, I must declare an interest: my constituency Labour party has a formal agreement with the Communication Workers Union, which provides financial support, and I am a member of the union.
The Post Office is inflicting severe cuts. Its cost-cutting measures are affecting both its employees and the public it serves. Some 59 post offices are being closed or franchised, and the Post Office’s defined-benefit pension scheme is being terminated. That has all come about as a direct consequence of the separation of the Post Office from Royal Mail when Royal Mail was privatised. Cuts to Post Office funding followed, and the Government failed to deliver on their 2010 promise to turn it into a
“genuine Front Office for Government”
and to grow its financial services.
This is a matter of serious concern. Trends in the Post Office’s traditional work and the lack of a proper strategy for growing new revenue mean it will not have a secure long-term future, or possibly a long-term future at all. It cannot survive simply by imposing cuts and going through further cost-cutting regimes. The Government must stop the cuts—particularly the proposed closures and franchising—and bring together stakeholders, including the Post Office itself, trade unions, and industry and customer representatives to develop a meaningful and convincing plan for the future.
Mary Creagh (Wakefield) (Lab)
My hon. Friend is making an excellent speech. WHSmith is now operating more than 100 post office branches. Does he agree that the franchising operation means that the Post Office is losing experienced staff, providing poorer service and offering a smaller range of services? For example, the closure of the Crown post office in my constituency means that the biometric enrolment service is no longer offered.
Kelvin Hopkins
I thank my hon. Friend for her intervention. In fact, later in my speech I am going to say more or less what she just said. I thank her for reinforcing that point.
Geoffrey Clifton-Brown (The Cotswolds) (Con)
I congratulate the hon. Gentleman on securing this really important debate. Does he agree that, as a result of its decoupling from Royal Mail in 2013, the Post Office has lacked an overall strategy? It should now be rethinking its whole enterprise, which should be one of growth, rather than one of contraction.
Kelvin Hopkins
I agree with the hon. Gentleman. What is happening is the opposite of that, so I want the Government to put their weight behind the Post Office to enlarge, expand and improve it.
Albert Owen (Ynys Môn) (Lab)
I concur with everything the hon. Member for The Cotswolds (Geoffrey Clifton-Brown) said. Many communities across the country—particularly rural communities—are suffering bank closures and financial seclusion in addition to the closure of Crown offices, which are the backbone of the Post Office. We need expansion, and we need it now.
Kelvin Hopkins
I agree. It is vital that rural communities, in particular, have public services, sometimes on a smaller scale, to ensure that people living in more dispersed communities have proper access to those services.
Anna Turley (Redcar) (Lab/Co-op)
My hon. Friend is being extremely generous in giving way so early in his speech. I want to follow up the point that my hon. Friend the Member for Ynys Môn (Albert Owen) made about financial services. The post office in France set up La Banque Postale, which has made £1 billion of profit, and the CWU is campaigning for our Post Office to emulate it. It should look at expanding into financial services as a means of increasing value.
Kelvin Hopkins
My hon. Friend, too, has anticipated something I am going to say in my speech. That just reinforces what I am going to say, so I am pleased about that.
The Government, bending to pressure and concerns from inside and outside Parliament, have just launched a consultation document, but it must lead to genuine action. It must not simply be a token exercise that does not change thinking in the Government and the Post Office. We need effective action to promote a long-term and successful future for the Post Office.
The Post Office’s current funding package runs out in March 2018 and must be replaced by an effective strategy and support for the future. The negotiations between the Government and the Post Office must not be simply a ritual seeking in reality just to manage decline. For customers, the most significant measures taken this year are the two announced tranches of Crown office closures and franchises, which followed an earlier programme affecting 50 Crown post offices in 2014-15.
My hon. Friend the Member for Wakefield (Mary Creagh) mentioned franchising. Independent research carried out in the past five years found that franchises left to WHSmith in 2007 and 2008 perform poorly—worse than Crown post offices in queue times, service times, customer service and advice, disabled access and the number of counter positions. That brings to mind the failure by railway franchises to measure up to the five-year record of success when the east coast main line was returned temporarily to the public sector. Franchises have also seen losses of experienced staff, fewer specialised staff and less space.
Mr David Winnick (Walsall North) (Lab)
The Post Office made an attempt to close Willenhall Crown post office in my constituency, but there was a successful campaign against the closure and it decided after a while to drop its plans. It is now going to start all over again. The closure will have a most adverse effect on the local community, in which the Post Office has so far shown absolutely no interest. It is obviously tremendously disappointing. I am very pleased indeed that my hon. Friend has initiated this debate.
Kelvin Hopkins
My hon. Friend demonstrates the point: we need to put pressure on the Government and the Post Office at both a national level and in local campaigns if we are going to save the Post Office for our communities and its staff.
For employees, good jobs have been replaced by insecure employment. In 2014-15, only 10 out of 400 staff from former Crown offices were TUPE-ed over to new retailers. Public money was used to pay off long-term staff so the franchisees could employ more low-paid, less experienced staff with less job security—effectively, a taxpayer subsidy to the private franchises. All that amounts to a failed strategy for the Post Office.
Mary Creagh
On that point, if a member of staff is TUPE-ed over, they could end up managed by somebody on the minimum wage in a WHSmith, even if they are on a significantly higher salary. That creates difficulties and tensions in the workforce in the new environment.
Kelvin Hopkins
My hon. Friend makes a good point. The union and I support the idea of having proper pay for all staff so that sort of discrimination and inequality does not occur. All staff should be TUPE-ed over as they wish. They should not just be bought off with public money to enable WHSmith to make more profit.
Neil Coyle (Bermondsey and Old Southwark) (Lab)
I thank my hon. Friend for securing this important debate. This is a big issue in my constituency, in which Blackfriars Road and Walworth Road Crown post offices are set to be franchised. Does he think that the fact that the incomes and pensions of the current staff are being put at risk completely undermines the commitment that the Prime Minister made at the Conservative conference to a more responsible capitalism?
Kelvin Hopkins
I will come on to talk about the fact that the Post Office is abandoning its defined-benefit pension scheme. That should be resisted and opposed.
The Government said that they would keep the Post Office in public ownership when they privatised the profitable Royal Mail, but franchising to private retailers is not public ownership. The public interest has been put at risk while Royal Mail is paying out more than £220 million a year in dividends. The Post Office’s revenues are falling, the “Front Office for Government” plan never actually got off the ground and Government funding is reducing.
I have a number of suggestions for the way forward. First, discussions about the Post Office’s future must be subject to parliamentary scrutiny and approval. Secondly, the Post Office must commit to making no threats of compulsory redundancy. Thirdly, the Government must deliver on their pledge to make the Post Office a “Front Office for Government” and set up a UK Post Office bank. Fourthly, the Government should stop using public money to subsidise the outsourcing of Post Office services to retailers. Fifthly, the plan to close the defined-benefit pension scheme should be abandoned; the scheme has a surplus of £130 million at the moment. Sixthly, the Post Office must be required to use the remaining Crown post offices to drive the growth of the new services and to give a secure future for the whole post office network.
The Post Office must remain as a vital public service and a community resource for the long term, with secure jobs and good terms and conditions for all its employees. My own preference is that a future Labour Government should bring Royal Mail back into public ownership and create a comprehensive integrated postal industry using internal cross-subsidies where necessary and appropriate. I imagine that may be expecting too much of the present Tory Government, but it would undoubtedly be massively popular with the public and serve us all well for the long term.
Geoffrey Clifton-Brown (The Cotswolds) (Con)
I am delighted to catch your eye, Mr Wilson, in this very important debate. I pay great tribute to the hon. Member for Luton North (Kelvin Hopkins), who secured the debate today. News of any organisation looking at the closure or franchising of 59 Crown post offices with a projected loss of 2,000 jobs should rightly be met with horror, as the hon. Gentleman described. This reduction in operations can only mean a worse service for customers, longer queues, fewer staff, worse disabled access and the loss of a crucial community asset. I am sure many hon. Members are here today because of a threatened closure in their own constituency and, sadly, I am no different. As the MP for one of the largest rural constituencies in the country, having easy access to the services that a post office provides is an utter necessity. Since 2000, the number of rural post offices has decreased by about 3,000. Likewise, the number of Crown post offices—the larger branches that have more services—has dropped by 1,200 in the past 25 years.
The largest town and principal economic and commercial hub in my constituency is Cirencester. Its branch is one of the 59 proposed closures. It operates from a leasehold property and offers a wide range of services, including access to pensions and benefits, tax payments, driving licence and passport renewals, lottery terminals and foreign exchange. The four counter positions and two self-service kiosks are often subject to long queues and high demand. For such a valuable service to continue to exist, we must look at ways for Crown post offices to diversify their services and grow their dwindling customer base. As I said in my speech on the Post Office’s future way back in 2010:
“The message that the Government need to give to the Post Office is not ‘closure, closure, closure’ but ‘opportunity, opportunity, opportunity”.—[Official Report, 2 November 2010; Vol. 517, c. 213WH.]
Mr Gareth Thomas (Harrow West) (Lab/Co-op)
I do not know whether the hon. Gentleman is aware, but there are rumours that a third round of franchise announcements and therefore closures of Crown post offices is due at any moment, with a potential loss of 190 jobs. Does he not think this debate might be an opportunity for the Minister to put some pressure on the Post Office to think again about that third round of potential franchises?
Geoffrey Clifton-Brown
I am grateful to the hon. Gentleman for bringing that to the attention of the House. I have not heard those rumours; I will simply respond with a line from later in my speech. If the Post Office were Tesco, it would be thinking not about closing profitable branches but about how to make those branches more profitable by providing a more attractive service for the customer. That is what I would like my hon. Friend the Minister to take away from this debate today. Let us see how we can make the Post Office work better for its customers.
What the Post Office needs is a proper business model for the future, which, above all, needs to consider how much of the business should be commercially profitable and which bits of it the Government, through the taxpayer, are prepared to subsidise. Although I do not agree with the hon. Member for Luton North that it should be wholly brought back into public ownership, there is no doubt, given the number of small suburban and rural branches, that it will inevitably need some form of public subsidy in future. That public subsidy should be clearly defined. The bits that can be profitable, such as the Crown post offices, should be made to operate as efficiently as possible.
Kelvin Hopkins
An internal cross-subsidy is appropriate where there is a public service component. When we had the Royal Mail and post offices effectively in one industry, cross-subsidy was possible. I think we should return to that principle of cross-subsidy.
Geoffrey Clifton-Brown
The hon. Gentleman and I are largely in agreement. I have clearly said that there will continue to be a need for an element of taxpayer-funded subsidy for areas that can never be profitable, such as some of the smaller rural and suburban branches, so there will inevitably be a mixture of the commercial, which needs to be exploited to the maximum, and an element of public subsidy.
The hon. Member for Ynys Môn (Albert Owen) mentioned the issue of banks closing. I have two important branches closing in small rural towns: Lloyds in Fairford and HSBC in Moreton-in-Marsh. Many of the services that those banks currently provide, such as depositing cheques and drawing benefits, pensions and so on, will be provided in future by the post office. If the post office then closes in those communities, my constituents in those communities will be left with a severe disadvantage.
Albert Owen
In addition to the banks closing and poor post office coverage, there is a lack of broadband and mobile coverage. So when people are asked to go online because they cannot physically get to these buildings, that is not available either.
Geoffrey Clifton-Brown
I entirely agree with the hon. Gentleman. I need to make progress now or I shall be reprimanded by the Chair for taking too long. There is so much to discuss in this debate and I have a little section in my speech about some of the innovative services that have been mentioned.
People view post office premises as dingy and out-of-date places that they do not want to visit. Clearly, the Post Office as a commercial organisation needs to do something about that. Branches needs to be attractive places that the public want to visit. The franchise model is not the nirvana that everybody thinks it is. Pizza Express, for example—I say this to my hon. Friend the Minister—was at one point 100% franchised, but the offering was so variable that the franchises were brought back into central management and it is now a highly profitable enterprise. If the likes of Pizza Express take the view that they do not want franchisees and they want to manage it themselves, I am surprised that the Post Office is not going down that path.
Geoffrey Clifton-Brown
I will give way one more time to the hon. Gentleman.
Kelvin Hopkins
I thank the hon. Gentleman for giving way; I will try to be brief. In many parts of industry now, insourcing is the buzz word rather than outsourcing. There may be a strong case for that across public services as well as in the private sector.
Geoffrey Clifton-Brown
I think it comes back to the Post Office maximising the opportunities that it has got. I want to come on to that a little later in my speech, but the hon. Gentleman is right. The Post Office needs to consider very carefully how it operates in today’s world.
When the Post Office decoupled from the profitable Royal Mail business in 2012, little was done to create a coherent strategy for the future. Now, in 2016, with the change in retail banking behaviour and the closure of more than 1,700 branches across the UK in five years, small businesses need a post office bank even more. Currently, the Post Office provides access to business accounts for some of the bigger high street banks rather than its own service. However, this is limited, slower and inconsistent in terms of provisions across the network.
Geoffrey Clifton-Brown
I have given way an awful lot. I might give way a little later in my speech, if I may say that gently to the hon. Gentleman.
For the estimated 1.5 million adults in the UK without a bank account, an affordable service, such as a post office bank account that offered responsible deals on personal loans, would help to tackle the problem of payday lenders that charge huge annualised sums. It would be of great benefit to some of the poorer people in our society. After all, if Tesco opened a wholly owned bank eight years ago, notwithstanding its recent hacking problems, why cannot the Post Office do the same? Tesco has innovatively expanded a range of financial services. As has been mentioned, across the channel, La Banque Postale has a mandate to increase access to financial services and offer microcredit loans to those who have previously been financially excluded.
Phil Wilson (in the Chair)
Order. May I respectfully remind the hon. Gentleman that he has been on his feet for nine minutes, and quite a few other Members want to get into the debate? If he is nearing the end of his speech, I think that everyone will appreciate that.
Geoffrey Clifton-Brown
I am grateful, Mr Wilson; I have taken rather too many interventions, so my speech has become rather too long.
The Post Office ought to look at innovative ways to improve its services. Its post offices are dull and dingy places, but perhaps it could spruce them up and think about such improvements. There are all sorts of ways it could improve what it offers, such as internet hubs and internet cafés, business hubs and collection points for local authorities, and subletting if the premises are too large, as has been done in Penge.
I pay tribute to postmasters and postmistresses and their staff throughout the land, who do an incredible job. Often they go way beyond what their employers require, to help their communities. The post office is the glue that holds this country together. I appeal through the Minister for the Post Office to reconsider, among other things, its decision to close the Crown post office in Cirencester. It must be highly profitable, so why is it being closed? The Minister needs to look carefully at the closure process, to see whether it is the right thing for the country.
Phil Wilson (in the Chair)
As quite a few hon. Members want to take part in the debate, I ask them to restrict their comments. I do not want to introduce a time limit, but it might come to that, so hon. Members need to be careful about interventions.
Danny Kinahan (South Antrim) (UUP)
I congratulate the hon. Member for Luton North (Kelvin Hopkins) on raising this matter.
I apologise for being slightly parochial, but in Northern Ireland there are some 500 post offices, and we are going through exactly the same problems. A recent report commissioned by the Government and carried out by YouGov and London Economics looked at the social value of the Post Office. From the survey, they found that 95% of individuals and nearly 90% of small and medium-sized enterprises used post offices at least once a year; but there is much more to it. The people who use them like using them. In the street as I was walking here, I met two people from the west country, and we discussed the fact that I would be speaking in the debate. They were senior citizens—elderly; they said they did not want to go digital. They like the community hub that works around the post office, and said please would I stand up for that.
I have twice spoken on this subject at Stormont. I was there only five years, and as a new boy it was almost the first thing I spoke about. There was a document about the six steps to save the post office; they included banking, broadband and working with everyone. It was a fantastic idea and everyone supported it, but it seemed to be ignored. At the end of my time there, it came up again. The point I was trying to make, which has already been made by others, was that as well as thinking of every post office as a centre of the community we should also look at the losses to villages, towns and parts of cities where the library, pub and bank have gone and the school has closed. We should start to work with councils, parish councils and whatever community bodies are there, to identify the places that we must save, which are the community hub and the post office. Rather than let decisions about those things be made without talking to others, let us work through them and try to hold everything together. If subsidies are needed— I think that was an excellent idea—let us try to get that to happen.
We can all learn from each other, including Members from Northern Ireland and Scotland—all the devolved Governments. Let us try to find policies that will pull things together, so that the Post Office must talk to us before it starts closures and we can work out how to save a town’s post office. My post office in Antrim has been having a battle to find a place to go. The chemist and the local retail shop turned it down. By the time a decision was made, everyone thought the post office was closing, and the figures had gone down; so those concerned did not want it, because it was not going to bring anything. We need to talk before the news gets out and causes such a reaction.
Albert Owen
That is absolutely right. Llangefni in my constituency put a petition before Parliament. We won the argument; those concerned agreed with us then. However, the Post Office has come back with the same proposal to close the same Crown post offices. It is not listening.
Danny Kinahan
That is exactly the point; the Post Office is not listening, but it needs to. At least it has put a consultation out, in our case; but it should listen before decisions are made. I make my plea—let us all talk to each other, consider towns and the centres of communities, and work together.
Phil Wilson (in the Chair)
If hon. Members keep their remarks as brief as that, we may get everyone in.
Marcus Fysh (Yeovil) (Con)
It is a pleasure to follow the hon. Members who have spoken already.
I want to support the millions of customers all over the land who rely on the Post Office service in many remote areas as well as in towns. A post office recently closed in my village, East Coker, so I understand how important that is to a community; but it is true even in big towns such as Crewkerne, where the town centre post office recently closed.
Phil Wilson (in the Chair)
Because we donated 15 minutes to the Division, we will now finish at 4.45 pm. I want to bring in the Front Benchers at a quarter past 4. I reiterate that if people limit the time that they take, everyone should get in. I call Marcus Fysh to continue his speech.
Marcus Fysh
Thank you, Mr Wilson. I was saying that it is often only when a community faces the loss of its post office that it realises what a wonderful service the post office system provides. I speak in support of not just the customers but the postmasters who provide that service.
Post offices are often owned by hard-working families who constantly look for ways to improve their flagging profitability and get more footfall. Postmasters run 97% of the country’s 11,500 post office branches, but they lack any meaningful union membership or collective voice. They are represented only by the National Federation of SubPostmasters, a trade association that is funded in part by Post Office Ltd. NFSP chief executive George Thomson recently said that “without serious changes” to the Post Office Ltd business,
“there may not be a network to fight for in the future.”
Successive Governments have spent billions subsidising Post Office Ltd. Some £2 billion of taxpayers’ money has been used on the latest network transformation programme, which has not yet proved able to make the network sustainable and profitable. The Post Office has halved its losses in the last financial year, but that seems to have been done at the expense of postmasters’ pay and increasing branch closures and redundancies. The front-line service has suffered: the queues remain and extended opening hours are sometimes inconsistent and quite unpredictable. We must ask why. In many cases, postmasters are struggling to staff and operate their branches on the money that the Post Office now pays. The reduced revenues from core services simply make many things that post offices do unprofitable, and I know from speaking to postmasters up and down my constituency that they are genuinely concerned about whether they will be able to keep going with those things.
Hon. Members have made several useful proposals during the debate, and I urge the Government to consider them carefully, because Post Office Ltd itself does not seem to have any obvious plans to introduce new services or increase revenue in a way that could help. A growing number of post office branches are up for sale—there are currently more than 730 advertised on the Daltons Business website alone.
One of the key issues with the franchise model that we need to look at is that the computer system on which the whole network relies is well and truly overdue for replacement. It is, in fact, at the centre of an ongoing High Court action. Thousands of postmasters have been blamed for losses that may in fact have been caused by the use of that computer system. Some of those postmasters have been convicted and some have been made bankrupt by the Post Office, and losing that court action may pose a major solvency problem for the Post Office itself. I call on the Government to look into that with some urgency.
In that context, it should not be a major surprise that the unions are taking action, although the Post Office’s move away from a defined-benefit pension scheme is possibly not the right point to complain about, given that there has been a major move away from such schemes in almost every other walk of life in recent years. We need to look at the Post Office; it is in danger of running out of control and its governance issues require serious work and attention. I urge the Government to take an active role in that, because postmasters and their customers up and down the land really depend on the Post Office.
Catherine West (Hornsey and Wood Green) (Lab)
It is a pleasure to serve under your chairmanship, Mr Wilson. I congratulate my hon. Friend the Member for Luton North (Kelvin Hopkins) on securing this important debate.
There are two affected Crown post offices in my constituency. Local people have pointed out to me that that is particularly bad news for disabled people and there will be a reduction in post office services in the area. Tens of thousands of pounds have recently been spent on refurbishing the Crouch End post office. There seems to be a distinct lack of logic in ploughing a whole lot of public money into doing up a post office and promptly closing it. In the case of the closure of Muswell Hill Crown post office, there is a further risk to local jobs, because there are another 60 jobs at the Royal Mail sorting office behind the post office. In the London property market, once the doors of a facility like that close, a real estate agent will pop up and sell it either for some sort of housing development or more coffee shops. If there is one thing that Crouch End does not need, it is more coffee shops. We need proper services for local people.
In the various parts of my constituency that have become more populous in a short time, with denser housing developments, we desperately need services such as post offices. A petition has been signed by hundreds of thousands of local people. Will the Minister say whether that petition has been taken into account? I have not met anyone locally who wants to see the doors of the Crown post offices close.
On parliamentary scrutiny, I have been asking for months for some sort of debate. I am pleased that my hon. Friend succeeded in securing this debate, but there has been a lack of debate. I requested a meeting with the Minister, but I was not successful. I also requested a meeting with her predecessor, who sits in the House of Lords, and was again unsuccessful. Will the Minister pledge today to meet those of us who are affected so we can each have a few more minutes to go into detail about this urgent issue?
Margaret Greenwood (Wirral West) (Lab)
I refer Members to the fact that I received tremendous support from the Communication Workers Union during my 2015 general election campaign. Does my hon. Friend agree that as we approach Christmas, the importance of the post offices at the centre of communities is heightened? Although I understand that her constituency is densely populated, that is particularly important in constituencies with rural areas.
Catherine West
My hon. Friend makes a very good point. Regardless of whether they are in rural areas or urban areas, post offices are places where people can meet friendly faces, so they do not necessarily have to do everything over the internet. We all treasure that kind of community service.
Will the Minister also tell us whether the Government’s consultation is genuine? Time and again, we have had an announcement by the Post Office, a rather anodyne meeting and then a sense of resignation—a sense that “We’re just going to close them anyway.” If the consultation were real, we would have a genuine dialogue and a genuine sense that what we as Members of Parliament said was actually going to make a difference. Sadly, there is a fog of resignation over this issue. I fear that that is why many people tell us that they feel disconnected from national politics. They spend hours lining up to see us at surgeries to tell us something and then we do not get a result. It is not through lack of trying. Thousands of petitioners stand outside in the snow, hail and rain, collecting signatures that their MP cannot even get a response to. I am sounding a bit frustrated because that is how we feel—those of us stood outside the post office, Saturday after Saturday, getting signatures for petitions but not getting a response. I want an assurance from the Minister that the voices of Members of Parliament will be heard and that the consultation is not just a sham.
I always want to be a positive Member of Parliament, so I want to give the Minister some ideas. Suggestions were put forward in “Securing the Post Office Network in the Digital Age” in November 2010 to make it the front office for Government and to grow financial services. We know there is a crisis in the general high street banks. After all the banking scandals, people cannot trust whether the bank is on their side, but people do trust the Post Office as an emblem, a community symbol and a friend.
I hope the Government will look again and genuinely consider what we have to say. We are here not because we want to spend more time with each other, but because people want our voices to be heard. Will the Minister give us a reassurance—as a new Minister, there is a new opportunity—that she will listen to us genuinely and give us a positive hearing? People want their Crown post offices, so listen to our voices and think again rather than implementing these foolish and unpopular proposals.
Tom Tugendhat (Tonbridge and Malling) (Con)
I pay tribute to the hon. Member for Luton North (Kelvin Hopkins), with whom, unusually, I found myself agreeing quite a lot. It is a pleasure to be here in the interests of the community I have the privilege to represent. Just over a month ago, the Post Office told me it was opening a short consultation on the proposed closure of a Crown post office in Tonbridge. That is a post office that many people rely on. I wrote to the Post Office on 14 October asking for details and the reasons for the closure. I wanted to know exactly which services it was to discontinue and which it was to carry on providing in a nearby stationer’s. After a month, they had not responded, and when I finally did get a response it did not answer the questions I had asked.
That was particularly disappointing because the Tonbridge Crown post office, like many around the country, as we have heard—indeed, as far afield as Northern Ireland and the Cotswolds—is essential to the community, just as post offices are across our land. They are, of course, the very beginning of our true national identity, when the Post Office really did tie the nation together, with the penny post, linking it through the train network and creating one truly United Kingdom.
For too many, that idea has gone. That is wrong, because the post office sits as an important part of our newly refurbished high street in Tonbridge. It is not just important for the elderly; it is particularly important for those with accessibility needs. My community is privileged to have a post office that is near to disabled parking bays and which has good accessibility, appropriate seating and wide enough aisles. It is therefore suitable for people with accessibility issues. In the proposal, such services would not be offered and the narrower corridors and seating would cause problems.
Kelvin Hopkins
I strongly agree with the hon. Gentleman. The survey I mentioned in my speech about WHSmith franchises said that they do not provide for people with disabilities in the same way as Crown post offices.
Tom Tugendhat
The hon. Gentleman is right, and that is what we may see in Tonbridge if the decision is not reversed. I will ask the Minister to raise her voice in support of the petition.
I would like to quote Gordon Lawrence, a resident of Tonbridge who wrote to me last night. He said:
“As you have rightly said, the town is undergoing a transformation, certainly since I arrived here in 1984, almost unrecognisable in the way the character has changed. The building programmes that have been initiated over recent years, with those still to come, have increased and continue to increase the local population”.
In the context of a growing town with an increasing population, it baffles me that the Post Office feels that a site that it only recently spent an awful lot of money redeveloping to make more accessible and approachable should now close when it is clearly being heavily used. Indeed, when I go to the post office, as we and many of our constituents do, to send large numbers of letters, I notice clearly how many people are using it at many times of the day.
Having failed to get satisfactory assurances from the Post Office to address the concerns I first raised at the start of the consultation, it has become clear that this move is not in the best interests of the people. That is why I launched a petition just over a week ago calling for the Post Office to change its decision, and already 1,500 people have signed it. From Tonbridge, a town of 30,000-odd people, 1,500 is a significant number—it is 5%. As we all know from petitions in our communities, that is a hell of a return. Indeed, 99% of the people I spoke to indicated that they were unhappy with the closure.
The proposed location is another WHSmith, as the hon. Member for Luton North identified, with narrow corridors and without seating or accessibility. The point the Post Office seems to make is that that will lead to longer opening hours. Well, opening hours are not everything, especially for those who cannot get inside or get the services they want. Opening hours are certainly not everything if the services needed, whether biometrics or parcel post, are not available.
Sadly, I have seen that not only in Tonbridge—I know many people are talking about the same in other communities—but in another area I have the privilege to represent: the village of Hadlow. The community has benefited from a local post office, but again that is being squeezed. The term “local” has a specific meaning in the Post Office business model that I would like to explore a little more. According to the Post Office, a local post office is one with extended opening hours. That sounds good, but the House of Commons Library tells us that a local post office does not have all the services of a traditional Crown post office. That is why I am campaigning in my community, as I know many others are in theirs, to have stand-alone Crown post offices defended, because for so many of us they offer that essential link not only to keep the nation together, but to keep people in touch with their families and enable all the wonderful trade that we have seen grow—in internet packages and all the rest of it—to develop even further.
In villages from Cowden to Mereworth, which have lost post offices over the last century, it is essential that we reinforce the need for the stand-alone Crown post office. I will lodge a petition on that with the House this evening, and I would welcome the Minister’s support in changing the Post Office’s decision.
Patricia Gibson (North Ayrshire and Arran) (SNP)
I thank the hon. Member for Luton North (Kelvin Hopkins) for bringing the debate forward. I really wanted to speak in the debate because I recall the round of post office closures in 2008 and 2009. I remember going door to door with others gathering hundreds and thousands of signatures on a petition to save local Crown post offices in towns around what came to be my constituency. That was done in response to the anger and despair so many felt about the closure of the local Crown post offices. I remember speaking at public meetings when I encountered at first hand the sense of resignation felt by too many people that what they wanted and their community felt it needed was simply not valued—it did not matter to the powers that be. In the event, five vital and much-beloved post offices were closed.
We often hear politicians talking about community—how it is important, how it matters and how it should be valued. It should also matter when a community comes together to express its concern about a valued asset, the local Crown post office, which in so many ways is the beating heart of a community, if not one of its ventricles. Post offices provide a lifeline: they are the lifeblood, even, of our communities. That is even more true of our rural communities. For such communities, post offices boost their diversity and resilience as well as protecting jobs and customer service.
The decline of the Crown post office is a matter of great sadness. Over the years, this trusted institution on our high street—perhaps it is the most trusted institution on our high street—has been stripped of too many of its functions. That is despite its highly trained staff and its perfect position to provide banking and other services. However, instead of modernisation, increasingly we see decimation.
More and more services are being outsourced to retailers such as WHSmith, with that chain installing its wee counters at the back of its stores, meaning poorer service as well as the loss of a beloved community asset. WHSmith and other outlets do not want to match the terms and conditions that the Post Office offers its employees. Even if it did, the income that the post office counters offer those retailers would not cover that cost, so there is now the absurd situation of the Post Office using tens of millions of pounds to pay off long-serving staff, so they can be replaced by part-time workers on the minimum wage, which has led to uncertainty and understandable industrial unrest across the whole network.
The Scottish National party firmly opposed the privatisation of Royal Mail. However, at the time it was privatised the UK Government said that the Post Office would be kept wholly in the public sector. Instead, a new 10-year deal with WHSmith to relocate yet more post office branches into those stores was announced. Will the Minister tell us where this is leading? Will she give us assurances that the promise to keep post offices in public ownership will be honoured?
Franchising is quite rightly viewed as soft privatisation, and the Minister needs to address that point to reassure Members. We need to know that our post offices have a future, and that that future is in the public sector, as promised. We need a plan for our post offices, and we could do worse than explore the measures France undertook for its post offices when it established La Banque Postale— excuse my pronunciation. Alongside those problems, we have seen high street banks gradually withdrawing and retreating from our high streets, so that must be a reasonable option.
Like in France, our post offices could make a plan to grow revenues in areas such as financial services, with which France has had huge success. Our post offices need not be in managed decline, and I am very interested to hear the Minister’s response and how she views the future of what remains of our post offices, which are community assets held in deep affection, and how they can be secured.
Mr Gareth Thomas (Harrow West) (Lab/Co-op)
There are five questions that the Minister should answer. Before raising them, I join other Members in praising my hon. Friend the Member for Luton North (Kelvin Hopkins), and I echo his declaration of interest.
First, it would be helpful to hear from the Minister why she thinks Post Office income from financial services have grown so slowly? It was heralded as part of the great future for the Post Office by Vince Cable when he launched a document on its future back in November 2010. Secondly, why has Government business going through the Post Office been allowed to plummet? Ministers promised the reverse, again back in 2010.
It is not only the French who seem to be able to run postal services better than the current Government. The Italians have also made a huge success of getting a post office bank up and running. Similarly, New Zealand has a highly successful post office bank, which was established in the past 15 years. There are successful models involving financial services. What is striking about the debate is the cross-party concern about the crisis in the Post Office at the moment.
Thirdly—I ask this as a Co-operative Member as well as a Labour Member—whatever happened to the idea of the Post Office becoming a mutual, with a more involved workforce and local community involvement to help to plot a more co-operative future for the Post Office? The last ministerial mention of that vision from November 2010 that I can find was in November 2013. It would be helpful to know whether the Minister still adheres to that possibility. Fourthly, is the Post Office’s 2018-19 funding package, which I understand is being negotiated in Whitehall at the moment, going to lead to more closures and to more full-time employees being pushed out of the door, or is it going to be a genuine opportunity for serious investment in new services?
Fifthly, and lastly, as I understand it, the 10-year contract that the Post Office has with Royal Mail can be reviewed from January next year. It would be good to hear reassurance from the Minister that Royal Mail intends to stick absolutely to the terms of its contract with the Post Office going forward.
Post Office revenues from Government services have fallen by almost 40% since 2010, as no new Government services are using the Post Office. Of those that still are, many Departments are promoting online alternatives. Again, it would be useful to hear from the Minister what discussions she has had with other Government Departments to encourage them to use the Post Office. I ask that question because the Post Office being the front office for the Government was the first part of the great vision that Vince Cable set out in November 2010. If revenues from Government services have declined by 40%, it raises some fairly alarming questions. There are rumours that Government insiders themselves accept that that option for the Post Office’s future has largely been a failure.
The second objective that Vince Cable set out was the expansion of financial services. The Post Office’s revenue from financial services has grown by just 2% over the past six years. Why does it still not offer a business account? In one of the district centres in north Harrow in my constituency, there is no bank, and there has not been for some time. The Post Office is the only financial services player still in existence there. The option of a business account would be hugely beneficial to small businesses in that one district alone.
I am told that the Post Office is trialling a current account. Indeed, we are apparently four and a half years into the trial; it was supposed to launch in 2014. Why has it taken so long before that product could possibly be launched? There is no dedicated children’s product either. I am aware of the junior individual savings account, but £500 has to be put into that account up front to get it up and running, and that money cannot be accessed until the child turns 18. Given that many people stick with the financial services provider that they start with, it would surely make good economic sense for the Minister to insist that the Post Office quickly gets its act together on a dedicated children’s product.
All of those problems suggest a business that is not taking seriously the ambition of substantial revenue growth from financial services, as Vince Cable once promised. The hon. Member for Yeovil (Marcus Fysh) rightly praised the contribution of postmasters and postmistresses—particularly those who are members of the Federation of Small Businesses. The FSB published a report in October called “Locked Out”, which said:
“Business banking services provided at some Post Office branches and franchises are too limited. Some services, such as cash and cheque clearing facilities, also appear to be processed more slowly than in bank branches. Other services, such as inter-account transfers and currency exchange, are not available. As the future of the network moves away from full-service post offices to franchises there is concern about the impact on small business access.”
It is not just the Communication Workers Union and staff that want change in terms of financial services; it is small business that have genuine concerns. I hope that the Minister will act.
Mr Mark Williams (Ceredigion) (LD)
I will be very quick. In many ways, I will reiterate many of the messages that we have heard in the Chamber this afternoon. I will reflect specifically on the position of the Crown post office in Aberystwyth in my constituency.
Many Members have talked about the inadequacy of the consultation process and the complete inability of the Post Office to listen to the many representations that have been made. That is certainly the case with the campaigning that we undertook in my constituency. We were not surprised that WHSmith emerged as the franchisee in Aberystwyth. Of the 28 branches where franchise partners have been announced this year, 27 have been with WHSmith. I have to say that, since the announcement of a consultation in March, nothing more than lip service has been paid to that word.
Neil Coyle
It is very difficult for Post Office representatives to listen to local communities when they do not even attend a meeting. The Walworth Society in my constituency set up a public meeting with councillors and myself, and the Post Office did not even turn up.
Mr Williams
I have had exactly the same experience in my constituency. We had two public meetings. The Post Office came to the second one, but not the first. We had petitions and demonstrations. We made representations to everybody, with four political parties working together on the streets of Aberystwyth. It was a very good experience, but it has had absolutely no effect on WHSmith whatsoever. Individual managers have been courteous and polite, and have occasionally answered the phone and come to see me but, on the substance of the case, we have been well and truly ignored.
The Post Office still has not addressed the fundamental concerns we have raised. The research undertaken on the record of WHSmith by Consumer Focus—a very good organisation that existed at the time—concluded that queue times, services times and customer advice are all worse under WHSmith than they were under the Crown post office regime. There are also genuine concerns about disabled access, the number of counter positions open and congestion in the shop. Of course, there is also the impact of losing good, hard-working staff who have years of experience.
The CWU has said—this is worth noting, and I hope the Minister will convey the concerns about the consultation process to the Post Office—that it is unaware of a single case where public consultation has overturned the Post Office’s proposals in recent years. My constituents in Aberystwyth are convinced, as I am, that the whole process is an utter sham.
I want to talk a little about the staff and how they have been treated. They were given three options, which seems clinical and very kind to be given three options. They were given the opportunity to take redundancy. In peripheral parts of Wales, if we go as far as we can to the west, the opportunities for good, well-paid jobs are few and far between. Secondly, staff were given the opportunity to redeploy—this is the option that really got to the emotions of many staff—to the nearest Crown post office. If we picture Aberystwyth on the weather map on the news, it is in the middle of the west coast of Wales. The nearest Crown post offices that my constituents could relocate to were in Port Talbot or in Shrewsbury across the border in England. That is not an option for my constituents at all. The third option was for my constituents to go down the route of TUPE agreements, which we have heard many concerns about. I am genuinely concerned. We might seem to have lost the battle, but like the hon. Member for Tonbridge and Malling (Tom Tugendhat), I appeal to the Minister at this late stage to get involved in this case and to do what she can to influence things.
I am conscious that my friend, the hon. Member for Merthyr Tydfil and Rhymney (Gerald Jones), wants to speak, so I will finish by saying this. We have lost post office after post office in rural communities. We can wax lyrical about the emotions of it and the effect on rural communities, but they are very real. We are talking about some of the most scattered, remote rural communities. When the pub, the church and the school have been taken out, the final blow is when that community loses its post office, which has a galvanising role. That has been the record of successive Governments, including coalition ones in which Liberals were involved, the current Government and preceding ones. We have to reverse that trend. We have to look at a sensible level of subsidy to sustain the network in rural areas, because once it is gone, it will not come back.
Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)
It is a pleasure to serve under your chairmanship, Mr Wilson. I too will be brief, because I am conscious of time. I congratulate my hon. Friend the Member for Luton North (Kelvin Hopkins) on securing this important debate.
Post offices provide an essential service to communities right across the UK. It is important that, through any potential future changes, that service remains rooted in our communities and that we keep the public at the heart of the services provided. The Post Office has been described as a national institution that is at the heart of society. Many post offices, like the ones in my constituency, are more than just a post office; they are a hub for the community. Most are also shops or a place to buy confectionery or stationery. In my constituency, there are many isolated communities, and many people who go to the post office to post letters or collect pensions also benefit from the social interaction there.
We know that lifestyles have changed. I am sure we all understand that, although in the past post offices were used for a multitude of services, many of those services are now available elsewhere or indeed online, so it has become increasingly difficult for post offices to remain viable without diversifying. However, changes to the delivery of post office services need to be carried out in consultation with and with the support of local residents, who are, after all, the customer.
I have particular concerns about the process of making major changes to the delivery of post office services. Following an extensive consultation process, the Post Office recently announced that it is proceeding with the relocation of a post office at Elliots Town in my constituency under the modernisation and transformation programme. Those proposals are bitterly opposed by the local community. In this case, the consultation process involved two public meetings attended by more than 100 local residents on each occasion; representations from local councillors, myself and the Assembly Member; and a petition signed by more than 1,000 local people, who raised common issues of concern about the suitability of the proposed new location in terms of access, privacy, parking and so on.
In addition, proposals were put forward without the support of the current post office operators, who wish to maintain the current location and are likely to lose their jobs as a result of the post office being franchised. I am deeply concerned that many of my constituents in that area feel that the Post Office has not listened to their concerns. Many feel that the current popular post office meets their needs and they do not understand the need for change at this time. A large number of local residents have threatened not to use the post office in future if proposals are implemented.
For post offices to remain a viable part of community life, the Post Office needs to be responsive to and understanding of the concerns of its customers. Will the Minister comment on the general principle of the Post Office’s response to public consultation? Does she agree that the Post Office must ensure that consultation is meaningful and that any decisions it takes about the future of post offices should be in line with what its customers want and expect?
Phil Wilson (in the Chair)
Before I call the Front Benchers, I remind Members that I would like to leave a couple of minutes for the mover of the motion to sum up at the end.
Mhairi Black (Paisley and Renfrewshire South) (SNP)
It is a pleasure to serve under your chairmanship, Mr Wilson. I commend the hon. Member for Luton North (Kelvin Hopkins) for bringing this debate to the forefront today.
As we have heard, post offices clearly provide a lifeblood for so many communities. Sometimes, that is easy to forget in the age of texting and emails, but the fact remains. Paisley has a population of 76,000 people. It is the fifth largest place in Scotland. I know that some Members have spoken about post offices far out in rural areas, but I want to talk a wee bit about urban post offices like one in my constituency. The post office is located in the Piazza, which is one of Scotland’s most successful shopping centres in terms of occupancy levels. Most, if not all, of its units are in use. It has its own security guard service. People feel safe and appreciate the fact that vulnerable customers feel at ease when they go to collect important documents, their money, pension or whatever else. The location is absolutely perfect. It is located straight on the high street, which is right beside the bus stops. The doors and lifts from the car park are literally right beside the post office.
Andy Furey from the CWU, who is here today, told me that Paisley was the golden standard of post offices. It provided a specialist service. It had staff with 20 or 30 years’ experience behind them. It was accessible, and it was spacious. That post office has shut today. As we debate this right now, that post office has closed its doors. That will have devastating consequences for Paisley as a town.
Currently, we are endeavouring and bidding to become the city of culture for 2021, and we are trying to shine a light on the culture and level of community that we have in Paisley. Despite all we have to offer, most would agree that Paisley is not without its problems. We are desperately trying to get the high street reinvigorated and re-energised and to boost the local economy a wee bit, yet at no point was there any consideration or assessment of what damage this closure would have on the high street or the Piazza. My office and I organised a public meeting in Paisley to discuss this. The owners of other units in the Piazza said that they benefited most from the post office because it brought in a large footfall of people who then visit their shops.
Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP)
In East Kilbride, we are also fighting to save the Crown post office in our town centre, which is crucial to the local community. If it is sold off, it will not have the specialist staff, the same service or the inclusivity for the most vulnerable. Does my hon. Friend agree that the Post Office must be accountable and that we must retain these valuable assets for our communities?
Mhairi Black
I could not agree more. An hon. Member who is no longer in her place—I cannot remember her constituency—highlighted the issue perfectly when she said that in reality we are going to lose people with special skills acquired over 20 or 30 years, who will be replaced by WHSmith staff on the minimum wage who have not had adequate training necessarily.
At the public meeting that I mentioned, the Post Office admitted that it had not considered the economic impact of the post office’s closure. Most concerning are the wider impacts for my constituents. As Members may be aware, quite a few refugees and asylum seekers have been located to Paisley. The post office in the Piazza was the only place where they could realistically have access to the Home Office’s digital application services. Now that it is losing that service, those people will be expected to travel to West Nile Street, nine miles away in Glasgow, with no money or means of travel.
The worst thing about the closure is how little sense it makes. The plan was to move this first-class post office into the wholly inadequate WHSmith—right to the back. There is no clear route from the shop’s front door to the back, which immediately restricts people with mobility problems. It is now situated on a hill, which may not seem like a big deal, but for someone aged 80 it is a considerable challenge. It is located in a pedestrian zone, so you cannot even drop someone off at the door.
At the public meeting, I blessed the folk from the Post Office who had to come along to argue for the change because they were eaten alive. Their figures were wrong and they could not tell us basic facts for ridiculous reasons. They could not tell us whether the post office was making a profit or a loss, or how big the loss was. They could not tell us what the footfall was. It was embarrassing, if I am honest.
We were told that there would be a consultation. Consultations can be a good thing—I am doing one now for my private Member’s Bill—but to be good they have to be genuine. This one seemed to be total lip service. At the end of it, despite the fact that I have genuinely yet to meet anyone in favour of the proposed change, as with so many others we have heard about, the Post Office said that the change would happen anyway.
I know that many healthy suggestions were made—I know because I made many of them—such as that the post office currently has three units in the Piazza, so why not close one or two if they were costing money. The CWU rightly pointed out that, if the Post Office is seeking a franchise partner, the most obvious candidate is surely Royal Mail. It was almost as though it did not matter a jot what suggestions were made because the move was happening. Lo and behold, I then discovered that WHSmith was advertising jobs for the new post office two weeks before the consultation finished. The whole thing was a sham.
I tried repeatedly to have a meeting with the Post Office’s chief exec, but that was refused point blank. My request went backwards and forwards. Eventually, I said, “I will go anywhere at any time for a five-minute meeting. Just tell me when.” There was no reply. The lack of accountability during the process was incredible. The whole thing was a done deal from the start.
In the Chamber a couple of months ago, I asked the Minister how much money had been spent on refurbishing the post office in Paisley since 2010. He said that nearly £500,000 of public funds had been spent doing it up, only for it to be sold off to WHSmith. The reality is that this is privatisation through the back door.
What does WHSmith know about postal services? It is falling behind in terms of quality of service and the different things it sells in its shops. If it is already struggling, what is its motivation for taking on a post office that is apparently haemorrhaging money left, right and centre? Why would it want that post office if it is losing so much money? If the sale of Royal Mail did not result in the expected profit, how will the franchising of post offices be any different?
In June 2015, the Government sold the remaining 30% stake in Royal Mail. The fact is that taxpayers have been short-changed yet again. The Government sold the shares for far less than they were worth. The whole thing stinks and it is off the backs of my constituents and those of every Member here. We must not tolerate it. It is clear that the whole separation has been a massive mistake. The Government must bring both Royal Mail and the Post Office back into the public sector.
Gill Furniss (Sheffield, Brightside and Hillsborough) (Lab)
It is a pleasure to serve under your chairmanship this afternoon, Mr Wilson. I congratulate my hon. Friend the Member for Luton North (Kelvin Hopkins) on securing this debate and all my hon. Friends who have spoken. I pay tribute to the many postal workers and the CWU who have brought many of the issues to our attention. As constituency MPs, we are all keen to ensure that the Post Office has a long-term future for the benefit of the communities we represent, and we want to know what the Government’s plans are for making the vision of a 21st century Post Office a reality.
It has practically become a cliché to say that post offices are at the heart of our communities, but it is a cliché because it is true. From city high streets and suburbs to villages up and down the country, the local post office is a landmark and an essential part of life. It is not just a place to buy stamps and send parcels; it provides a host of services. My hon. Friends the Members for Wirral West (Margaret Greenwood) and for Merthyr Tydfil and Rhymney (Gerald Jones) pointed out that, in rural areas, they can often be the only place where some services are available. It is no exaggeration to say that they are a lifeline.
I recognise that we are living in an ever-changing, increasingly digital world in which access to services online is undermining some of the Post Office’s traditional role. That is simply a fact of the times we live in. What concerns me is that the Government have apparently accepted the challenge as insurmountable and have embarked on a programme of managed decline, instead of looking at how we can make one of our proud national institutions fit for the 21st century.
My hon. Friend the Member for Wakefield (Mary Creagh) made a good point when she said that last year 50 Crown post offices—the larger branches, usually in prominent high street locations—were franchised and moved into the back of many WHSmith shops. There are plans to do the same with 59 more this year. That may seem like a pragmatic way of keeping post offices going through trying times, but the impact of that franchising on the quality of service provided and on the terms of employment offered makes me question the underlying rationale.
When Consumer Focus, as it then was, looked at the quality of service being provided by franchised branches in WHSmith a few years ago, it found that they consistently ranked below normal post office branches for queue times, the time taken for transactions at the counter, the number of counter positions staffed, customer services and advice on products. There were also big issues with disabled access, as many have said.
The Post Office’s own monitoring suggests there is no drop in the quality of services following franchising. However, as we have never seen its monitoring figures, I take that with a pinch of salt. The consumer organisation Which? is doing its own research on the matter, which it is hoping to publish in the next few weeks and which will no doubt make interesting reading for all of us.
When looking at what happens to jobs when branches are franchised, it is not hard to see why the quality of service drops.
Neil Coyle
Is there a question here not just about poorer service, but about taxpayer-funded poorer service? The lower pay usually offered by companies such as WHSmith is subsidised by taxpayers in tax credits and housing benefit. There have also been upfront subsidies, such as the £500,000 spent in Paisley and more than £100,000 being spent on Walworth Road. Other Members have referred to taxpayers’ money being used to tart up formerly dingy post offices before they were franchised.
Gill Furniss
My hon. Friend makes a very good point. This is not what taxpayers were expecting. We were looking at something for the future—a lot of taxpayers’ money to make this the gateway to a fully functioning Post Office service. We have heard representations in the Chamber today that that has not been the case.
Jobs with good terms and conditions are being replaced all too often with part-time, minimum wage roles. There is little to attract long-serving, experienced staff to transfer to a franchised branch. My hon. Friend the Member for Luton North made the good point that last year just 10 staff out of 400 in Crown offices being franchised chose TUPE; the rest took compromise agreements to leave. Those agreements cost the Post Office £13 million. So much for the Government working for everyone. What a waste of public money. My hon. Friend the Member for Hornsey and Wood Green (Catherine West) also mentioned that experienced staff are leaving in droves. That means that the quality that the Post Office stands for is undermined and a community asset is hollowed out—and make no mistake: these are community assets.
Franchising is done in the face of public opposition. Consultations on individual branches are exercises in public relations rather than proper public engagement. The branches targeted for franchising tend to be in more urban areas, disproportionately affecting the services available to already disadvantaged groups and harming the general health of our high streets.
The Post Office is clearly facing a crisis. My hon. Friend the Member for Harrow West (Mr Thomas) has an excellent article in the Daily Mirror laying all that out today. Since the Post Office was split from Royal Mail, it has struggled to keep its head above water. Traditional revenue streams are shrinking; plans to make it a “Front Office” for Government have disappeared into the ether; and an expansion of financial services has slipped off the agenda. One thousand jobs were lost last year, and another 2,000 are under threat this year.
The Government must take action now to halt the decline, and work with all those concerned to come up with a plan for a better future than the one currently on offer. Although I welcome the consultation document that has been published, I am concerned that it does not go far enough, and I urge the Minister to be bold in formulating a strategy for the future.
Will the Minister revisit the plans to make post offices the front office for Government that has been promised for so long? Post office revenues from Government services have fallen by 40% since 2010. Will she commit to expanding the financial services on offer? After all, the Post Office current account is not matched by either the children’s or business accounts. Surely that is an obvious starting point for expanding services. With the retreat of banks from the high street, the demand for a postal bank has never been greater. Will she explore how our post offices really can be the front office of Government and provide all the services that people require?
I ask the Minister with all sincerity whether she will call for a moratorium on any further franchising of Post Office branches until there has been proper engagement on what the future of the service will look like. This proud institution, its employees and the communities that it serves deserve better than a slow slide into oblivion.
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Margot James)
It is a pleasure to serve under your chairmanship, Mr Wilson. I congratulate the hon. Member for Luton North (Kelvin Hopkins) on securing today’s very important debate on the future of the Post Office.
The Government recognise the crucial role that post offices play in communities across the country. I echo the numerous tributes that we heard in the debate to the sub-post offices and management and staff who work in the post office network, including our own excellent post offices here in the Palace of Westminster. They do a wonderful job.
Between 2010 and 2018, the Government will have provided nearly £2 billion to maintain, modernise and protect a network of at least 11,500 branches across the country. The Government set the direction for the Post Office. That means that we ask it to maintain a national network of post offices that is accessible to all, and to do so more sustainably, with less need for taxpayer subsidy over time. That includes the maintenance—this was a manifesto commitment of my party at the last election—of 3,000 rural and semi-rural branches, about which we have heard little this afternoon and which would otherwise be uneconomic to run. Post Office Ltd delivers that strategy as an independent business; we do not interfere in its day-to-day operations or decisions about the provision and location of branches.
Today, as I said, there are more than 11,600 branches in the UK and the network is at its most stable for decades—although people would not know that from the debate. That is because the Post Office is transforming and modernising its network, thanks to the investment that the Government have been willing to make. The Government support has enabled almost 7,000 branches across the UK—more than half the entire network—to be modernised, offering a better experience for customers and more sustainable retail propositions for postmasters.
Catherine West
Can the Minister explain the logic whereby a lot of public funds are put into a branch of the Crown Post Office and then it is promptly closed?
Margot James
The hon. Lady mentioned the Crouch End post office in her speech, and I made a mental note to look into that. I cannot comment on that particular branch. Occasionally in business, someone makes an investment, it does not work out and they have to cut their losses. That happens in any business. I cannot comment on the specific branch, but I will look into the matter.
Margot James
No, not for a few minutes. I have very little time and I am going to make some progress.
Customers benefit from an extra 200,000 opening hours every week and the largest Sunday retail network in the country. Indeed, the network in the constituency of the hon. Member for Luton North is in fine shape as a result of the modernisation programme. Across the 10 branches in his constituency, customers now have an additional 297 hours a week when post offices are open, with more than half his local branches open on Sundays.
The subsidy needed to sustain the network has dropped from a peak of £210 million in 2012 to just £80 million this year, and should continue to fall. The business continues to reduce its losses: it has gone from a loss of £120 million in 2012-13 to £24 million in 2015-16.
I would like to reassure my hon. Friend the Member for Yeovil (Marcus Fysh), who is not in his place now, that the number of branches is almost unchanged since 2011. In that year, there were 11,820; there are now 11,643. That is a very small difference. In fact, I would like to make the point, because I have been quite outraged by some of the comments made in the debate, that during the last Labour Government, virtually half the entire post office operation in this country was closed. Conservative Members were always outside with petitions in those days, and this Government and the coalition Government before them have stabilised the network with minimal losses. I congratulate the board, management and staff of Post Office Ltd on all they have achieved.
All that has led, of course, to customer satisfaction remaining high, at 95%. Also, the Association of Convenience Stores produced its local shop report, completely independently of the Post Office, a couple of months ago, and the post office was rated the No. 1 service on the high street. It was voted the most desired amenity by the public. People would not think that—[Interruption.]
Margot James
People would not think that from the tone and tenor of the debate this afternoon. [Interruption.]
Margot James
I will now answer a few of the points that were made. My hon. Friends the Members for The Cotswolds (Geoffrey Clifton-Brown) and for Tonbridge and Malling (Tom Tugendhat) understandably paid tribute to their Crown post offices, in Cirencester and Tonbridge respectively. I am very sorry that I am unable to join them in their campaign against franchising of their local Crown post offices, because both are currently running at a loss. For every pound that is spent in the post office in Cirencester in the constituency of my hon. Friend the Member for The Cotswolds, £1.30 has to be spent on running it. We have to be mindful of that. I say to the hon. Member for—I apologise for forgetting her constituency. [Hon. Members: “Paisley.”] I say to the hon. Member for Paisley and Renfrewshire South (Mhairi Black) that the Crown post office there was losing almost £2 for every pound that was spent. That is really why that unfortunate decision had to be made. I was sorry to hear what she had to say about the effect on some of her constituents.
Margot James
I am sorry, but I have to stop shortly to leave time for the hon. Member for Luton North.
As I said earlier, we cannot keep these Crown post offices open and losing money and stick to our commitment to keep post offices open in the rural and semi-rural areas, where often it is the only service left. Really, with some of these Crowns that are closing, walking a short distance away, sometimes to a more convenient location, to a WHSmith, is a small price for customers to pay to keep this network operating across the country, which has not proven to be economic.
Margot James
I am really sorry not to be able to give way again, but I have got to stop in two or three minutes’ time. I want to answer a couple of points made by the hon. Members for Sheffield, Brightside and Hillsborough (Gill Furniss) and for Harrow West (Mr Thomas).
Use of Government services at post offices is down by 40%, which is disappointing. I do not really foresee a huge improvement in that, because with so many Government services—for instance, on the motor vehicle front—so much is now done online that any operation in that sector would have experienced similar losses. I am much more hopeful about financial services. That sector has grown by 17% since 2012. It is steady, albeit slow, growth year on year. The Post Office has an arrangement with the Bank of Ireland and will be offering more services. Hon. Members have pointed out that bank branches around the country are closing at a swift rate, and that does create an opportunity for the Post Office. I will be lobbying, alongside Members, for the Post Office to embrace this opportunity even further, but I do think that it is doing a good job. I will sound a note of caution that unfortunately—well not unfortunately; it is just a development that we are all part of—more and more banking is now done online as well, but I do see some grounds for hope in that sector.
I want to talk a bit about WHSmith. A great many WHSmith branches are now either hosting or franchising post office services. Virtually all the services remain on offer to the public in convenient locations. I accept that some—a minority, I think, of 11 out of 61—post offices that operate in WHSmith branches are on the first floor. That does present issues for people with disabilities, but they are issues that the WHSmith branches have resolved in conjunction with local groups representing people with disabilities. They have managed to provide lifts and also, in case of lift breakdown, mobile tills so that people with disabilities can be welcomed into the branches.
Margot James
On the mutualisation that the hon. Gentleman mentioned, yes, the Postal Services Act 2011 requires that the Post Office be maintained either in public hands—public ownership—or in a mutualised setting. At the moment, it continues in public ownership and we have no plans to change that. Indeed, for it to be mutualised the model would have to be based even greater financial sustainability than it is at the moment. Currently, the Post Office is making losses and we would not be able to mutualise it, but the plan is for it to become more and more financially sustainable over time.
The hon. Member for Luton North also made the point about Royal Mail, and various Members have called for Royal Mail and the Post Office to be reunited. I do not see that happening—Royal Mail is now an independent public company—but thanks to Government investment, the Post Office is now in a far stronger position for its impending negotiations with Royal Mail about its business arrangements. That is thanks to the huge investment that we have made in Royal Mail.
Margot James
I am. Is it time for me to give way? Yes, I do apologise; I was looking at the wrong digit. I will give way now to the hon. Member for Luton North, and I apologise to him.
Kelvin Hopkins
I thank the Minister for giving way. I have very little time, but thank you for chairing the debate this afternoon, Mr Wilson. I also thank all the hon. Members who made such fine, compelling and passionate speeches this afternoon. We are all speaking with one voice. There is a serious threat to the Post Office and to its future, and it has to be rescued now by stopping the cuts. May I ask the Minister that we have a meeting to discuss these things in more depth, with the Front-Bench representatives from each of the Opposition parties and myself, to try to iron out some approach for the future? I have to say that I am rather disappointed with the Minister’s response, because she constantly talked about post offices as though they were businesses rather than public services and community assets. If they are to be made more commercially viable, the Government have got to make—
Written Statements
(7 years, 5 months ago)
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Housing Policy
(7 years, 5 months ago)
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The Minister for Housing and Planning (Gavin Barwell)
This week it was announced that almost 190,000 new homes were delivered in 2015-16, with over 30,000 of these as a direct result of “change of use”. This is welcome progress but we know that there is more we need to do. That is why we are working on a housing White Paper that will include measures to ensure more land is available in the right places, incentivise and speed up development, encourage a more diverse housing market and deliver support for ordinary working-class people.
The Government are absolutely committed to building more homes and will be making further announcements in due course.
[HCWS267]
Education, Youth, Culture and Sport Council (21/22 November)
(7 years, 5 months ago)
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The Secretary of State for Culture, Media and Sport (Karen Bradley)
The Education, Youth, Culture and Sport Council will take place in Brussels on 21 and 22 November 2016. Shan Morgan, the UK Deputy Permanent Representative to the EU, will represent the UK at the youth section of the Council. I will represent the UK at both the culture and the sport sections of the Council.
Youth
The Council will be asked to adopt draft conclusions on promoting new approaches in youth work to uncover and develop the potential of young people. The conclusions will recommend the need to promote effective and innovative cross-sectoral policies that can help young people realise their full potential. The UK intends to support the adoption of the conclusions.
The presentation will be immediately followed by a policy debate on youth engagement.
Culture
The Council is expected to present a progress report on the proposals for the revised audiovisual media services directive. The audiovisual media services directive seeks to ensure the effective operation of the internal market for television broadcasting services by ensuring the free movement of broadcasting services throughout the EU.
This will be followed by first reading on the proposal for a European year of cultural heritage (2018). The objective of this initiative is to raise awareness of the opportunities that cultural heritage bring, mainly in terms of intercultural dialogue, social cohesion and economic growth. At the same time, the European year aims at drawing attention to the challenges that cultural heritage is facing, including environmental and physical pressure on heritage sites and illicit trafficking of cultural objects. The UK intends to support this proposal.
The Council will then be invited to adopt a proposal to amend the European capitals of culture for the years 2020 to 2033 to extend access to EFTA/EEA countries. The UK Government are supportive of this proposal.
Finally there will be a public debate, “towards an EU strategy for international cultural relations”. This will discuss how the EU and its member states can co-operate to bring about a more strategic approach to culture in external relations.
Sport
The Council will seek adoption of its draft conclusions on sport diplomacy. The conclusions will acknowledge that sport is a possible tool in supporting intercultural, economic and political co-operation, and that its potential can be part of extending and strengthening contacts between the EU and third countries. The UK intends to support the adoption of these conclusions.
This will be followed by a public debate on the impact of sport on personal development. The UK intervention will be to demonstrate the work the UK is already carrying out in this area through participation, Olympic legacy and the sport strategy.
Other business
The French delegation will present information on reform of the European copyright framework. This will be followed by the Croatian and Irish delegations on the European capitals of culture 2020. The Italian delegation will then present information on “Facing crisis in Europe: Investing in Culture”.
The Council will also be presented with information on the World Anti-Doping Agency (WADA) meeting in Glasgow (19-20 November). This information will be provided by the EU member states representatives in WADA: Belgium, UK and Malta. This will be followed by the French delegation on development and specific features of the organisation of European sport. Finally there will be information from the Maltese delegation on the work programme of their incoming presidency.
[HCWS264]
NHS Professionals Ltd
(7 years, 5 months ago)
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The Minister of State, Department of Health (Mr Philip Dunne)
My noble Friend the Parliamentary Under-Secretary of State for Health (Lord Prior of Brampton) has made the following written statement:
I am today updating the House on the future of NHS Professionals Ltd (“the Company”).
The Company was set up as a limited company fully owned by the Secretary of State for Health in 2010. While it is the largest single supplier of flexible staffing to the national health service, with a bank of over 90,000 workers providing more than 2 million shifts every year, it currently works with only around a quarter of NHS trusts.
The Department of Health has therefore concluded that the Company requires significant investment to enable it to expand, so it can deliver improved services to even more NHS trusts and reduce their reliance on expensive agency staff—the bill for which is currently £3 billion annually, which diverts resources that could be better used for substantive staffing and improved patient care.
At the moment the Company works with 55 NHS trusts. As the largest provider of bank staff to the NHS, the Company is in a prime position to respond to the NHS’s need for more cost-effective and better planned temporary staffing. It currently saves the NHS approximately £70 million a year by supplying bank staff to hospitals which are more affordable than those staff supplied by expensive agencies. We want to see the Company take advantage of this opportunity to expand its business, acting as a true alternative to expensive agencies. But the Company cannot do this without substantial investment to improve the services it offers.
Over the last year the Department has therefore been exploring a range of potential options to help the Company drive further value for the NHS.
Today I can announce that, following market analysis and a thorough appraisal of a business case, the Department’s preferred option is to create a joint venture partnership to bring in the necessary investment and expertise to the business and give the Company greater operational autonomy. The Department will sell a majority shareholding so that the Company is run and controlled by the new partner, which will carry the majority of the finance and operating risks of the business.
Contractual mechanisms will be used to ensure that the dual aims of creating a profitable business model while meeting the needs of NHS customers—delivering savings and a high-quality service—are correctly aligned and fully agreed upon.
The Department’s retention of a minority shareholding will also ensure there are no significant changes to the agreed purpose and/or objectives of the Company. This is backed up by the right to take back ownership of the Company in the event of any serious breach of the agreed main objectives.
A tendering process to find the right partner is being launched through an advert in the Official Journal of the European Union (OJEU). Potential investors will be subject to detailed evaluation to ensure value for money to the Government.
There will be no immediate impact on the approximately 600 corporate staff who are employed by the Company. The Company’s bank workers will also continue to book and work shifts for NHS trusts as usual.
[HCWS265]
Department for International Trade (Non-executive Board Members)
(7 years, 5 months ago)
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The Secretary of State for International Trade and President of the Board of Trade (Dr Liam Fox)
I wish to update the House on the appointment of non-executive board members (NEBMs) at the Department for International Trade.
I am pleased to announce to the House that three independent NEBMs have been appointed to sit on our departmental board. A further NEBM has been appointed as chair of the board for UK Export Finance, who will also sit on our departmental board.
Those NEBMs are:
Mr Simon Walker, outgoing director-general of the Institute of Directors, as lead non-executive board member and also chair of the Nominations Committee.
Ms Julie Currie, chief financial and reporting officer at the Lloyds Bank Foundation, who alongside her duties as a non-executive board member will chair the Audit and Risk Committee.
Dr Pippa Malmgren, founder of DRPM Group, a respected political analyst with trade policy experience who will act as a non-executive board member.
Ms Noel Harwerth, current chair of GE Capital Bank Europe, who will join the UK Export Finance Board as chair, and will also be a NEBM on the DIT departmental board.
This is a significant milestone for our Department and I am proud of the talent and expertise represented on the board. Our NEBMs’ extensive business knowledge and experience of global trade and corporate governance will be of huge value to me and the Government as we shape the Department and forge the UK’s trade agenda and promote the UK as a place to do business with.
The new board members will work closely with me, my ministerial team and the executive team to provide independent scrutiny and advice and to assist the Department in delivering our priorities, which include an effective long-term strategy for the UK’s trade policy; promotion of UK exports; inward and outward investment; take-up of UK export finance; and promotion of the UK through the GREAT campaign. They will also advise on performance and the effective management of the Department.
These appointments come at the end of a highly competitive process. We launched our search for NEBMs in July through advertisements on the Centre for Public Appointments and Women on Boards websites. We received 181 applications, including exceptionally well-qualified individuals from a wide range of backgrounds, demonstrating the high level of interest there is in international trade.
[HCWS263]
Housing Benefit and Universal Credit
(7 years, 5 months ago)
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The Parliamentary Under-Secretary of State for Welfare Delivery (Caroline Nokes)
Following the recent Supreme Court judgments relating to the removal of the spare room subsidy, and to ensure the facts of the cases are fully understood, I would draw colleagues’ attention to the following entry in Hansard:
https://hansard.parliament.uk/commons/2016-11-14/debates/D5D5E72C-3772-46E6-8A4F-15A8F8EBA19A/Under-OccupancyCharge
[HCWS266]
House of Lords
(7 years, 5 months ago)
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Roads: Drink-drive Limit
(7 years, 5 months ago)
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Baroness Jones of Moulsecoomb
To ask Her Majesty’s Government whether they are planning to lower the drink-drive limit in England and Wales.
The Parliamentary Under-Secretary of State, Department for Transport (Lord Ahmad of Wimbledon) (Con)
My Lords, the Government have no plans to lower the drink-drive limit in England and Wales. Our approach in tackling drink-driving is through rigorous enforcement, tough penalties and changing the social acceptability of drink-driving, including through our award-winning THINK! campaigns.
Baroness Jones of Moulsecoomb (GP)
My Lords, I thank the Minister for his reply, but the RAC Foundation said last year that 25 lives would have been saved if the limit had been lowered. Police Scotland is about to produce a report on its two-year trial. If the report suggests similar findings, will the Government use that evidence to reduce the limit at the next available opportunity?
Lord Ahmad of Wimbledon
We are certainly watching the situation, and the noble Baroness is quite right to raise the issue about Scotland, where the limit has been lowered. We have previously said—indeed, I have said from this Dispatch Box—that we will look at the evidence that is presented from the programme that was initiated in Scotland, we will reflect on that evidence and the experience there and then take forward any reviews that we need to. But let me make it absolutely clear: we currently have no reviews planned; we are not looking to review the limit as it stands.
Lord Vinson (Con)
I am glad to hear that the Minister is resisting pressure to drop the limit further—I think the limit at the moment is well accepted. He will know that most accidents are, in fact, caused by people who are well over the limit and who are likely to ignore any limit. There is another basic reason for not dropping it further, and that is that the social life of rural people would be hugely damaged and it would be the death knell of the rural pub. It is so important that people are able to have a reasonable level of drinking and are able to go out to do so. To destroy that sociability in rural areas—which a lower limit would certainly do—would be a grave mistake.
Lord Ahmad of Wimbledon
My noble friend is quite right, and evidence suggests that the programme that the Government currently undertake—emphasising the importance of education—through the THINK! campaign that I alluded to, which is now celebrating more than three decades of implementation, has resulted in responsible attitudes towards drinking and driving. Of course, the general advice is, if you have a drink, resist driving and make alternative arrangements. Before reviewing anything, we need to look at the evidence base. When you look at our record here in England and Wales compared to the rest of Europe, we actually have one of the best road safety records in the whole of the continent.
Lord Palmer (CB)
My Lords, I very much take the point made by the noble Lord, Lord Vinson. I live 10 miles into Scotland myself and I was in fact breathalysed at 10.30 am the other day. Much to everybody’s amazement, I did in fact pass. But is it not madness that there is a different limit in Scotland from that in England and Wales?
Lord Ahmad of Wimbledon
I am glad to hear that the noble Lord passed the test. I think that the important issue is that there are certain powers that have been devolved and, in that respect, the Scottish Government took a decision to lower the limit. As I have said already, we are looking at the evidence produced from the lowering of that limit but, at the current time, there are no plans to review the limit in England and Wales.
Lord Mackenzie of Framwellgate (Non-Afl)
Does the Minister agree that the rollout of drug-detection devices on the roadside illustrates the amount of misuse of recreational drugs and the danger that this can bring to innocent road users, whether they be cyclists, motorists or, indeed, pedestrians?
Lord Ahmad of Wimbledon
The noble Lord is right to point out that new drug-driving laws have been introduced. The statistics show that, in 2014, there were about 850 prosecutions. On current estimates, that will rise to about 7,000 by the end of this year. A mixture of measures have been introduced ensuring that laws have been reviewed, education has been increased and enforcement has been applied to ensure that, when someone is found to be over the drink-driving or drug-driving limit, the correct penalties are imposed.
Baroness Berridge (Con)
My Lords, as of next year, there will be a different limit not just in Scotland but also in Northern Ireland. Therefore, will my noble friend please outline whether there are any plans to have a United Kingdom-wide public information campaign to ensure that people know that in different parts of the kingdom there are different laws on drink-driving? What consultation has taken place with victims’ groups, because victims of accidents may find that the criminal law takes action against a driver in one part of the country but not in another for very similar behaviour?
Lord Ahmad of Wimbledon
My noble friend is right to point to the importance of information and education, to which I have already alluded. As regards consultation and review, I am happy to arrange a briefing session for interested Peers with my honourable friend the Minister for Roads and with experts in this area. I assure noble Lords that this is a government priority. However, we feel that we have the correct balance as regards the limit, enforcement and education. That has resulted in one of the best road safety records in the whole of the continent.
Baroness McIntosh of Hudnall (Lab)
My Lords, what is the difference between the severity of fines and so forth available in respect of mobile phone use and drink-driving respectively, whether or not an accident has ensued? Does the Minister agree that the level of distraction and loss of concentration resulting from the use of mobile phones is probably equivalent to several units of drink?
Lord Ahmad of Wimbledon
The noble Baroness is right to point to this concern. Indeed, recently we have, regrettably, seen the effects of people driving while being distracted by the use of mobile phones. The Government are looking at that area very seriously and are looking at strengthening the penalties against using mobile phones while driving. This is another important area of road safety which the Government take very seriously.
Baroness Janke (LD)
My Lords, have the Government considered giving more powers to local authorities and combined authorities to look at the whole business of drink-driving as part of an anti-alcohol policy, and to reduce some of the damage caused by excessive alcohol use in their areas?
Lord Ahmad of Wimbledon
I know from my own experience of serving on a local authority that local authorities play an important role in the provision of education and information on campaigns such as the THINK! campaign. I know that many local authorities are directly engaged with that, and it works well. If the noble Baroness has other practical suggestions, I would be happy to reflect on them.
Baroness Finlay of Llandaff (CB)
My Lords, given the Government’s commitment to look at the evidence, when they look at the two-year evidence from Scotland, will they consider the impairment of reaction times related not just to alcohol intake but to age? The reaction times of some older people are more impaired than those of some younger people. Will they also look at the death rate among the under-25s?
Lord Ahmad of Wimbledon
I know that the noble Baroness has great experience in this regard from the medical perspective, and I assure her that the Government will take full account of all the evidence that is available. Whenever we look at this area, I will certainly ensure that we look at the number of prosecutions and fatalities, as well as their causes, across the country. We are happy to look at all evidence when considering this issue.
Living Home Standard
(7 years, 5 months ago)
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Lord Kennedy of Southwark
To ask Her Majesty’s Government what assessment they have made of the Living Home Standard.
Lord Kennedy of Southwark (Lab)
My Lords, I beg leave to ask the Question standing in my name on the Order Paper and, in doing so, declare that I am an elected councillor of the London Borough of Lewisham and a vice-president of the Local Government Association.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)
My Lords, good-quality housing is an absolute priority for this Government. Shelter is a valued partner in this area and we welcome its contribution to the debate. The figures quoted in Shelter’s report are of course based on the perceptions of those surveyed rather than the actual standards in people’s homes.
Lord Kennedy of Southwark
My Lords, I read with interest in Inside Housing this week that several meetings of the DCLG had been cancelled, including those of the “pay to stay” working group, and I hope that it never meets again. Rather than following the divisive measures in the Housing and Planning Act, we need to get on and build thousands and thousands of homes of all tenures. Does the noble Lord agree that affordability is a huge problem and that we need to reduce the cost of housing in the long term? Does he also agree that, if we are to deliver on the Government’s housing commitments, there must be a big increase in the number of council homes at truly affordable social rents?
Lord Bourne of Aberystwyth
My Lords, I am very pleased that the noble Lord welcomes the measures that we have taken in relation to “pay to stay”. I assure him that the measures against rogue landlords in the Housing and Planning Act were welcomed by Shelter. I will be reporting him to Shelter because it is very pleased with the measures in that regard.
Lord Alton of Liverpool (CB)
My Lords, the noble Lord rightly said that the 39 attributes of Shelter’s Living Home Standard are a useful benchmark against which to measure perceptions about the housing stock in Britain. However, will he give the House—if not today then in writing subsequently—details of the number of homes in Britain that are formally sub-standard, the number that are still not properly insulated and the number that still have no inside sanitation in the way of running hot water or bathrooms?
Lord Bourne of Aberystwyth
My Lords, the noble Lord is right to concentrate on what is important in relation to the standard of homes. I can tell him that in 2014 20% of homes were regarded as below standard by the English Housing Survey, which is the recognised gold standard. That is a considerable improvement on the position in 2006, when, using the same measure, the figure was 35%.
Lord Palmer of Childs Hill (LD)
My Lords, I was disturbed to hear the Minister say that the figures are regarded as based on only perceptions. Can he tell the House what steps the Government are taking to increase the number of houses that meet what is often a very minimum standard?
Lord Bourne of Aberystwyth
My Lords, as I have just indicated, there was a considerable improvement from 2006 to 2014, including the period when the noble Lord’s party was part of the coalition. We will obviously keep this matter under review. New measures were introduced in the 2016 Act to tighten up the battery of powers that are available, but the prime powers relating to property in the private rented sector are contained in the Housing Act 2004, and very useful tools they are too.
Lord Naseby (Con)
Did my noble friend manage to read the Financial Times earlier this week, which said:
“Housebuilding has risen to its highest level for eight years, bringing the UK government’s target of 1m new homes by 2020 within reach”?
Is that not exceedingly good news?
Lord Bourne of Aberystwyth
My Lords, to paraphrase Kipling cakes, it was exceedingly good news. It is true that there is more to do, as the Government have readily acknowledged. This area has been recognised as a key priority for the Prime Minister and that is reflected in the attitude taken by the department. Of course, we are anticipating a forthcoming housing White Paper, which will again stress the importance of housing as a key priority.
Lord Watts (Lab)
My Lords, do we not need far better and more effective policing of our housing, including better inspection and enforcement? Is not that the way to get the houses up to a decent standard?
Lord Bourne of Aberystwyth
My Lords, of course enforcement of the existing powers is important. The Government have made available £12 million since 2011 to help local authorities enforce action against rogue landlords. This includes raids, inspections and actions against beds in sheds.
Baroness Uddin (Non-Afl)
My Lords, I note what the Minister said about Shelter perhaps not getting it exactly right. I declare a past interest, having been a councillor, and I think that Shelter is considerably undermarking the levels of disgraceful housing conditions across the country. What is the Minister doing to ensure that not only local authorities but the housing associations that are building many of these properties have a consistent standard?
Lord Bourne of Aberystwyth
My Lords, the noble Baroness is right to re-emphasise the importance of housing standards. The social sector is subject to a slightly different regime, in which standards apply. As I have indicated, we have provided more money for raids and inspections, and the measures in the Housing and Planning Act that will be brought into force next year will tighten up the position in relation to rogue landlords.
Baroness Gardner of Parkes (Con)
My Lords, is not it necessary for councils to make some sort of charge in order to inspect a property? All councils are very hard pushed for money and find it extremely difficult to carry out the necessary inspections.
Lord Bourne of Aberystwyth
My Lords, I have referred to the £12 million that the Government have made available. I have looked at the evidence to see whether local authorities are making use of that in relation to raids and inspections, and they are. In addition, a database of rogue landlords will be brought in next year following the 2016 Act.
The Earl of Listowel (CB)
My Lords, in considering the White Paper, will the Minister keep to the forefront of his mind the importance to families of having stable, not overly crowded accommodation, bearing in mind the risk of family breakdown, of mothers and fathers separating, and the terrible impact that can have on their children?
Lord Bourne of Aberystwyth
My Lords, the noble Lord is absolutely right to stress the importance of that. Local authorities have existing powers under the Housing Act 2004 relating to the overcrowding of houses.
Public Contracts: Conflicts of Interest
(7 years, 5 months ago)
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Lord Berkeley
To ask Her Majesty’s Government what are their policies on conflicts of interest in respect of contracts with public and private organisations which provide or deliver public services or projects; and where those policies are made publicly available.
Baroness Chisholm of Owlpen (Con)
My Lords, public sector procurers are required to seek value for money through competition that is fair, open and transparent. Rules on addressing conflicts of interest are set out in the Public Contracts Regulations 2015, which make clear that contracting authorities should put in place measures to avoid any distortion of competition and to ensure equal treatment to all bidders.
Lord Berkeley (Lab)
I am grateful to the Minister for that reply. There are a number of conflict of interest issues around at the moment, but the one that I would like to mention is about HS2. The very eminent company CH2M has been project managing the work for the past few years. This year, it was awarded a further £360 million contract as a “delivery partner” and, more recently, it supplied the interim CEO for HS2. In a Written Answer I got from the noble Lord, Lord Ahmad, who I am pleased to see is in his seat, he said that the conflict of interest had been cleared by an internal panel and that the names of the members of the panel were confidential. This is a £50 billion contract. Surely there needs to be independent scrutiny and transparency about the process. There is always a risk that even a partner can screw the Government. I suggest that the solution that the noble Lord the Minister has given us is not sufficient and needs greatly strengthening.
Baroness Chisholm of Owlpen
My Lords, there were lots of questions there. HS2 Ltd follows recruitment practices that are similar to those followed in Civil Service appointments and are made through open and fair competition. The short-term services of the interim CEO have been obtained to fill the gap until those fair and open procedures for the permanent appointment can be completed. The interim CEO is not an employee of HS2 Ltd, so it would not be appropriate to follow a recruitment process for such an appointment.
To quickly cover the noble Lord’s point about not being open regarding the people on the panel, as my noble friend Lord Ahmad said—indeed, I wonder why my noble friend is not standing here instead of me—in his previous Answer:
“It is not possible to provide the names of HS2 Ltd’s Conflict of Interest Panel Members, nor details of specific cases which have been heard as we do not consider doing so would be consistent with the Data Protection Act 1998 (DPA). Unfair disclosure of personal data is a breach of the First Data Protection Principles under the DPA”.
Lord Tyler (LD)
My Lords, given the commitment to transparency that the noble Baroness has just referred to, presumably she still endorses the view that sunlight is the best disinfectant. Will she look again at the issue of the freedom of information legislation, which of course does not extend to those private companies that provide or deliver public services? Given that the taxpayer pays a huge sum to these organisations, is it not right that the taxpayer should be able to see, through freedom of information access, exactly what their money is spent on?
Baroness Chisholm of Owlpen
Obviously, these appointments are the responsibility of each department, and each department follows the Civil Service Code, which sets out the process for dealing with any possible breaches. Essentially, cases are dealt with by the department according to its own processes and can ultimately be referred to the Civil Service Commission to investigate. The propriety and ethics team can give general advice on the application of the code.
Baroness Hayter of Kentish Town (Lab)
My Lords, of course data protection does not prevent the people on that conflict of interest committee being willing to have their names released, so will the Minister tell us whether they can be asked to release their names? Will she also comment on the other big conflict of interest, which is the revolving door? The committee that looks at this for ministerial and civil servant retirees has never turned down any of those appointments, many of whom then turn up on exactly these committees but technically have no conflict of interest. Will she agree to review the terms of reference of that committee?
Baroness Chisholm of Owlpen
I do not think that I can go further than what I said about the Data Protection Act. As far as public appointments are concerned, we need to remember that there is a Commissioner for Public Appointments. Appointments come under the remit of that commissioner and they are made using the process from the commissioner’s Code of Practice for Ministerial Appointments to Public Bodies. This is a strong code of practice and it is backed up by the regulations under the Act—the Public Contracts Regulations 2015—which set out the requirement to take,
“appropriate measures to effectively prevent, identify and remedy conflicts of interest arising in the conduct of procurement procedures so as to avoid any distortion of competition and to ensure equal treatment of all economic operators”.
Lord Foulkes of Cumnock (Lab)
My Lords, is the Minister aware that, when I raised the issue of a potential conflict of interest of an education Minister also being a director of an academy trust, I was told that that was allowed under the Ministerial Code? Does that not indicate that the Ministerial Code needs revision?
Baroness Chisholm of Owlpen
As long as the Ministerial Code is closely adhered to, along with the regulations, everything should be in order as far as appointments are concerned.
Lord Wallace of Saltaire (LD)
My Lords, does the Minister recognise that the distrust of public service that public interest economics has left many Conservatives feeling has led to an overdependence on outside consultants and interlocking bodies, to which successive Governments have paid a great deal of money over the last few years? The worry that this Question reflects is exactly about the extent to which overdependence on outside consultants, who have their own self-interests to protect and defend, needs much greater examination than it currently gets.
Baroness Chisholm of Owlpen
Again, with the regulations and the code of practice this should work well and all the boxes are ticked. We want to make sure that this Government are successful in public procurement and to that end the best way is to make sure that companies adhere to the regulations and the code of practice so that they can move forward. We must make sure that we are helping industries in this country get involved in public procurement.
Footpaths
(7 years, 5 months ago)
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Lord Greaves
To ask Her Majesty’s Government, in the light of the results of the survey published by the Ramblers on 14 November, what steps they are taking to ensure that the footpath network is well kept and available for public use.
Lord Greaves (LD)
My Lords, I beg leave to ask the Question standing in my name on the Order Paper and I remind the House of my interests as set out in the register.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Gardiner of Kimble) (Con)
My Lords, responsibility for the management and maintenance of the 118,000 miles of public rights of way in England lies with local authorities. The Government have allocated central funds for the establishment of the 2,700-mile England Coast Path. We have also provided funding for the maintenance of national trails and national parks where the Ramblers’ survey recognises that rights of way are in a better condition than elsewhere in the country.
Lord Greaves
My Lords, we undoubtedly have the best network of footpaths in the countryside of any country in the world. Does the Minister agree that the work of all the volunteers for the Ramblers on the Big Pathwatch campaign and survey has been extremely valuable? However, the survey showed that one-third of the network was in need of improvement and that 10% of the footpaths surveyed were impossible to use because of barbed wire, obstructions, locked gates—
Lord Greaves
I am not sure about Japanese knotweed on public footpaths, although no doubt Ramblers will report it if it is there. I am not sure that I am supposed to take interventions on Questions, either.
Also, there are issues with signposts that either do not exist or point in the wrong direction, as well as paths that become quagmires. The footpath network is resilient but there are increasing signs of problems in many areas. What are the Government doing about it?
Lord Gardiner of Kimble
My Lords, first I acknowledge the tenacity of the noble Lord on this matter and on the matter of Japanese knotweed; I very much enjoy our exchanges. I acknowledge the work of Ramblers and all its volunteers. This excellent report says that nowhere is the network broken and that problems are highly localised. In fact, 91% of paths are “adequately”—some requiring improvement—or “well” kept. I will be in touch with the chief executive of Ramblers, Vanessa Griffiths, because I want to explore with her where the 9% of paths are that are poorly kept, and why.
Viscount Hailsham (Con)
My Lords, I must declare a personal interest; I have footpaths over my regrettably modest landholding which I hope are available to the public and well maintained, as they should be. But perhaps I may mention the problem of diversion. Very often diversion is justified but very difficult to achieve. Can my noble friend look at that problem as well?
Lord Gardiner of Kimble
My Lords, perhaps I, too, should declare that there are footpaths across my land. I checked with the Open Spaces Society and I am relieved to say that they are all open. More seriously, the stakeholder working group has produced a finely balanced package of recommendations. We are working on those to deal with the precise point raised by my noble friend. We want to present our work in one go because this is very much a package of recommendations. I hope to bring it forward but I am not in a position to say precisely when.
Lord Clark of Windermere (Lab)
My Lords, does the Minister appreciate that one of the problems in, for example, the Lake District National Park, is the illegal use of public footpaths and bridleways by motorised vehicles and motorcycles? Can the Government raise and discuss this not only with Ramblers, but indeed with the Lake District National Park Authority and Cumbria Police, because this is a question of legality and so the police are involved?
Lord Gardiner of Kimble
My Lords, I have considerable sympathy with what the noble Lord has said and will raise it in my quite regular discussions with the national parks. So many issues of this kind are best dealt with at local level—by local authorities or the national park authority—so that we can bear down on the unacceptable use of these wonderful rights of way.
Lord Robathan (Con)
My Lords, perhaps I may reinforce the comments made by the noble Lord, Lord Greaves, about local authorities and landowners needing to keep footpaths open—but is this not avoiding the real problem, which is that our excellent footpath network is underused? We must encourage young people and schoolchildren in particular to get out and walk on footpaths, which might do something to get rid of the appalling levels of obesity and fat children in this country.
Lord Gardiner of Kimble
My Lords, the Ramblers report rightly highlights the importance to our well-being, both physical and mental, of walking and enjoying such paths. One interesting comment in the report was that the problem was not so much the bull in the field as the undergrowth. That suggests to me that some paths are not used as regularly as they should be. The Ramblers report has highlighted the work that we need to do to encourage more people to walk in the countryside.
Baroness Jones of Whitchurch (Lab)
My Lords, I do not have any footpaths to declare across any of my land. Does the Minister recognise that private landowners could do far more to keep public rights of way clear of obstruction by repairing stiles and maintaining signposting? The Ramblers report shows that the paths owned by the National Trust and the national parks tend to be well maintained but the rest less so. What are the Government doing to raise the game so that there is a consistently high standard across all types of tenure, including private land?
Lord Gardiner of Kimble
I should say in declaring an interest that part of the cross-compliance arrangements that we as farmers and landowners have is precisely in the matter of keeping paths open. If we did not, we would not be adhering to those arrangements. What the report shows—I welcome the tone of what the Ramblers have suggested—is that we need to work together in partnership to get those 9% of footpaths open and better available. It is an overwhelmingly positive report about how partnership will make sure that all paths are in good condition by 2020.
Baroness Pinnock (LD)
My Lords, in my part of West Yorkshire there are 37 miles of public rights of way. In 2010, there were eight members of staff and a budget of some £250,000 to maintain them; today, there is one member of staff and no budget. Deterioration is therefore inevitable. Will the Minister explain how those paths can be kept open?
Lord Gardiner of Kimble
My Lords, it is interesting that the Ramblers report stated:
“The condition of paths varies across the country, but the picture is complex. Many local factors contribute and budget cuts alone do not explain why the path network is better maintained in some places than in others”.
Partnership with volunteers and local authorities is what works best. That is what I will encourage in my discussions. Of the 118,000 miles of rights of way, I very much hope that the noble Baroness’s 37 will be in good repair as well.
Chagos Islands
(7 years, 5 months ago)
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The Minister of State, Ministry of Defence (Earl Howe) (Con)
My Lords, I shall now repeat in the form of a Statement the Answer to an Urgent Question tabled in another place on the Chagos Islands and the British Indian Ocean Territory. The Answer was as follows:
“The islands of the Chagos Archipelago have been British territory since 1814, when they were ceded to Britain by France. In 1966, the UK agreed with the United States to make the British Indian Ocean Territory available for the defence purposes of the US and the UK, and the Chagossian people were removed from the islands.
Like successive Governments before them, this Government have expressed their sincere regret about the manner in which Chagossians were removed from British Indian Ocean Territory in the late 1960s and indeed the early 1970s. It is right that the UK Government should have paid substantial compensation to Chagossians—nearly £15.5 million in current prices. The British courts and the European Court of Human Rights have confirmed that compensation has already been paid in full and final settlement.
We must, however, now look forward, not back, on decisions about the future of the British Indian Ocean Territory. The Government have considered this complex issue very closely, including with an independent feasibility study of the practicalities of resettlement and a public consultation, which sought to better gauge the demand for resettlement by illustrating the most realistic way in which resettlement would hypothetically take place.
The Government have looked carefully at the practicalities of setting up a small, remote community on low-lying islands and the challenges it would face. We were particularly concerned about the difficulty of establishing modern public services; about the limited healthcare and education that it would be possible to provide, which would be difficult for any new population, and especially for elderly Chagossians returning to the islands; and there would also be a lack of realistic economic opportunities. The Government have now considered all the available information and decided against resettlement of the Chagossian people, on the grounds of feasibility, defence and security interests, and the cost to the British taxpayer.
While we have ruled out resettlement, the Government are determined to address the aspirations of Chagossians that drove them to seek to resettle: for instance, the desire for better lives and to maintain a connection with the territory. In order to meet those aspirations, the Government are creating a significant and ambitious support programme to provide Chagossians with better life chances and are developing an increased visits programme. The British Government intend to liaise with Chagossian communities in the UK and overseas and to work closely with the Governments involved to develop cost-effective programmes which will make the biggest improvement in the life chances of those Chagossians who need it most”.
My Lords, that concludes the Statement.
Lord Collins of Highbury (Lab)
My Lords, I thank the Minister for repeating the Statement. Yesterday’s decision is nothing less than a fundamental denial of the human rights of the people of the Chagos Islands. Their hopes were raised with the publication of the KPMG report about feasibility and those hopes and aspirations have, I fear, been cruelly dashed. On the issue of feasibility, will the Minister give us and the people of the Chagos Islands some indication of what factors were taken into account? Will he publish all the factors that were considered in reaching this decision, in order to ensure that there is full transparency?
Turning to the £40 million that has been promised over 10 years, the Minister indicated that communities would be consulted. Can he give further guarantees about how the people of the Chagos Islands will be involved in spending that money? In particular, what proportion will be devoted to ensuring that they can return to their homes—I find it difficult to use the term “visit”? Finally, what assessment has been made by the Government of the impact this decision will have on other overseas territories, particularly Gibraltar, which are feeling very fragile at the moment in light of the decision to withdraw from the EU? I hope that the noble Earl will be able to respond to these points.
Earl Howe
My Lords, I am grateful to the noble Lord, Lord Collins. Clearly, we know that this decision will come as a disappointment to the many Chagossians who have expressed a desire to resettle. We recognise their emotional links to the island and their desire to go back to their former way of life. The manner in which the Chagossians were removed in the late 1960s and early 1970s was wrong; it should not have happened. We look back on that period with sincere regret, but we cannot turn back the clock. We have to be realistic about the challenges that a resettled community would face.
The factors that we took into account were many and various, including those cited in the KPMG report. We considered what could be done to respond to Chagossian aspirations, but the main factors were the potentially high and very uncertain costs, the long-term liabilities for the UK taxpayer and security considerations.
As regards the £40 million, we wish to work with the Chagossian communities and the Governments of Mauritius and the Seychelles to understand the challenges and to develop cost-effective programmes which will make the biggest improvement in the life chances of those Chagossians who need it most. The door is very definitely open to those conversations. As regards the impact on other overseas territories, I do not believe there are any. This is a unique situation.
Lord Wallace of Saltaire (LD)
My Lords, the Government have established a large and very impressive marine conservation zone around the BIOT. There have been some suggestions that that needs policing and that therefore there are jobs for Chagossians who might not just visit but work on the islands. How do the Government intend that that marine conservation zone should be policed against the many fishing fleets that would like to use it? Have we consulted with the Americans about this, and do we expect the Americans to be on the Chagos Islands for the foreseeable future—for the next generation? If we are talking about the future, how are we planning for the long term?
Earl Howe
My Lords, what has happened is a rollover of the current agreement, which had a break clause at the end of 2016. By not breaking silence, as it is officially termed, we are allowing that rollover to take place for the next 20 years. We declared the marine protected area that the noble Lord referred to in 2010. It is highly valued by scientists from many countries. They consider it a global reference site for marine conservation in an ocean that is already heavily overfished. We are aware that some concerns have been raised about the motives for the creation of the marine protected area; in other words, that it might have been designed to thwart future resettlement. I categorically repudiate that suggestion. We are very serious about conserving that area. Unfortunately, I am not aware of any employment prospects that could arise from this.
Lord Ramsbotham (CB)
My Lords, I declare an interest as vice-chairman of the All-Party Group on the Chagos Islands. If the United States Government say—and have said for a long time—that they are not opposed to resettlement and that the security concerns can be easily managed, what security concerns do the United Kingdom Government have that overrule and override the American Government’s decision, which was repeated as recently as earlier this year when President Obama had discussions with the then Prime Minister?
Earl Howe
My Lords, it is important to understand that security was not the only consideration that governed the decision that has been made. There are no restrictions on applications by Chagossians to be employed on Diego Garcia. The United States has said that it is committed to hiring qualified candidates as positions become available. Indeed, the contractor is required to recruit people from Mauritius and the Seychelles, provided they meet the necessary requirements. We are aware that some Chagossians have been offered positions working for the US contractor on Diego Garcia over the past two years, but these were declined because of local conditions, which are pretty basic, and the rates of pay.
Baroness Whitaker (Lab)
Members of the all-party group, of which I am one, are extremely grateful to all three Ministers for appearing at our meeting yesterday. However, we remain very surprised at the intemperate haste with which the Statement was rushed out before the meeting, when it had been planned for the end of the year. Bearing in mind that respected analysts have estimated that the cost of resettlement would be about £20 million—half of what the Government propose in the Statement for additional compensation—what conditions will Her Majesty’s Government now consider attaching to the renewal of the agreement with the Americans over the base, in the interests of justice and international human rights law?
Earl Howe
My Lords, I can only say that we very much regret that the timing of the meeting with the all-party group coincided with the Government’s decision. It would have been improper to have come to that meeting pretending that no decision had been made when in fact it had. As the noble Baroness knows, attempts were made to have the meeting earlier than yesterday, but that did not fit one or both sides.
As regards the costs of resettlement, they were set out with a big health warning by KPMG which said that the costs could vary by up to 50% more than it had estimated. I am aware that the noble Baroness has submitted a paper to my noble friend Lord Bates, and he will be writing to her in response as soon as possible.
Baroness Northover (LD)
My Lords, yesterday’s Written Statement states:
“The Government has also considered the interaction of any potential community with the US Naval Support Facility”.—[Official Report, Commons, 16/11/16; col. 11WS.]
Were the Americans consulted on this decision? The Minister has expressed regret about the original decision, so how can the interests that determined the original decision be reflected in this decision?
Earl Howe
My Lords, we consulted a number of stakeholders, including the Americans. We then considered the findings from that process and from the KPMG report. We then commissioned a study to refine the assumptions in the KPMG report and conducted a public consultation to which a number of Chagossians—there were not very many, about 844 people—replied. The decision was taken not in haste but on the basis of close analysis of all the considerations.
Strathclyde Review
(7 years, 5 months ago)
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The Lord Privy Seal (Baroness Evans of Bowes Park) (Con)
My Lords, I would like to make a Statement on the Government’s response to my noble friend Lord Strathclyde’s review into secondary legislation and the primacy of the House of Commons. The Government will publish their response to his review shortly and write to the Select Committees which have reported on the issue. As there has been media speculation this morning, I am making a Statement now because I know that this is an important issue for your Lordships’ House and I want to be clear about the Government’s position.
Noble Lords will recall that the former Prime Minister commissioned my noble friend Lord Strathclyde to undertake a review following the decision by the House of Lords to withhold agreement to a tax credits SI. Underpinning that decision and, indeed, the subsequent work of my noble friend’s review, was the desire to strike the right balance between recognising and upholding the vital role this House plays in scrutinising legislation and ensuring that the elected House has the final say, for while that is clear on primary legislation, where the Parliament Acts provide for the will of the other place to prevail, there is no such mechanism for secondary legislation.
I would like to thank my noble friend Lord Strathclyde and his panel of experts for undertaking the review and producing a comprehensive and balanced report. In his report, my noble friend considered three options for securing the primacy of the elected House in relation to statutory instruments, recommending his third option. The Government have considered these recommendations carefully and listened to views across both Houses, including those expressed by four parliamentary Select Committees, three of which are in this House.
The House has clearly signalled that it recognises the importance of working constructively together as noble Lords scrutinise the legislative programme before us. I would like to thank noble Lords across this House for the spirit of partnership that has been shown.
The Government agree with my noble friend Lord Strathclyde’s conclusion that on statutory instruments, as with primary legislation, the will of the elected House should prevail, and we believe that his option 3 provides a credible means of achieving this. However we do not believe that we need to introduce primary legislation at this time. We recognise the valuable role of the House of Lords in scrutinising SIs, but there is no mechanism for the will of the elected House to prevail when they are considered, as is the case for primary legislation. The Government are therefore reliant on the discipline and self-regulation that this House imposes upon itself. Should that break down, we would have to reflect on this decision.
This House has an important role to play in scrutinising and revising legislation, and the Government recognise this. As we will find ourselves considering the legislation resulting from the decision of the British people to leave the European Union, the constructive approach this House has so far shown will be ever more important.
Baroness Smith of Basildon (Lab)
My Lords, I thank the noble Baroness for the Statement. It came very promptly after the leak last night, and I do not think she expected to be here this morning. The decision not to proceed with legislation is warmly welcomed by your Lordships’ House, as she will have heard. I pay tribute to the noble Baroness the Leader of the House and to the noble Lord the Government Chief Whip for the way in which they have approached this issue—it is appreciated. I also put on record our thanks to the noble Lord, Lord Strathclyde, for the diligence and care he took on his report. I welcomed and enjoyed the discussions we had, although I have to say that, knowing the commitment he has shown to this House over many years, I sometimes felt his heart was not quite in it.
Although we welcome the main conclusion that there should not be legislation, we still feel that option 3 in the report is wrong, and that it misunderstands the role of this House and the constitutional position of statutory instruments, which are sent to your Lordships’ House from the Government, not from the House of Commons. This was never about the primacy of the House of Commons but about the primacy of government. We certainly welcome the fact that this has been done in the spirit of looking forward rather than of what has happened in the past, and none of us wants to rerun the old arguments. However, I want to briefly reflect on the constitutional background that led to the Strathclyde review following the votes on the tax credits statutory instrument.
That review and its recommendations were an absurd overreaction from the then Prime Minister and completely unnecessary. But perhaps it did us a great service: for one brief moment in time, statutory instruments became exciting to people who had never heard of them before. This House has an enviable and well-deserved reputation for the way in which it fulfils its duty of scrutiny of government legislation, including secondary legislation. As a House, we recognise those responsibilities but also our limitations as an unelected second Chamber. We also recognise that when it comes to secondary legislation, with our scrutiny committees and our debates, we discharge that duty with both expertise and experience.
We considered that, as a significant policy change, the tax credits proposals should have been dealt with more appropriately and properly as primary legislation. But even then, this House was reluctant to just block them and we rejected a fatal Motion. However, again in the spirit of how this House works best, we sought to find a sustainable way forward to provide the Government with greater detail on the impact of the proposals, and the time and the space to think again, reflect and reconsider. That gained support from all corners of this House and was passed. The Government reconsidered and changed the policy. That was the right and appropriate action to take.
Your Lordships’ House unanimously agreed the report of the Joint Committee on Conventions, chaired by the noble Lord, Lord Cunningham of Felling, in 2006, which said that in clearly exceptional circumstances this House retains the power to vote against and reject secondary legislation. But the significance of that power is reflected in how rarely it is used: just five times in nearly 70 years. There have been other attempts, but all have failed. That is because it must be exceptional—for example, where the primary legislation is in effect a skeleton Bill or where an SI is being used for a significant policy change, but not where secondary legislation is merely implementing the details of policy from primary legislation. That does not mean we do not challenge the Government or hold them to account but, as the report clearly says, unless there are exceptional circumstances,
“opposition parties should not use their numbers in the House of Lords to defeat an SI simply because they disagree with it”.
The tax credits votes that led to this review were exceptional. They fulfilled the criteria. It was not just a matter of disagreeing, but was completely in line with the history and conventions of this House and the Cunningham report.
The noble Baroness referred to Brexit. Over the past few weeks, there has been considerable speculation about the role of your Lordships’ House in examining Brexit. We have been clear: we will not block; we will not delay. But a Government without a plan do not have a blank cheque. Clearly this House will have an important role, especially if there is considerable secondary legislation that will need us to work together to provide effective scrutiny from all sides of the House in the public interest. I say to the noble Baroness that I hope she and her colleagues in government will see this House as an asset rather than just a challenge.
On these Benches we always considered that the Strathclyde review was evidence that the then Prime Minister, David Cameron, loathed challenge and feared scrutiny. That made life a bit difficult for us because challenge and scrutiny are what we do. However, in warmly welcoming today’s announcement, I thank the noble Baroness and the Chief Whip. I hope this heralds a new, more adult and reasonable approach to government and opposition where challenge and scrutiny are recognised as being in the public interest.
Lord Newby (LD)
My Lords, I thank the noble Baroness the Leader of the House both for making the Statement and for its content. I echo the words of the noble Baroness, Lady Smith, about the sensible approach that she and the Chief Whip have taken over this issue.
At the time, we regarded the Government’s response to the votes on tax credits as being a petulant overreaction. It was part of a general approach that regarded Parliament as a bit of an inconvenience, an approach sadly replicated by their view on parliamentary debates on triggering Article 50. In our view, the House was exercising its scrutiny powers within well-established rules. We rested our case on the Motion proposed by Lord Simon of Glaisdale in 1994, now enshrined in our Companion to the Standing Orders:
“That this House affirms its unfettered freedom to vote on any subordinate legislation submitted for its consideration”.
Our traditional role is to ask the Commons or, as in the case of tax credits, the Government to think again when we believe they have got it wrong. It is worth recalling that in reality, on the question of tax credits, exercising that role produced the rethink that your Lordships’ House was seeking.
The noble Lord, Lord Strathclyde, undertook his review with his customary energy and wisdom but struggled to find a way forward that was an improvement on the current position. It was extremely interesting when his report was debated in your Lordships’ House what wide agreement there was across the Benches about both the pitfalls of his preferred approach and the other things that could be done to improve secondary legislation and the way that it is scrutinised. The clearest message from that debate, which I strongly endorse, was that many of the problems with secondary legislation arise when the Government use it to implement measures that should be included in primary legislation.
There was also a widespread view in the debate that the way in which we scrutinise secondary legislation could be improved by giving some scope for rethink and amendment. Certainly, both as a party spokesperson and as a Minister, I have found debates on statutory instruments for the most part particularly sterile. Will the Government therefore be prepared to countenance further discussion about how the quality of scrutiny of SIs by your Lordships’ House could be improved? In the light of yesterday’s suggestion that the Brexit process might lead to upwards of 2,000 SIs being produced, could the Government give an assurance now that they will not abuse the SI system in future by including in statutory instruments substantial policy issues that should rightly be the subject of primary legislation?
Baroness Evans of Bowes Park
My Lords, I thank the noble Baroness and the noble Lord for their constructive and positive comments. I hope my future Statements may be treated with similar enthusiasm, although I fear perhaps not.
I too do not want to rerun the arguments about what happened. I want to look forward. As I have said, since being Leader I have been very taken with and impressed by the constructive way in which we have been able to work together, and I hope that will continue. However, we felt that what happened raised an issue that we needed to look at. We commissioned a review and I hope I have now been clear that the Government have decided, on the basis of considering that carefully, that we will not be legislating.
I particularly welcome the constructive comments from the noble Baroness around our approach to Brexit. I think we have seen already that noble Lords have taken a constructive approach in the debates we have had, and I am confident we will be able to continue to do so.
The noble Lord, Lord Newby, mentioned the House’s role in scrutinising SIs. It is indeed an important role. The legislation we will have from Brexit will cause us challenges. I am keen to work with Members across the House to ensure that our revising and scrutinising role can be properly undertaken and that we can do this House proud in the work we do.
Lord Strathclyde (Con)
My Lords, this Statement appeals to the very best, indeed, the noblest instincts of this House. Twelve months on, the Government have listened very carefully to the voices around the House and decided that the best way forward is the way the House always proceeds: by agreement, at a pace and with perspective.
That is why I very much welcome what the noble Baroness the Leader of the Opposition said. She reminded us of the statistic that Governments have been defeated at least five times in 70 years. Frankly, if that is the pace that will continue, neither this nor a future Government will have very much to concern themselves with. It is that commitment, which would been very difficult to receive a year ago, which has made so much difference today.
The noble Lord, Lord Newby, raised a question about secondary legislation. Perhaps I may finish with one question on that. It is true that the guidelines on when secondary legislation and primary legislation are to be used are vague or, indeed, opaque. I very much urge the Government to work with the parliamentary draftsmen and make public through departments when it is most desirable to use secondary legislation. Then we can avoid these sorts of issues in future.
If my report has been any part of bringing us to this good solution, I am delighted.
Baroness Evans of Bowes Park
I once again thank my noble friend for all his work in this area. In response to his question, I am very happy to look at the comments he made.
Lord Cunningham of Felling (Lab)
My Lords, first, I join my noble friend Lady Smith in congratulating the noble Baroness the Leader of the House on her Statement and on the positive and rapid way in which she has bought this matter to what I think most people agree is a satisfactory conclusion. After all, the Prime Minister and Chancellor of the Exchequer, who made the original error that led to the charges of abuse of procedure, have now both left office. We have a new Prime Minister, a new Chancellor and a new Leader of the House. It is time to move forward and put behind us the false claims that somehow this House had abused its powers and acted wrongly. That was never the case and, speaking for myself, I hope that it never will be. I, for one, would not abuse my vote by voting against any measure which came from the other place which was covered by financial privilege. I voted on the matter of tax credits because it was a statutory instrument, not a Bill, and therefore was not covered by financial privilege.
Baroness Evans of Bowes Park
I thank the noble Lord for his comments and hear what he says. As I said, when we work constructively together, we are an extremely effective House.
Baroness Hayman (CB)
My Lords, like others, I am extremely grateful to the noble Baroness for her Statement and for the decision that has been made. I was delighted to hear that the noble Lord, Lord Strathclyde, has returned to his normal tranquillity and confidence in the House’s ability to behave rationally and in a mature fashion, which was uncharacteristically absent, I felt, in some of his report and the consequent discussions.
To return to the point made by the noble Lord, Lord Newby, the tenor of the debate following the tax credits issue was very much about the quality of the scrutiny that Parliament gives to secondary legislation. Although we all agree that in many instances we need primary legislation, in fact we have a great deal of secondary legislation and the challenge will be greater after the so-called great repeal Bill. Do not both Houses of Parliament need to look at how, together, they provide more effective scrutiny and greater challenge to the Executive? Will the noble Baroness consider again the suggestion made at the time that a Joint Committee of both Houses looking at ways to improve scrutiny could be very valuable?
Baroness Evans of Bowes Park
I thank the noble Baroness for her comments. She is absolutely right: we will face significant challenges with the amount of legislation, both primary and secondary, that will come to this House, and I am looking forward to working with the leadership across this House to ensure that we do the most effective job in helping to produce the best deal we can for this country. I am happy to take away her thoughts about scrutinising secondary legislation, and I will talk to colleagues in government.
Lord McNally (LD)
My Lords, I am always most worried when the House is congratulating itself on how wise it has been. I was a member of the Cunningham committee, and if there is a paragraph in its report of which I claim authorship and in which I take pride, it is the one that repeats the assertion by Lord Simon that this House must retain the right to say no. What makes this House work, faced with the Government’s oft-repeated threats to clip its wings, is its grim determination to retain that right to say no. The warning, and the danger, is that if we ever gave away the right to say no—sparingly as it is used—the dynamics of this House would change. We would become a debating society, because Governments would know that whatever process they adopted—option 3 was just a single example—they could bypass this House. This House is here for a special reason, and it is the right to say no that protects its authority and makes Governments think twice.
Baroness Evans of Bowes Park
I entirely agree with the noble Lord that this House has a vital role to play, but we must remember that the elected House has the final say, because it is the elected House. What we can do is add our voice and our expertise to ensure that opinions are reflected, and that we can improve legislation—but we are reliant on the House’s self-regulation and discipline to achieve that. As I said, I believe that we are constructive and we work well together—but if that breaks down, we will have to reflect on what that means.
Lord Lang of Monkton (Con)
My Lords, I am not at all averse to joining in universal congratulations where they are deserved, and I warmly congratulate my noble friend on her role in helping to bring a sensible conclusion to this matter. This House works best, in a bicameral parliamentary democracy, when each House understands and respects the powers, responsibilities and limitations of the other. I hope that as a result of this past confrontation, now resolved, there will be greater understanding in the future. The suggestion by the noble Baroness, Lady Hayman, of further consultation between the Houses may well offer an appropriate way forward.
As for secondary legislation, I assure your Lordships that your Constitution Committee has made this a long-running campaign for improvement. This is a besetting sin of successive Governments—it is by no means confined to the present Government—and I would suggest one way forward to my noble friend: if the Government would take a self-denying ordinance over ever inserting primary legislation into delegated secondary legislation, that would be a good start.
Baroness Evans of Bowes Park
I do not want to give answers that diminish the enthusiasm we are showing today, but I shall not make promises I cannot keep. I add my thanks for the work of the Constitution Committee, both for its report on this review and for its wider work, which is extremely valuable and well respected.
Lord Foulkes of Cumnock (Lab)
My Lords, I was slightly worried that the Leader of the House was implying that she and the Government would have an easy time when it came to scrutinising all aspects of Brexit. The legislation that gave us the referendum was itself flawed, in that it had a very restrictive franchise and no threshold, and it was not, in my view, considered properly by Parliament. As a result of that we are in a mess. That is why it is very important to scrutinise every aspect of Brexit and all the consequences, which are huge and serious, not just in Scotland and Northern Ireland but throughout the whole of the United Kingdom, affecting the constitution of this country as well as its stability and prosperity. If we do not scrutinise them properly, we are not doing our job.
Baroness Evans of Bowes Park
My Lords, I am under no illusions about the task that we have ahead and the role this House will play in scrutinising legislation relating to Brexit. As I said, noble Lords have already taken a constructive approach in dealing with the debates we have had so far, and I have faith that this will continue. As I said to the noble Lord, Lord McNally, we are also reliant on self-regulation and discipline to ensure the passage of legislation. We hope that that will continue.
Lord Forsyth of Drumlean (Con)
After what the noble Lord, Lord Jones of Birmingham, said on the “Today” programme this morning, could my noble friend confirm that this House is acutely aware of the supremacy of the other place and always will behave accordingly? I congratulate her on persuading her colleagues to accept this position. Could she make it absolutely clear that this position has been reached on the understanding, because of her advocacy, that the House continues to do so, as everyone here is determined that it will?
Baroness Evans of Bowes Park
I thank my noble friend for that question, and I can indeed confirm that.
Lord Wallace of Tankerness (LD)
My Lords, in welcoming the Statement, I take the opportunity to place on record my personal thanks to the noble Baroness’s predecessor, the noble Baroness, Lady Stowell of Beeston, and the Chief Whip, for the very constructive way in which they engaged with me on this issue when I was the leader of the Liberal Democrat Peers. I welcome the outcome that there has been, but I reinforce the call made by the noble Baroness, Lady Hayman, to consider a Joint Committee. One of the frustrating things that noble Lords often feel—as, indeed, do Members of the other place—about statutory instruments is that it is take it or leave it; there is no chance to amend. I know that, during the course of discussions in evidence given to committees, there were some suggestions as to how it might be possible to devise some procedure which would allow amendment of statutory instruments. Very often, it is just one small part of the instrument that people feel aggrieved about. Would she be willing to take that on board and give serious consideration to it? We should not just let the thing finish here but consider other ways in which we can actually improve the scrutiny of statutory instruments?
Baroness Evans of Bowes Park
Again, I am not going to make any promises that I cannot keep, but I am very happy to say that I want this House to work effectively and I want us to make sure that we use our expertise properly. I want to improve the processes that we have, if we can. I am happy to take that point away, but I cannot promise what the outcome will be.
Lord Trefgarne (Con)
My Lords, as the chairman of your Lordships’ Secondary Legislation Scrutiny Committee, I warmly welcome the announcement made by the Leader this morning. My committee made representations along the lines that have now been agreed to, and I am very satisfied with that.
Baroness Evans of Bowes Park
I thank my noble friend for that and thank his committee for all the work that it did in relation to the review and the work that it does regularly for the House.
Lord Beecham (Lab)
My Lords, I join all noble Lords in congratulating the Government and the Leader of the House on reaching a much more mature position than was threatened by the previous Prime Minister. The whole House very much welcomes the recognition of the House’s role. However, I warmly endorse the remarks of the noble Lord, Lord Lang, about the overreliance on secondary legislation as part of the legislative process. Along with others, I have spent many happy hours in the Moses Room tormenting Ministers, or endeavouring to, on the contents of secondary legislation. I am particularly conscious of how the system works in the light of the experience over the Housing and Planning Act, as it now is. It is now more than six months since the Act received Royal Assent; the Bill went through on the basis of consultation that had not taken place and leading to secondary legislation, none of which has yet emerged. We have not even seen the response to the consultation. This is a grave defect in the system, and the noble Lord was right to draw attention to it—and it is a matter that the House and the Government need to consider, because it makes a nonsense of the time devoted in this House to primary legislation if so much of what actually happens is determined by this somewhat difficult process, over which we have little control and which, on the basis of the experience of the Housing and Planning Act, seems never to emerge.
Baroness Evans of Bowes Park
Like the noble Lord, I often reflect on the many hours that we spent in this Chamber on the Housing and Planning Bill in the last Session. On a broader point, there has not been an increase in the use of SIs laid before Parliament in the last 20 years, but I hear what he says in relation to that Bill.
Baroness Fookes (Con)
My Lords, as chairman of the Delegated Powers Committee, which also produced a report, may I say that this is a very happy conclusion and I thank the Minister for it? I want to make a slightly different point about delegated legislation in general. I think that it would be good if Governments were more careful before they introduced legislation and thought far more carefully about what should be in primary legislation and in delegated legislation. Sometimes it is a case of more haste, less speed.
Baroness Evans of Bowes Park
I thank my noble friend and her committee for the work that they have done on this review and more generally. I assure her that I am working very hard with the leader of the House of Commons to have a rigorous approach with our Cabinet colleagues when they bring forward legislation to us.
Lord Rooker (Lab)
My Lords, I congratulate the Government on the decision. I have one simple request, as this seems to me a golden opportunity. Can the Government say what they are going to do, using this as a lever, to explain to journalists and commentators the role of this House? It is the supreme ignorance among journalists and commentators—which I agree exists also among the other House, and which I shared before I came here—about our role that led to the kind of ignorant interview that the public heard on Radio 4 this morning. Can we use this as an opportunity to explain to the media, as many of us do with the Peers in Schools programme, the exact role of this House? This seems a golden opportunity for the Government, on an all-party basis, to do something about that.
Baroness Evans of Bowes Park
I thank the noble Lord for his comments, and I entirely agree that we have a lot of work to do to improve the public’s understanding of the excellent and important work of this House. I am very keen to try to play my part in that, but we need Members across the House to do it. I know that the Lord Speaker is also very keen to make sure that we do what we can to help the public understand the important role that we play.
Lord Cormack (Con)
My Lords, there has never been a greater need for the calm deliberation that this House can bring to contentious issues. Will my noble friend accept that the example that we have had from both Front Benches today has been splendid? We all feel, across the parties, that we have a Leader of the House who takes that role seriously and we have a Leader of the Opposition who responded in an entirely constructive manner.
Baroness Evans of Bowes Park
I thank my noble friend for those comments; I think I probably do so on behalf of the Labour leader, the noble Baroness, Lady Smith, as well.
Viscount Hailsham (Con)
My Lords, I echo the suggestion made by the noble and learned Lord, Lord Wallace, about the amendability of statutory instruments; I have spent the last 30 years arguing for that. In view of the work that will be done pursuant to my noble friend’s report, it would be very helpful if we could look again at the possibility of amending statutory instruments.
Baroness Evans of Bowes Park
As I said, I can make no promises. I said to the noble Lord that I will obviously take these comments back and we will investigate further.
Lord Hope of Craighead (CB)
I do not think that this debate can conclude without mention of Henry VIII. Repeatedly, some Members—certainly on my Benches—have complained about the overuse of Henry VIII clauses. Can the Government look more carefully at that? It is not only the use of them but the wording used; sometimes one can see the force of having a clause of that kind, but can find it is overdone. There is really a major issue here as to whether this should be properly controlled.
Baroness Evans of Bowes Park
I assure the noble Lord that when we legislate we most certainly do, and will, take care to ensure that powers are delegated appropriately.
Lord Beith (LD)
My Lords, can I commend to the Leader of the House the transcripts of recent evidence sessions of the Constitution Committee? They illustrate so clearly that this is not merely a procedural problem for this House; the inability to amend statutory instruments has profound effects on those who have to carry out the law and would rather have it in the form of primary legislation.
Baroness Evans of Bowes Park
Again, I will look at the points that the noble Lord has raised.
Lord Morgan (Lab)
My Lords, briefly, I agree with all the rightful praise that the Government have received. I particularly appreciate the comments of my chairman, the noble Lord, Lord Lang, who is chairman of the Constitution Committee—we are very fortunate to have him—that there has been abuse of the procedure for delegated legislation. However, the reason for my standing up is that I think there has been abuse at a more fundamental level. The noble Lord, Lord McNally, observed that the House of Lords should preserve the right to say no, but there are different ways of saying no. One way, in effect, of saying no is not to be allowed to speak, and I feel that the understanding of financial privilege has been incorrect and confused for many years. We had that with many important measures such as that on welfare reform, and I heard the noble Lord across the Chamber—a former Clerk of the House of Commons—taking the same view. The view that we have taken of financial privilege has been very broad and vague, and not in accordance with what Mr Asquith said in passing the Parliament Act 1911. As long as the House of Lords is restricted in a way that I regard as incorrect and unhistorical, we will continue to have problems.
Baroness Evans of Bowes Park
I will reflect on the noble Lord’s comments. However, I end by saying that this discussion and debate has shown that we work best when we work together.
Economy: Currency Fluctuations
(7 years, 5 months ago)
Lords ChamberRead Full debate Read Hansard Text
Baroness McIntosh of Pickering
That this House takes note of the impact on the economy and investment of fluctuations in the level of the pound sterling.
Baroness McIntosh of Pickering (Con)
My Lords, I am delighted to have secured this debate and look forward to contributions from my noble friends and noble Lords across the House who have worked at the coalface in business and bring real experience to this debate. I welcome my noble friend the Minister to the Front Bench and look forward very much to his response.
Fluctuations in the level of the pound are not unusual, but the recent collapse in the pound sterling in October was remarkable, with a fall of 16% taking it to its lowest level for more than 30 years. For a while the pound has been stubbornly low, with stocks and shares relatively high. This has made for challenging and uncertain times for savers and investors. I declare an interest as a modest saver and investor.
Standard & Poor has already downgraded the AAA rating of sterling and has raised concern about the pound sterling losing its status as a reserve currency—a possibility which must be taken seriously. What has the impact been on various categories of economic activity, more particularly in rural areas where I have my roots? North Yorkshire and other rural areas attract many older people who live, work and retire there. Those who have saved in cash ISAs and bank savings—often older people who live prudently and put money aside—are often disappointed to find that their savings are worth substantially less almost overnight owing to a currency fluctuation. In any event, with such low interest rates as at present, they are receiving a much lower return on their deposits.
Pensioners and older savers are precisely the category of people who spend and put money into the economy in good times, so the current level of the pound discourages those savers from spending money, which rebounds on the economy. A low level of pound sterling against the euro and the US dollar means that the pound in your pocket is worth less and buys less in the shops. Spending by tourists now appears to outstrip and exceed that by locals. For UK holidaymakers visiting Europe and the United States, the pound will not go so far and holidays will cost more. Wine imports cost more, whereas English wine sales are booming—and exports of Scotch whisky, too. While this might be good news for exporters, the costs of imported materials used in goods made here go up. Latest figures show only a small reduction in the UK’s trade deficit over the months since June.
We are only 62% self-sufficient in food production. That makes us very reliant on food imports, which in turn pushes up the cost of food in shops. Government measures to boost exports are welcome and are already producing results in countries such as China, but these take time. Until the imbalance in food imports and exports is redressed, there will be an ongoing trade deficit. In the short term, the low value of the pound has meant an increase in basic farm payments for UK farmers, but these will cease when Britain leaves the EU in 2019. In any event, the cost of animal feed for their livestock will have increased incrementally.
Price increases will of course fuel inflation. Currency is important to farmers as it affects their ability to compete internationally, as well as their agricultural support and profitability. A year ago, £1 was worth around €1.35. It is now worth around €1.11. Some forecasts suggest that the pound will reach parity with the euro by the end of 2017. While a weak pound helps to support prices for farm outputs, the impact of exchange rate fluctuations on the agricultural sector has many layers. The pound/euro exchange rate impacts greatly on the value of support payments received by farmers in the UK. A weaker pound sees an increase in the value of basic payment scheme support payments, whereas when the pound strengthens the reverse is true. It is ironic that at the moment farm profitability depends almost entirely on the level of the currency.
Currency value is only one part of the equation for farming, alongside the vagaries of global markets and convoluted supply chains, so imports of fuel, fertiliser and machinery will negate many of the benefits of currency changes. In 2013, the UK’s trade deficit with other EU countries in raw materials amounted to €12 billion. The UK’s food and drinks industry, employing 400,000 people across the UK and contributing £21.9 billion to the UK economy, has seen significant increases in the prices of imported raw materials. Cocoa is up 50% since 2013 and skimmed milk powder is up 55% since April this year, and there have been steep increases in the cost of butter and coffee beans. The Food and Drink Federation envisages three possible outcomes if these extremes of price volatility persist: retailers will put their prices up; manufacturers and/or retailers will absorb the costs; or UK consumers will simply lose the choice when those products are taken off the shelves.
With a low pound, the cost of industrial component raw materials also becomes much higher. Only where there is substantial added value to the products will these products from the UK become more competitive. The weaker pound helps only the manufacturing companies that export, which is probably only about 10% of all those companies operating in this country. That means that 90% of UK businesses face increased costs from a weak pound sterling and no benefit whatever.
What has the impact been on pension funds? They are coming under increasing pressure with the low level of the pound combined with low interest rates. Pension funds are facing a potential deficit, compounded by a poor return on gilts.
Household budgets are also being squeezed. There are more young people living at home, and less income in households means that people are more wary of spending money. We have seen Marmite wars in the supermarkets, with Marmite jars costing over 10% more owing to the value of the pound. That took the country by complete surprise. More recently, the manufacturers of crisps made entirely in this country with UK products, and the manufacturers of fish fingers, have been saying that the costs will rise by 10% or more. We must wait to see what happens at Christmas, which is a time of major expenditure for hard-pressed families. What bought 12 mince pies last year may buy only six this Christmas.
It is understood that market forces will prevail and that the pound will find its own level. What would help would be for interest rates to rise before Britain leaves the European Union, yet the Bank of England appears to be focusing more on those in work and keeping employment high. If anything, looking at the figures today, unemployment is at record low levels. The main concern of employers across the country is a shortage of much-needed skilled workers. Sectors facing skills shortages include farming and horticulture. Horticulture alone requires some 80,000 seasonal workers a year to hand-pick fruit and vegetable crops.
When Alabama, as an exercise in trying to go it alone, put Alabama first and tried to get Alabama people to pick their fruit and vegetables, the fruit and vegetables rotted in the ground. This is a feature that the industry in this country wants to avoid. Currently, around 90% of those working in horticulture come from abroad, of which the majority are from EU countries. Their status post-Brexit is causing great uncertainty, and every effort must be made to encourage these workers to stay—to both live and work in the UK.
Shortages are seen also in industrial units in small market towns in north Yorkshire and elsewhere. Areas of the economy such as the NHS, the care sector, light engineering and mobile phone networks, as well as farming and other sectors, depend on EU and other non-British workers.
Another consequence of the lower level of the pound is to see inflation rising. The Bank of England forecasts that inflation will almost triple in the next three years to reach 2.75% by the end of 2017, before falling to 2% by the end of 2019. The governor, Mark Carney, predicts that inflation will rise owing to an increase in the cost of the production of food and other items caused by the weakness of the pound. The Bank must decide whether to dampen inflation and slow any level of wage growth or allow inflation to rise and manage the consequences. A worrying sign at present is the decline in business confidence across the board in most sectors and businesses of all sizes. The pace of change and the nature of the challenges ahead are huge. The growth forecast of 1.4% and the 2018 forecast are down. Again, the level of exports to EU markets is predicted to reduce sharply from 2019. Although the independence of the Bank of England enjoys cross-party support, this leaves government with few tools to manage the economy.
I will conclude, if I may, on an optimistic note. Looking ahead to the Autumn Statement with great interest, I think that one area of spending which would boost the economy and economic growth while easing the pressures on the low pound is that of infrastructure—in particular, flood protection and flood defences. Small flood protection measures are already happening using CAP money to retain flood water temporarily on farmland, to plant trees and to encourage natural flood defences to slow the flow of flood waters, as has been so successfully engineered in Pickering. Water companies have a role, too, as well as internal drainage boards doing key, regular maintenance, delivering local solutions to flood risks.
A game-changer would be either pump-priming or the insurance sector and pension funds making a return on investment in flood defences on a grand scale. One alternative would be to reward insurance firms for investing in those areas most at risk of flooding, which, in turn, could save the insurance sector huge losses—approaching £1 billion for one flood event and often £3 billion in insurance costs in one year alone in the wake of major floods. Local communities, as well as the national economy, would benefit, and good use could be made of this with regard to even a small percentage of the flood insurance premium tax we all pay, which was increased at the last Budget. In my view, it would be hypothecation at its very best.
The model that comes to mind is that associated with shadow tolling for roadbuilding, known as design, build, finance and operate, or DBFO. My noble friend the Minister will be familiar with this model from his days as Secretary of State for Transport. I hope it is a model that the Government will look to, either in the Autumn Statement or the Budget, to protect the country and boost infrastructure spending and economic growth.
The contribution that rural businesses, including farmers and growers, make to employment and economic growth has long been overlooked, yet they are the drivers of the local economy in rural areas. Perhaps the current economic climate, along with currency fluctuations, will encourage them to take more control of their own destiny.
Lord Haskel (Lab)
My Lords, like the noble Baroness, I too would like to keep the exchange rate steady. There used to be an idea that a managed exchange rate could benefit the economy—that there was a direct cause and effect. If only life were so simple. Chancellors thought that a strong currency would create a large balance of payments deficit and so some tried to manage it down, only to find that that resulted in rising domestic prices and low investment. A lower exchange rate may make some of our exports cheaper, as the noble Baroness said, but as the November Bank of England inflation report points out, we have become increasingly integrated into global supply chains. That makes imports more expensive, and alternative UK suppliers need time to gear up, by which time the customers may have gone elsewhere.
An added complication is that the current uncertainty over Brexit and world trade does not encourage the necessary investment to replace imports. Also, we are very reliant on exporting services. Services are less price sensitive and frequently themselves require some overseas investment—investment which becomes more expensive.
A high exchange rate has been partly blamed for business migrating, leaving low-paid jobs with no future in the old manufacturing areas. Again, it is not as simple as that. Other businesses have shown that investing to raise productivity with new innovation and new technology demonstrates that the so-called high rate of exchange is not a barrier to a successful business. Manipulating the exchange rate does not compensate for low investment and poor business management.
New technology in all its forms affects our exchange rate. There is the potential of technology to invent new currencies. Technology can enable firms to trade without the intermediation of banks. Then there must be the possibility of massive cyber intervention in the exchange rate markets, causing the pound to fluctuate and draining confidence in the reliability of our currency. Then there is the matter of a fluctuating exchange rate through competitive devaluation. That is the kind of thing that the Bretton Woods agreement tried to eliminate, but was unsuccessful. The next President of the United States has called China an exchange rate manipulator and will impose tariffs on trade with China. China, a country that holds much US dollar debt, will in turn retaliate. In effect, that becomes a race to the bottom.
The noble Baroness spoke about the impact on farmers. According to a recent CBI survey, the pound’s recent drop is a mixed blessing. A third of manufacturers said that it helped exports, but nearly half said that the impact on their business had been negative because of the higher cost of imports. The rest said that the effect was neutral. The general public, too, are apparently sceptical about currency fluctuation. Apparently, the consumer thinks that as the currency goes down, prices go up immediately, but when the currency goes up, prices come down very slowly.
Some years ago, a member of the editorial staff on the Financial Times pointed all this out and proposed that much of the responsibility for the exchange rate should lie with an independent Bank of England. That became law in 1997 and the journalist became the Chancellor’s economic adviser, which led to a distinguished career in Parliament. He is now stepping out to even greater things. Mr Ed Balls is a contemporary of the noble Baroness. I note that today he has called for central banks to “sacrifice some … independence”. I am not sure how independence can be nuanced; you are either independent or you are not. The Bank needs independence to carry out its purpose, and the purpose of that independence is to maintain a long-term stable but floating exchange rate without fluctuations so that business and the public sector can take a long-term view with less uncertainty about short-term fluctuations.
During the uncertain days just after the referendum, it was the governor and the Bank of England that kept the exchange rate far more stable through their technical intervention than it would have been if it had just been left to politics. The criticism made of the governor for warning that Brexit would damage the economy is mistaken. It was entirely in his line of duty, and it is certainly no reason why monetary policy should be handed back to politicians. Our exchange rate must not be politicised. It is part of the mechanism of adjustment, as the governor said recently.
Certainly the remit can be looked at, but less so the mechanics. Holding the exchange rate steady while allowing it to float is a technical and complicated manoeuvre requiring a lot of experience, skill and knowledge—expertise which some have ceased to value. However, others like me think that these skills have a value and I would like to see the exchange rate managed using a kind of Haldane principle where specialists place the national interest before sectional interests, particularly when economic data will be evaluated in the uncertain light of Brexit.
Of course, decisions on interest rates have a major effect on the exchange rate of the pound. Again, we have taken this out of the hands of politicians for the same reasons, but some politicians have said that the Bank of England is wrong to rely on ultra-low interest rates and have called for its independence to be taken away unless it raises interest rates soon. They were at it again last Tuesday. Yes, experts get it wrong sometimes and forecasts are uncertain—that is why they are forecasts. People have to make a judgment.
Where there is a case for political interference is in recognising the danger of another financial crisis because another one must be a danger to the stability of the pound. Take, for instance, the huge financial business conducted in London by banks and Governments on derivative transactions, interest rate swaps and other exotic financial trading—trading that some people call betting. This exceeds by far ordinary banking, insurance, fund-raising and other traditional financial businesses. In fact, London clearing has 90% of this world business. The numbers are huge and greater by far than the balance sheets of the banks that caused the crash. It is a global business conducted by Governments, banks and trading organisations. We are told that owing to the unique expertise found in London, there is no danger to sterling, but once the leverage gets out of hand, as happened in 2008, who knows what will happen? This is where Ministers should be concerned, but are they? Leaving the Bank of England alone to be a stable and independent institution normalises our lives and our exchange rate, and holds it steady. It is an institution that provides stability for our currency.
I thank the noble Baroness for this debate because up until now it has demonstrated that a stable and consistent rate of exchange is central to the success of our economy. Can the Minister tell us how the Government plan to ensure this stability in the promised industrial strategy? Will there be political control or independent control?
Lord Carrington of Fulham (Con)
My Lords, I bring to the attention of your Lordships my interests as recorded in the register. I add my congratulations to those offered by the noble Lord, Lord Haskel, to my noble friend Lady McIntosh on obtaining this debate and on its timing, coming as it does when our American friends have thrown yet another spanner into the smooth workings of the foreign exchange markets.
With the Trump victory coming on top of Brexit, the various crises in the Middle East, Chinese expansionism, the continuing inability of the eurozone to resolve its problems and sluggishness in the world economy, perhaps it is not surprising that currencies fluctuate—to use the wording of this Motion—although “dance a jig” might be a more accurate description of the state of the markets.
I want to make only two points. First, a fluctuating currency is a hindrance to business and a bar to investment. It may be self-evident, as has been said by my noble friend and the noble Lord, Lord Haskel, that businesses like certainty. Some companies find irresistible the temptation to make opportunistic profits from currency fluctuations, but most would rather remove the downside risk of the currency moving away from them.
It is not just big businesses; small companies often export and have to do so in their customer’s own currency. Sadly, the days when we could insist on exporting in sterling have long gone. Even if companies do not export, they suffer from changes to their input costs caused by the exchange rate, not least those of energy.
However, this has been so for a long time and most businesses cope well with a floating exchange rate. If they are large companies, they can buy forward in the foreign exchange markets and, at a cost, minimise their exchange rate exposure. Small businesses on the whole control their foreign exchange risk by minimising the length of time of their exposure to currency fluctuations where they cannot exercise a hedge.
There are two problems with this. If you are a small company, finding a bank to hedge your currency exposures is near impossible. If you are Muslim and want to operate your business in accordance with the sharia, you cannot simply remove your currency risk. In these turbulent times, would it be sensible if the Treasury were to help small businesses, and Muslim-owned enterprises, to access solutions to such problems at a reasonable cost? Could it be done by getting the banks and the other parties involved to sit down and work out a solution? Perhaps we could get UK Export Finance, which used to be called the Export Credits Guarantee Department or ECGD, involved, because at present it does not really address those problems.
Secondly, there is very little we can do to stop sterling fluctuating. It has been tried before and has met with very little success. The Bretton Woods agreements and the Gold Standard before them led to the UK having an overvalued currency for many years, which was possibly a principal reason for our industrial decline in the decades after World War 2. But there may be quite a lot we can do to smooth the rapid movements in the foreign exchange markets—the fluctuations that so bob up and down rather than the overall general trend.
Decisions in FX trading are made broadly on two criteria. One is mathematical, the other is sentiment. Not much can be done about the maths, but a lot can be done about the sentiment and the guesswork that goes into forming it. I know that the Bank of England and the Treasury do not target sterling exchange rates, and for understandable reasons. It has not been successful in the past—we have just to remember the problems with the ERM. Inevitably, using interest rates to achieve inflation targets also impacts the exchange rate, so forward guidance, whether done in the way the Governor of the Bank of England used to suggest or, as it is now done, by delphic pronouncements from the MPC members, does have an impact on the sterling exchange rate, particularly when taken together with the views of similar oracles at the Federal Reserve and the ECB.
I am sure that great thought goes into the suggestions made as to the future direction of interest rates, but in times of volatile markets, it might be helpful to businesses struggling to make a profit by exporting if some of the interest rate guidance could be given in such a way as to smooth foreign currency market fluctuations. I am not suggesting reverting to targeting the sterling exchange rate, just a more nuanced approach, with the central bank taking some responsibility to smooth the deeply damaging turbulence in the foreign exchange markets caused by excessive volatility.
Lord Skidelsky (CB)
My Lords, I, too, thank the noble Baroness, Lady McIntosh, for making this debate possible. The most dramatic economic effect of the United Kingdom’s Brexit vote has been the collapse of sterling. Since June, the pound has fallen by about 16% against a basket of currencies. Mervyn King, the former Governor of the Bank of England, has hailed the lower exchange rate as “a welcome change”. Indeed, with Britain’s current account deficit in the order of 7% of GDP—by far the largest since records started—depreciation could be regarded as a boon. But is it? That is the subject of our debate today.
There are two things to consider. The first and most urgent is the effect of sterling depreciation on our payments to, and receipts from, the European Union’s budget. The second is its effects on our economy. I do not want to say much about the first, but I think the headline answer is fairly straightforward. As Britain’s contribution is fixed in euros, Britain will have to pay about £700 million more to meet its EU budget obligation next year, but devaluation will also make the British economy smaller in terms of euros, so its required euro contribution based on GDP will go down. The two effects should cancel each other out. On the other side, it will receive fewer pounds from the EU budget, so farming support subsidies, for instance, will go down, as the noble Baroness, Lady McIntosh, pointed out.
All this will complicate Mr Hammond’s budget arithmetic, but the budgetary problem is a secondary matter compared to the effects of sterling movements on the economy. Larry Elliott, economics editor of the Guardian, argued on 16 October:
“The current account deficit will shrink as a result of stronger exports from the manufacturing and service sectors, the boost provided to the tourism industry, and because cheaper domestic goods and services will be substituted for more expensive imports. To say that dearer imports will make life more difficult for consumers is to miss the point. That's how rebalancing works”.
However, one could say that, in some ways, Mr Elliott has missed the point, because the argument assumes that sterling depreciation will cause an increase in the demand for British exports and holidays that foreigners want to take in Britain. Quite simply, foreigners will have to pay less of their own currency to buy British goods or enjoy holidays in this country. Certainly, consumers and many businesses will take a hit, but this will be offset, it is said in the Elliott argument, by increased export demand, which will increase employment, profits and wages. So the effect on our living standards, on this argument, will be very small.
However, if all that depreciation of sterling does is make imports more expensive, the rebalancing of the accounts works simply by making us poorer. If domestic demand falls sufficiently that we will no longer be able to afford the same amount of imports, that is the way a rebalancing through imports works. There may be some uptake in tourism but we have to recognise that the price effect is partially offset by the weather effect. However cheap we make holidays in Britain, holidays in the Mediterranean will continue to be more attractive. The essential point is that you can always get back to a balanced position by making a country too poor to import on the old scale. That is roughly what has happened in much of the single currency area, with countries such as Greece and others. They have rebalanced their accounts, admittedly under a different exchange range regime, just by reducing their standards of living.
What does the evidence tell us about the effect of exchange rate changes on the economy? It tells us that the effect of sterling depreciation on the demand for our exports is small. On the one hand, demand for our exports and our own demand for imports are price inelastic, as the economists like to say—a fall in sterling means that we spend more money on imports but without increasing our exports; on the other hand, even if the demand for our exports is increased, we do not have enough exporting capacity to take advantage of it.
In 2008-09, when the rest of the world was on the verge of deflation, the UK was experiencing an inflationary recession, with GDP contracting at a top rate of 6.1% annually, while inflation reached 5.1%. This occurred because sterling fell more than 21%—peak to trough—from 2007 to 2008. Moreover, although the current account deficit subsequently narrowed, the improvement was only temporary. After 2011, the current account deficit started to widen again, even though the pound never clawed back its losses.
In fact, this has been a problem ever since the late 1950s. Whenever we get close to full employment, imports start to rise faster than exports. When sterling was fixed to the dollar, Governments reacted to the widening trade imbalance by slowing down the economy for a year or so, causing imports and the trade deficit to fall. Then we took off again and the deficit widened again. That was the pattern of the 1950s and 1960s. Since the pound started floating in the 1970s, a widening of the deficit has been met by currency depreciation, but this has not basically altered the pattern. With short intermissions, the pound has just continued sinking, without the vaunted recovery of competitiveness. Who now recalls that £1 was worth $4.03 in 1967?
It is hard to avoid the conclusion that the basic reason for this pattern of events has been the continued decline in our manufacturing industry. This has accelerated in the past 40 years from around 28% of gross value added in 1978 to less than 10% today. As the economist Nicholas Kaldor pointed out quite frequently in this House, because manufacturing has higher returns to scale than services, manufacturers benefit more from devaluation than services. We have restricted the advantage of devaluation by restricting our manufacturing sector.
In addition, as has been pointed out, structural reforms since the mid-1990s have ensured that British exporters are deeply integrated within global supply chains, As a result, many of Britain’s exports require imported inputs so that when sterling depreciates and import prices rise, the knock-on effect on export prices renders them less competitive. The most recent OECD data show that the import content of UK exports is around 23%, compared with around 15% for the United States and Japan.
For the moment, the UK is relying on capital inflows into the City of London to limit sterling’s fall. But, as the exchange rate collapse of 2008 showed, this source of foreign demand for sterling is highly unstable. When the worm inevitably turns and the flows reverse, both sterling and exports will take another hit. The bottom line is reasonably clear: we cannot rely for continued prosperity on exporting financial services—valuable though these are—the amenities of London and selling attractive old properties to foreigners. A very small country might live off services of this kind, but we cannot.
What is to be done? Here I might step out of line with what other noble Lords think. I think the only rapid government action that will work is to substitute goods currently imported with domestically produced goods. The classic way of doing this is through import controls but other measures less damaging to trade rules and international amity are available. The national investment bank that the Labour Party is advocating could be given a mandate to invest in industries with a high import substitution potential. That is one way. An alternative would be to subsidise such industries directly from the Exchequer, with subsidies tied to the quality-adjusted price of the import being substituted. As the domestically produced goods become competitive with the foreign goods, the subsidies would be reduced and the industry allowed to stand on its own two feet.
There are problems with both solutions, which I would be the last person to want to minimise, but something has to be done. If nothing is done, we risk permanent impairment of prosperity. A depressed economy can be reflated and an inflationary economy can be depressed, but losing access to crucial foreign markets through uncontrollable movements in the exchange rate is largely irreversible.
Lord Paul (Non-Afl)
My Lords, I thank the noble Baroness, Lady McIntosh, for introducing this debate. It is always an honour and a pleasure to listen to the noble Lord, Lord Skidelsky. I learned a great deal. I declare an interest as chairman of a manufacturing company, Caparo, and chancellor of the University of Wolverhampton.
We face a period of more than usual uncertainty about Britain’s position in the world. As our Government start to tackle the daunting task of implementing Brexit, the world is also trying to guess how the new US Administration will play their part on the world stage when they assume power early next year. Brexit and the US presidential election have been singled out by commentators as leading to significant fluctuations in the exchange rate over recent weeks. We have heard much doom and gloom from survey firms and others, keen for a good story, on the adverse consequences for the British economy that will surely follow. All are now very excited, and this has provided opportunities for the speculators to make money.
At the simplest level, it is easy to accept the received wisdom that wild fluctuations in the exchange rate create uncertainty and will deter investment in the UK. However, I believe that for Britain a fluctuating pound is really just business as usual. Honda, Toyota and Nissan, some of our biggest overseas investors, have all reconfirmed their commitment to car manufacturing in the UK and further investment. Only this week, Google announced a further major expansion in the UK. The Prime Minister’s most recent foreign policy initiative was a trade mission to India, about which I hear good things and must congratulate her; both countries can now look forward to doing more business together.
We need to distinguish between the step changes in exchange rates caused by major world events, of which Brexit may be one—although some would argue that it was merely an event that pricked an already overinflated pound—and the background noise of daily currency fluctuations fuelled by the financial chattering classes. These should be ignored. I come from a background that means I do not think any Government in this day and age can really do anything to control exchange rates.
We should not be frightened of this change. We should reflect on the long history of this country as a trading nation and what that means. I have been involved with international trade throughout my working life, from the 1950s onwards, mainly in steel and manufacturing goods. Over that period, I have seen much change in the world economy and I know from experience that a trader thrives on change, which brings opportunity. Over the years and centuries, change has also brought many opportunities for Britain which were seized by the entrepreneurs of the day. These recent events will also bring opportunities for business and investment in the UK. If they are followed through, they will create jobs and generate tax revenues for the greater good. If I was a younger man, I would love to get involved.
We must therefore do everything we can in this House to enable British business to seize these opportunities as they arise. We need clear regulation and a certain tax regime; we need an educated and skilled workforce; we need modern infrastructure and good transport systems. These, I believe, are the things that matter to investors over the longer term, not the day-to-day noise of the currency markets. After all, if we can get all that right, we will have a strong Britain and a strong pound.
Let us look at the effect of a weaker pound on higher education. A weak pound means that studying in the UK is cheaper. Britain’s international reputation means that it is the number one destination for international students. We cannot afford to lose that status; in fact, we must strengthen it. Universities are looking for an increase in the fee income from overseas students from the present £3.7 billion to £4.8 billion in 2018-19, and a growth in home and EU students of over 10%. This is the time to really encourage overseas students to come here. Not only do they benefit from the experience but our own students benefit by interacting with people from different backgrounds. Bonds forged at university often last a lifetime and will open more doors to further trade and international collaboration in the future. However, encouraging more students is at odds with the current immigration policy, so we have to find ways to make sure that they return to their own countries when their studies end. The University of Wolverhampton, where I am chancellor, is doing all it can to promote these policies.
Let the Government do everything they can to assist our businesses and universities to build a Britain that will be as great in the future as it has been in the past. The world still retains a respect for Britain as a beacon for democracy—a reputation that has been put to the test by Brexit. Personally, I have always supported being in Europe, including joining the euro to gain all its benefits, but the people have decided. Speaking as a democrat, for that beacon of democracy to continue to shine brightly the Government must be seen to act on the wishes of the people by engaging with the EU on implementing Brexit now. Decisive actions on these issues really matter for our businesses and universities in making their investment decisions, not the daily fluctuations in the value of the pound, but this is no simple task. The Prime Minister must now be allowed to move forward with Brexit in an orderly manner, without irrelevant distractions. That in itself will reduce currency fluctuations.
Lord Vinson (Con)
My Lords, this is a timely debate and we are extremely grateful to my noble friend Lady McIntosh, but I fear that I am going to take a rather different line to hers. The fall in sterling gives us a chance to rebalance the economy and make jobs here, rather than use ever rising borrowing to buy goods from abroad.
How did we become such a heavily indebted nation? We kept borrowing without a care. Today, £730 of every taxpayer’s tax goes to pay interest on our international debts and that is steeply rising. When the history of central bank policies comes to be written, I believe that few economic orthodoxies will appear sensible, years after they were fashionable. We now rightly decry sticking to the Gold Standard in the 1920s and the harmful consequences. We recognise the damage done by sadomonetarism, when Geoffrey Howe put interest rates up to 17%, bankrupting thousands of companies in an attempt to control inflation but in effect setting it alight through wage demands. Incidentally, I agree that the causal relationship between raising interest rates and lowering inflation is highly questionable, though accepted as gospel. Then Greenspan got it wrong when he failed to do anything about fiscal exuberance and the American economy took off.
Today, our economic policy joins that list of follies. Keeping interest rates at 0.5% or less to encourage even more borrowing, when both individually and nationally we are borrowed up to our eyeballs and the mountain of debt is ever higher, must be madness. We should be saving more and using those savings to invest more. Up to now we have done little to correct our massive trade deficit.
How did we get into this problem? It started when we decided to let the pound go free and float in principle but not in practice, muttering, “The market knows best: we should show by example and not indulge in competitive devaluation. If China does it, what does that matter to us?”. We are indeed a trading nation that forgot about the importance of exchange rates during an orgy of credit-fed consumption. Because the Bank of England was mandated to be concerned about inflation, the pound was left to stay high and the damaging effect of that level ignored, making imports easier and exports harder.
There was another reason that the pound stayed high. So much of what is called inward investment was nothing of the sort, though inward investment of a certain sort was unbridled. That investment was not to improve and expand the economy but, often, a straight purchase of assets to secure income for overseas owners. It was still considered beneficial. We have sold hundreds of companies. We have sold not only the silver in this country; we have even started to sell the furniture, turning what used to be valuable foreign income for us into a massive outward flow of cash to others. We effectively rent many of our own businesses and utilities from overseas owners—Heathrow, ASDA, Cadbury, Northumbrian Water, and now ARM, which was sold for £30 billion pounds, to name but a few. But there are hundreds of them, and the effect has been damaging.
Uniquely, Britain—and only partially America—is alone in the belief that it is beneficial to extend the free market in goods and services to include companies. We have got it wrong. That belief is entirely unsupported by evidence, and I am very glad that our Prime Minister has noted it and has begun to be concerned.
The end result of this benign neglect is that the pound was substantially propped up by asset sales well above its fair parity. Its height was welcomed as virtuous and praised for the cheap holidays and imports it encouraged. Few economists thought outside the box or would admit that its height was causing our huge trade deficit, deindustrialisation, too much borrowing, too little investment, unstable, low productivity growth, stagnant wages and too many people losing out from globalisation. We only have to look to Germany, by contrast, to see what a converse economic policy can do. Unfettered free trade has left us in a mess, and I say that as a passionate believer in fair free trade; I declare an interest as someone who has spent a lifetime promoting the market economy. I just hate to see capitalism get it wrong and damage its whole cause.
We must recognise that the correct parity of the pound is essential to a trading nation, and we should make it a key part of our free trade policy. In so doing, we must accept that world prices are not necessarily fair prices reflecting the cost of production but are often, as in the case of Chinese steel, dumped market-clearing prices, lowered to obliterate competition, before raising them again. Reasonable protection against such practices is essential, or it should be, for key capital assets. This is sanity. It is not protectionism but self-preservation.
I realise that this may go against the sacrosanct dogma of the free market purist, but it is a necessity in the real world. Just look where present attitudes have got us. I also accept that this sort of view may not be welcomed by many in the City. Much of its work is beneficial and essential, but, because they are wrongly incentivised, many there would sell their grandmother for a quick gain. This results in much short-term thinking and consequent harm to the economy. The huge tax revenues the City brings to the Treasury have little to do with profit as a consequence of productivity but are mostly gained by a straight deduction from the capital assets the City handles, often through excessive commission. For example, the commission on the takeover of British Gas by Shell was more than £100 million. It could not possibly cost that if it was properly looked at. Such people take the icing off the national cake baked by others, and are overrewarded for so doing. The City makes money, but it creates less wealth. Its contribution is overrated. It also explains why our GNP per head has hardly risen over the years.
If we want true growth, we cannot do it through financial services, but we can do it with a fall in the pound with modern manufacturing, mineral and food production, which the noble Lord, Lord Skidelsky, touched on.
As we reset economic policy to reduce our indebtedness I hope the Chancellor will, apart from other proposals, mandate the Bank of England to keep sterling at fair parity, as best he can, to help rebalance the economy. Secondly, the Bank should get interest rates gradually back to sensible levels that reward saving and make pension provision worth while. For example, how about a 2.5% indexed infrastructure bond, used for that purpose but reserved exclusively for UK pension funds only? Thirdly, the Chancellor—and there are many other things he can do—could stimulate high productivity by letting companies recover the cost of the purchase of capital goods in the same year, not over 10 years or so as is done now. Our productivity is 21% below the G7 average and it is unlikely to be raised by opening ever more coffee shops, which are difficult to automate. Finally, we must accept sensible limitations on free trade, by bringing back the national interest test for mergers and acquisitions and dumping. It was part of the brief of the Monopolies and Mergers Commission and should be part of the brief for the new Competition Commission. I hope the Minister will note that.
The time has come, thanks to devaluation through Brexit, to rebalance and invigorate our inventive, creative and capable nation. I hope we can all grasp it and find a more stable and less indebted way of living with the global economy.
Lord Bilimoria (CB)
My Lords, BBC News reports that:
“The pound has fallen about 16% against the dollar and about 11% against the euro since June”—
at one point it fell almost 20%, and that —
“Chris Williamson, chief economist at IHS Markit said that despite October's CPI fall, the trend over the coming months would be upwards as rising factory costs feed through to consumers.
‘It’s … only a matter of time before price hikes in retailers’ supply chains start feeding through to the customer, as retailers seek to protect margins.
Let us not forget what caused the financial crisis in the first place. We have had the longest period of what in those days were perceived to be low interest rates of 5%. That was one of the main reasons for the financial crisis, and we have now had interest rates close to 0% for years and years propping up our economy.
The report goes on:
“Inflation has been below the Bank’s 2% target for nearly three years. Last year it was zero, the lowest since comparable records began in 1950 … Earlier this month, the Bank of England forecast that inflation would rise to about 2.7% by this time next year.”
As a result of the Brexit UK referendum and vote to leave the EU, the pound-to-dollar rate fell to a 30 to 31-year low. The Telegraph reports that:
“The last bout of volatility comes as investors switch their attention to the political risks associated with Brexit”.
It also reports that,
“the underlying cause of sterling’s fall is Britain’s woeful balance of payments position and the fundamental need for a lower exchange rate”.
Is it that, or is it Brexit, or both?
GQ reports that:
“financing a deficit of this magnitude does leave us reliant on the ‘kindness of strangers’ in the words of Mark Carney, Governor of the Bank of England”.
Sky News reports that:
“Sterling has dropped by more than 5% … against the greenback”,
in just one month and it is,
“also weaker against every other currency in the G10 group of industrialised nations”.
I was in India last week when the Prime Minister was on her visit. There were 100 rupees to the pound in June; there are now closer to 80 rupees to the pound. Sky News continues:
“Earlier this month, the deputy governor of the Bank of England, Ben Broadbent said that while the pound's plunge was helping support UK growth, Brexit uncertainty could cause an ‘insidious’ hit on the economy.
Mr Broadbent indicated that it was ‘likely’ inflation would rise over the Bank’s target of 2% over the next couple of years.
The EY ITEM Club”—
I declare an interest as I qualified as a chartered accountant with Ernst & Young and am an alumnus of the organisation—
“said the economy had been more resilient than expected following the vote to leave the European Union but this picture was deceptive.
It predicts inflation—which has been below 1% for nearly two years—climbing to 2.6% in 2017”.
There seems to be some consensus here.
The Telegraph reports that:
“UK is suffering ‘a slow motion slowdown’, says Carney”,
rather,
“than a sharp adjustment to the Brexit vote back in June”.
That is what the Governor of the Bank of England told the Treasury Select Committee. When asked if the fall in the pound was “welcomed”, Carney responded by saying, “It was necessary”, and that the sharp fall in the pound following the EU referendum will play a part in the necessary reduction in the UK’s large current account deficit, but he added that it is unclear if the decision to leave the EU means a sustainable size of UK current account has fallen.
This is much more complicated that a simple drop in the pound having an immediate effect, and I thank the noble Baroness, Lady McIntosh, for introducing this debate.
What about the impact on companies? The Guardian reports that:
“EasyJet suffered a sharp fall in annual profits—its first decline in six years—and expects a further drop this year after the budget airline was hit by the weak pound and was forced to cut prices”.
Similarly, the BBC reported that,
“IAG, the owner of British Airways and Iberia, says the weak pound cost it … £145m … in the third quarter of the year”.
According to Reuters:
“British bicycles to car parts retailer Halfords … said the fall in the pound following Britain’s vote to leave the European Union would remain a major challenge after it reported a 12 percent drop in first-half profit”.
Under the headline, “Sainsbury’s profits slump 10% as weak pound causes cost surge”, the Independent reported:
“The Argos owner said it would still reduce shop floor prices but warned the pound’s impact was uncertain as it prepares for more expensive imports”.
Of course, we have already heard in the debate about the battle between Tesco and Unilever over Marmite. Meanwhile, “Eurotunnel cuts profit forecast due to weak pound”, according to the BBC:
“The fall in the pound after the UK referendum on EU membership has forced Eurotunnel to lower its 2016 profit forecast by 4.5% … Shares in Eurotunnel … fell 30% after the EU referendum vote and are still 16% below pre-Brexit levels”.
We have to keep in mind that the biggest UK companies, those in the FTSE 100, derive an average of 75% of their revenue from outside the UK. My own company, Cobra Beer, is in a joint venture with Molson Coors. We manufacture in Burton upon Trent, in Belgium and in India, and we export from Burton upon Trent to about 40 countries around the world. There is no question but that the weaker pound should made our exports more competitive—but does that happen immediately in the real world?
Deutsche Bank, which has just produced a report, believes that, “A weak pound won’t boost Britain because ‘economics have evolved since the Victorian era’”, according to the headline of one media report, citing the bank’s note:
“The rapid drop in the pound’s value since the Brexit vote—around 15%—will hinder rather than help British exports and the British economy, according to Deutsche Bank. David Folkerts-Landau, Deutsche Bank’s chief economist, said in a note circulated … that ‘international economics have evolved since the Victorian era’ and as a result a fall in the pound won’t automatically make British goods cheaper to overseas buyers. The note is a stern rebuttal to Brexit supporters such as … Angela Leadsom who have argued that the weaker pound will actually boost Britain but encouraging exports. Folkerts-Landau … notes that 45% of Britain’s exports are services, which”—
as the noble Lord, Lord Skidelsky, said—
“are typically price inelastic—people are more driven by the quality of the service than its price. 60% of services exported are finance and business related”.
The problem here is that, as the note says,
“relatively speaking financial and other business services exports are likely to be the worst hit by a less integrated relationship with the EU”.
The article continues:
“What about manufacturing? ‘World trade no longer consists of final consumption goods being bartered for raw materials,’ he says. ‘Any economy’s manufacturing exports today contain a significant chunk of value that is added abroad’”—
as the noble Lord, Lord Skidelsky, said.
“The UK specialises in exporting products that have many component parts—nearly 30% of its manufactured exports are machines, engines, vehicles, and aircraft. To benefit from the fall in the pound the profit margins on these exports would have to be able to absorb the big increase in import costs of raw materials”.
The UK, as an economy that,
“adds a lot of domestic value to exports, and depends less on foreign parts, could theoretically benefit from a currency drop”.
So the simplistic thinking of someone such as Andrea Leadsom is not realistic. Our economy,
“adds only 64% domestic value to manufactured products. By contrast, Japan adds 82%, and the US adds 78% … In fact, Britain is getting worse at adding domestic value to products, as it moves towards becoming an ‘assembly line’ economy”.
The bank continues:
“The timing of Brexit is therefore unfortunate from a rebalancing perspective. The 1990s and first half of the 2000s were the golden age of globalization with global trade growing 400% over the period. Today, by contrast, the benefits of a free trade policy look less clear cut, and the UK may struggle to establish the free trade deals it needs to offset a loss of Single Market access”.
The GfK consumer confidence index edged down two points from the previous month to a reading of minus 3 for October, although it remains well above the minus 12 to which it slumped following the Brexit vote. According to the Financial Times, the Bank of England is “cautious” over the weak pound’s likely ability to boost trade, again reinforcing what I have just said. The paper reports:
“‘If devaluation was the great success factor for the UK economy, we should be the most successful economy on earth,’ said Andrew Sentance, senior economic adviser at PwC and a former member of the Bank of England’s Monetary Policy Committee, pointing to the fact that the pound was worth”—
the noble Lord, Lord Skidelsky, referred to this, although I am going to go even further back—
“$5 before the second world war but has depreciated steadily and significantly since, now trading at about $1.24. The bank’s current forecast is for exports to grow by 2 per cent in 2017 and 1 per cent in 2018, while imports will increase by 0.25 per cent in 2017 and then shrink by 1 per cent in 2018. But it noted in its latest inflation report that some manufacturers ‘are particularly integrated into EU supply chains’ and that sectors such as financial services would be ‘sensitive to any changes in trading arrangements’”.
As has been said, demand for services is,
“less sensitive to price changes than demand for exported goods … boosting net trade significantly will require companies to make investments—to ramp up production of exportable goods and services and to reposition themselves as producers of currently imported items”.
Britain’s CEOs, according to a Bloomberg columnist,
“have to see beyond the buddies act and look at cold reality. Trump’s election probably won’t halt the tide of investment being delayed or scrapped, which according to a CEBR/Hitachi Capital survey totals … $82 billion … since the June referendum. They still have unaddressed fears about the U.K. economy, access to the European single market”—
according to the latest survey, 92% of the British public believe we should have access to the single market—
“and the health of global trade … The U.K. economy is forecast to slow down next year while inflation is set to surge … Of the surveyed business sectors delaying investment, the top four are IT, real estate/construction, media and finance”.
We need clear direction on policy, as,
“there’s not much wriggle room … While Farage and Trump arm-in-arm may cheer Brexit’s more zealous supporters, there’s little there to put a smile on CEO faces”.
Under the headline, “The Brexit economy: falling pound and rising inflation fuel fears of slowdown”, the latest monthly Guardian analysis of a dashboard of data points to the UK economy shows that, for October,
“four of the eight categories have performed worse than expected”.
This is not encouraging. According to the paper:
“Writing in the Guardian, a former member of the Bank of England’s Monetary Policy Committee, David Blanchflower, says Britain is heading for a ‘Brexit tsunami’”.
The paper also reports:
“Andrew Goodwin, lead UK economist at the forecast group Oxford Economics, also points to looming upward pressure on prices … Meanwhile the public finances worsened. The government had to borrow £2bn more than expected in September to balance the books … The International Monetary Fund is predicting the UK will be the fastest growing of the G7 leading industrial countries this year, with growth of 1.8%”,
although the IMF also,
“accepted that its prediction of a post-Brexit vote financial crash has proved overly pessimistic”,
which is encouraging.
The noble Lord, Lord Skidelsky, spoke of the balanced economy and of manufacturing going down from 30% to 10%. However, the Prime Minister has an industrial strategy. We are the second-largest recipient of inward investment in the world. One of the reasons for that is the respect for our economy, our rule of law, our institutions and our democracy. But since 23 June there has been a huge lack of confidence in this country because of the uncertainty. We have lost our AAA rating, and the Chancellor has a huge opportunity in the Autumn Statement to lower other taxes, in the way that corporation tax has been, to incentivise exports. I disagree with the noble Lord, Lord Skidelsky, in that I do not think we should tax imports but incentivise exports. We should continue to encourage thriving in a global economy.
I agree with the noble Lord, Lord Paul, that we need to invest in infrastructure. Crossrail is fantastic. Heathrow is great news, although I believe Gatwick should also have been announced. All this will give confidence because the whole world does not want us to leave the EU. When I was in India, no one I spoke to—the Indian Government, civil servants, businesspeople—wanted us to leave the EU. We have to give them confidence.
As an economy, we have to be able to adapt or die. We have to invest much more than we do in our higher education and in our R&D and innovation. We need to encourage international students and academics. We need to appreciate the EU labour that we have, which benefits our economy. Then, if we have a balanced, flexible, adaptive, productive and competitive economy, we can continue, with 1% of the world’s population, to be one of the five largest economies in the world.
Baroness Kramer (LD)
My Lords, this has been an absolutely fascinating debate, with a wide range of views on a wide range of topics. I join in congratulating the noble Baroness, Lady McIntosh, on obtaining the debate.
I begin by disagreeing very much with the noble Lord, Lord Vinson. I feel strongly that devaluation as a route to export increases is a dangerous one to take. The noble Lord, Lord Skidelsky, underscored this, as did the noble Lord, Lord Bilimoria. If we look at our experience of the fairly sharp collapse in the pound since June, we have seen very little increase in exports from the UK. Frankly, most economists are surprised at the relatively modest level of export increases.
Lord Vinson
I apologise for asking the noble Baroness to give way so early in her speech, but clearly you cannot expect manufacturing, where it takes three or four years to introduce plant and capital and get people trained, suddenly to fill the gap. It will take five to 10 years for us to rebalance our economy. It is surprising that anything has happened at all in a couple of months.
Baroness Kramer
I point out that the noble Lord is assuming a permanent devaluation in the pound to the current level. I want to talk for a moment about the consequences that that would have, which was underscored by the noble Baroness, Lady McIntosh, for the standard of living in this country and the experience of very many people if we continue to have an economy where growth is so low that sterling remains at the current level.
As I say, there has been no dramatic pick-up in exports, and looking at devaluation as a route to increasing exports is a very dangerous one. At best, it has a short-term benefit, and over the long term it imports inflation. We have already seen significant rises in fuel prices, and ordinary people are feeling that. At the moment, though, people are being protected from large increases in retail prices because most major companies have foreign exchange hedges in place to get us at least through the Christmas season and into the early part of the new year. Some industries have not been in that position; we have heard the noble Lord, Lord Bilimoria, talk about the profit warnings that have come from the airline industries, from some of the retailers and, increasingly, from a large number of British companies across the board.
However, it is the small companies that were unable to put hedges in place that are particularly affected. A number of speakers have talked about that particular difficulty. Not only do the banks make hedging pretty much unavailable, it is also exceedingly expensive. I am very worried—I think the noble Lord, Lord Carrington, made this point—about the impact on small businesses. I have talked recently with some small chocolate manufacturers, who said that their import prices are already pushing them to the point where they think they can make it through the Christmas season without pretty significant increases, but they do not think they can make it into the new year season. The consequences for them are significant. I also happened to talk with some of the small wine shops that one sees. One could say that wine is an exotic product, but an increase of near on 20% for many of them on the products that they import is now putting them in a situation where even on modestly-priced wines, which are their meat and drink and their main source of trade, they are looking at having to pass on those increases.
What I have found fascinating in talking to these people is that, if one says, “What about substituting a British-made product?”, first, as others have said, frequently there are not many of those available, but, secondly, British suppliers are using this as an opportunity to increase their prices. Many have been feeling pressure on their profit margins for a long time, and the rise in the cost of imported goods is now putting them in a position to be able to increase their prices as well. So the knock-on effect for the consumer is genuinely a very serious one.
If anyone took a look at the survey done by the HR managers’ group that was made available about a week ago, they will have seen that overall, looking broadly at the economy, the general take is that inflation will be running at close on 3% next year, as several people have said, but on the basis of the surveys the expectation is that the average basic wage settlement will go up by only 1.1%. That is huge pressure in the pocket for ordinary people who have already gone through many years of austerity, and the consequence is really unpleasant and, frankly, very serious.
A big discount on sterling means there is almost a January sale on the price of buying a British company, whether you buy it on the stock market or buy it out from its current private owners. With a 15% discount, we would expect to see a large number of acquisitions of British companies taking place, but we are not. We are seeing some large and important investments—very often, ones that have been planned for a long time and are related not to price but much more to a global strategic move by particular companies. However, I have been looking closely at the fintech industry, where there has been a complete collapse in venture capital and equity available for UK-based fintechs since Brexit. Global investment has gone up significantly; in Europe, the biggest beneficiary has been Berlin. In the UK, though, we have seen that number fall very sharply. Anyone who wants more information about that should take a look at today’s Financial Times. That is just one of many reports coming in from that field.
The noble Lord, Lord Skidelsky, talked about the future. We have to have an economy that has many more roles than just being a financial services provider. Fintech—indeed, tech generally—surely has to be at the cutting edge of that. These are brand-new industries in an area where we have established ourselves as a leader, based on our brilliant universities, our experience in life sciences and our capacity in financial services. In all those areas, we have made extraordinary headway in being at the cutting edge of innovation. Yet this is the very sector that is suffering from a lack of interest from investors at a time when you would have thought they would say, “It’s exceptionally cheap. If we’re ever going to get in, this is the day to do it”. That is largely because of Brexit and, frankly, that worries me because it is the future that is being put at risk.
If British companies themselves thought the future was going to be so exceptional and a great time to advance exports, we ought to be seeing investment rolling into those companies. In fact, we have seen that British businesses have ditched about £65 billion of investment since June. Planned investment is down extremely sharply, some of it perhaps temporary and due to uncertainty but in some cases these are already permanent decisions to take the investment elsewhere. So when people talk about devaluation as offering a huge potential to restart the economy, spark it off and lead it into being an export-led economy, we need to look much more closely at what is actually happening.
Many, including the noble Lords, Lord Haskel, Lord Skidelsky and Lord Bilimoria, have pointed out the integrated nature of our economy today across the EU. I often suspect that, because we never really had any kind of political integration, people think that in the same way the business world stayed distinctly British, French, German, Spanish, Greek or whatever. In fact, what has happened in the last 40 years is that in a sense the business world—the economy—has become thoroughly integrated. It is almost like a piece of crochet; it is almost impossible to separate out the varying strands because it is now such a complex web. I think that is what the Government are finding as they go through the experience of trying to work out how they are going to deal with Brexit: what they thought would be very simple—say, identifying a British company that does imports, exports or whatever else—is in fact not. At every level, big, medium and small, we are in an entirely intermeshed world that is extremely difficult to identify. When you have something such as devaluation, it rebounds quite painfully on many aspects of that business network.
Others have said that one of the good things about devaluation is that it will encourage European workers to go back home, because their remittances will be worth less in their home currency. That has not happened; in fact, we have had the exact opposite, with employers desperately seeking to bring in European workers before what they think will be a gate that slams closed at the point where we actually exit the EU. So we have the opposite effect of the EU threat bringing in workers. As others have said, we are so close to full employment in the UK that that is not surprising, but the hope that devaluation would somehow send people out of the door has, I am very pleased to say, not actually transpired.
When we have inflation brought in through the increased price of imports, what will be the reaction of the Bank of England and the governor? Undoubtedly, at some point, interest rates will have to rise. Some have said that a rise in interest rates will be very good for the economy, but, my goodness, the impact on people who have mortgages, particularly when we are not getting increases in wages, will be really difficult. We are talking about people who have gone through years of austerity now beginning to face inflation in the price of products, then being hit by interest rates impacting on mortgages. Higher interest rates at a time when we need greater economic growth to take ourselves through a period of extraordinary uncertainty and disruption and to try to encourage companies to make a base here seem extraordinarily difficult.
So far, in my view and that of many others, Governor Carney and the Bank of England have managed this process with something of the skill of a tightrope walker, but it will be extremely difficult going forward. I have sympathy with the noble Lord, Lord Carrington, in calling for greater forward guidance to deal with some of the uncertainty. The problem is that I do not think that even someone with a crystal ball could give much guidance at this point, when it seems that the only thing that is expected is the unexpected and a sense of uncertainty is now so deep and prevailing that most forward guidance could not have a high level of certainty attached to it.
I also agree that it is time that UK Export Finance took on some of these issues for smaller companies trying to deal with both exchange rates and simply getting paid for their exports, as they are challenged to try to export much further afield. There is a very important role for UK Export Finance to play to get the banks back on the field in the way that they used to be until about 10 to 15 years ago.
In this area of uncertainty, which the noble Lord, Lord Paul, underscored, the most important thing that the Government could do is provide us with some clarity. By clarity I mean laying out the priorities—the principles on which they will negotiate our exit from the European Union. Companies, instead of finding themselves completely in the dark and having to make decisions on a worst-case scenario because that is all that is left to them to work with, could be provided with that kind of clarity. Will we be in the single market? What is our attitude towards the customs union? What will we do about migration and access to workers, both skilled and unskilled? We need answers; businesses need answers; and with that they could get at least a measure of certainty at a time when uncertainty is being reflected not only in the travails of quite a number of businesses but in this weakness that has driven down the value of sterling.
Lord Davies of Oldham (Lab)
My Lords, I join colleagues in congratulating the noble Baroness, Lady McIntosh, both on securing the debate and on producing such a challenging and feisty speech to open it. I had worried that we might be revolving around some narrow technicalities with regard to the exchange rate, but she set the tone by emphasising the impact on the economy and wider society of the depreciation that we have gone through in the past few months. In doing so, she indicated that the situation which confronts us is a real challenge to the Government.
There is no doubt that the floating exchange rate is not an element of policy for government at present. Both the Minister and I recognise that the floating exchange rate is the basis on which the economy revolves, and it is not for the Chancellor or any politician to fix it but for the Governor of the Bank of England and his colleagues. This might suggest that the emphasis on the exchange rate may be misplaced, particularly as a considerable number of specialists have emphasised that the depreciation that has gone on thus far is long overdue. The International Monetary Fund thought that we were due a considerable reduction in our exchange rate some time ago. That is now what we are faced with, but the noble Baroness, Lady McIntosh, said that there were consequences of that—as she mentioned, for agriculture and the food industry in particular—and that contained within the situation was the potential for substantial inflation. I want to comment on that in more detail in a few moments.
A whole range of significant external events impact on the economy, but I do not think that any measure up to the impact of the nation’s vote to withdraw from the European Community. There is no doubt that that is what this depreciation in the currency reflects the most—a point that the noble Lord, Lord Bilimoria, stressed. The impact on companies is of course varied, but we should bear in mind—the noble Lord, Lord Bilimoria, stressed this the most, but he was not the only one—when we talk about our manufacturing industry and our industrial capacity to take advantage of a lower exchange rate and boost our exports, just how complex the ownership of our industry is now and the different factors that come into play. It is not just the British exchange rate which dictates the costs of British companies, given their extensive component parts, often foreign-owned, all building up to the product that they seek to take to the market.
This is not the time for me to emphasise from this Dispatch Box the range of policies which we think the Government should adopt. We have the advantage of hearing from the Chancellor next week and we will have a full debate on the economy subsequently. That will be the time when we will test the Government’s intent against the challenges which they face.
My noble friend Lord Haskel emphasised an important point in this debate. It was a Labour Government who placed responsibility for the bank rate on the Bank of England. It is therefore not immediately amenable to action by government, but we know that in fact the Government have to act against that background for us to have a hope of taking advantage of the depreciation in the rate.
But the problem is surely something on which the noble Lord, Lord Paul, put an optimistic dimension when he commented on the position of India. The noble Lord, Lord Bilimoria, who shares some background with him in those terms, was a little more pessimistic. I do not think that, when the Prime Minister visited India, we were able to derive enormous expectations from that. Yet clearly India is an important trading market, and one in which we would hope to realise greater potential. Indeed, we must have greater success with the Indias and Brazils of this world to make up for the very severe changes affecting our major trading market—the European Community.
I know that the Government are reluctant to declare what their hand will be in the negotiations; some have been unkind enough to suggest that that is because they do not have a hand to play—or at least, not one about which they are managing to convince even their own Cabinet with any degree of unity. None the less, it is clear that we are going to have tough negotiations with Europe. We cannot expect that the Europeans will approach our requirements with any great empathy; indeed, they will certainly approach them in terms of their own interests. We all recognise that trade flows both ways, but we are still likely to have great difficulty; consequently we will need many more new trade deals—those which formerly were in the framework of the European Community but which the United Kingdom will now have to negotiate for itself.
That is a pretty challenging perspective in the present world position, but if there is another dimension that might make this situation even more difficult, it is the result of the American presidential election. We all, particularly those of us who have been involved in electoral politics in the past, know the difference between electoral rhetoric and effective action by Governments. Nevertheless, it is clear that the president-elect of the United States has very strong protectionist leanings. He won a lot of votes for suggesting to those who thought they had lost through the development of international trade that it would be America first—and America successfully protected. He identified, as his major element of protective activity, China, which he regards as a manipulator of exchange rates. That should send a chill down the spine of everyone concerned about the development of the British economy. The prospect of our being involved in worldwide negotiations of the greatest significance to secure markets in areas where the largest economic unit in the world, the United States, is arguing the case for protectionism is a profound worry to us all, and shows the dangers we face.
We can face these consequences rather better than we did in the 1930s, when states that engaged in individual protectionism reduced world trade and industry, and increased unemployment, until the only stimulus a nation could produce in response to the collapse of world trade was to spend huge amounts of government money on armaments and the development of the Second World War. That was the greatest factor in reducing the huge levels of unemployment in the 1930s. We can learn lessons from that period and we can avoid that, but it means that the Government must address themselves with great skill and commitment to the negotiations that are necessary.
Another element, which the noble Baroness, Lady McIntosh, introduced first but on which others have also commented, is the threat of significant inflation. We have, of course, had a period in which inflation has been negligible. But it is clear that, as the noble Baroness, Lady Kramer, emphasised, two years or so from now we shall see quite a significant feed-through of external costs into our economy and the development of inflation.
One responsibility that the Government must sustain over this period is clear. The people who spend the greatest percentage of their income on food are the very poor. Those who are low-paid or on benefits spend £1 in every £6 on food. The Government are now pursuing a four-year squeeze on benefits. They cannot possibly sustain that position against rising costs. Otherwise, they will be saying that those who have borne a very heavy burden since 2008 and the financial crisis—no wage increases, seeing others take their jobs and a massive reduction in benefits—will have to bear the largest burden of what will feed through in inflation in 18 months or so. Surely that cannot be sustained.
The debate has ranged widely. It is a precursor to the major debate we must have on the economy shortly, and it has developed from one on the exchange rate to one on the fundamentals of the British economy. I am grateful to all noble Lords who have participated in it.
Lord Young of Cookham (Con)
My Lords, let me start by echoing the thanks of others to my noble friend Lady McIntosh for securing this debate. Initially I was rather worried about the idea of a two and a half hour debate on an issue on which, as I shall state in a moment, the Government have no policy—but the quality of the contributions has allayed that concern. There have been some outstanding contributions, including the speech that introduced the debate.
The contribution by the noble Lord, Lord Skidelsky, took me back more than 50 years to economics tutorials in Oxford at the feet of Sir Roy Harrod. We also had a heroic challenge to current economic orthodoxy from my noble friend Lord Vinson. There was not a lot with which I agreed, but I did agree with what he said about infrastructure bonds, and he will be pleased that the Government already provide Treasury-backed guarantees for infrastructure bonds and loans. They can provide up to £40 billion-worth of guarantees, and have already supported 10 projects with a total capital value of around £23 billion. So even if I do not follow my noble friend down some of the other avenues he suggested, I hope he will take encouragement from that.
One message that has emerged from the debate is that things are not simple. The straightforward relationships between currency values and imports and exports we may have learned about in economics textbooks simply do not hold today. A number of contributions by my noble friends, and by noble Lords on all sides, have explained how, with complicated supply chains, the responses to fluctuations are not nearly as straightforward as they might have been. We also had some very helpful contributions to assist my right honourable friend the Chancellor of the Exchequer, as he puts the final touches to his Autumn Statement, and some advice to the Government on more clarity as we approach our negotiations on exiting the EU. But I am grateful to everybody who has contributed to the debate, and I shall try to pick up some of the points.
Exchange rate movements, the subject of the debate, attract a great deal of attention and are a topic of economic importance at the moment, both on a national level and for people in communities, as my noble friend emphasised. She mentioned the rural areas of North Yorkshire, which she knows so well. Changes in the value of any currency take place, of course, due to a wide and complex range of factors, both domestic and international. The fluctuations that we have seen following the outcome of the US election last week, not only in the dollar but in the euro, pound and peso in particular, are a clear case in point. It is no surprise that, since our decision to leave the EU on 23 June—one not predicted by the markets—the value of the pound has fluctuated. As of today, it is 15% down against the dollar compared to the start of the year; many observers attribute this to the markets’ response to the inevitable uncertainties during this period of adjustment.
My noble friend Lord Carrington explained how larger companies can hedge against currency fluctuations, but raised the issue also touched on by the noble Baroness, Lady Kramer, about the problems confronting smaller companies that cannot take the same precautions. I shall certainly pass that on to my right honourable friend in the Treasury.
As noble Lords will be aware, it is a long-standing Treasury policy that we do not comment on the level of or fluctuations in the value of sterling, which is allowed to adjust flexibly in response to economic conditions and market forces, as the noble Lord, Lord Haskel, described. Neither the Government nor the Bank of England set a target for the sterling exchange rate, which is a reflection of the UK’s long-standing economic framework—business as usual, as the noble Lord, Lord Paul, mentioned. Our monetary policy, which is set independently, has free-floating exchange rates and free movement of capital, which allows us to focus on targeting inflation. The UK’s inflation targeting framework prioritises price stability, which is a fundamental pillar on which our economic prosperity is based. The noble Lord, Lord Haskel, reminded the House of the risks of fixing the value of our currency. Noble Lords may recall the ERM crisis of 1992, where sterling was pegged to the deutschmark, only to collapse in the face of currency speculation. Noble Lords with longer memories may remember the problems that Harold Wilson had back in the 1960s, to which my noble friend Lord Vinson referred.
But although we do not set any targets for the value of sterling, both the Government and the UK’s financial supervisory institutions monitor closely the effects of any fluctuations in sterling on our economy. The noble Lord, Lord Bilimoria, for example, highlighted the impact that the fluctuations have on particular industries, such as the civil aviation industry. He also made the point that the impact on companies in the FTSE 100 has been slightly more uplifting because of the amount of overseas earnings that they generate. The Monetary Policy Committee took action in August, for example, to give an important monetary stimulus package which helped to ease financial conditions after the referendum, keep consumer confidence high, and return inflation to its target sustainably. The noble Lord, Lord Davies, mentioned inflationary pressures ahead; the MPC judged that there may be inflationary pressures ahead, as the depreciation of sterling may lead to a rise in the prices of imported goods and services, given our globally integrated supply chains. He made a point about the impact that that has on those on low incomes. As for the MPC’s guidance, I shall certainly see that it reads the speech of my noble friend Lord Carrington on his view of how the guidance might be improved.
My noble friend Lady McIntosh highlighted today the impact of the depreciation of sterling on prices, with a seasonal reference to mince pies as one example of the potential impact this could have on household budgets. Six mince pies sounded rather a lot to me, but it was a valid point that we need to keep an eye on the impact on the fluctuation of food prices. The MPC has been clear that the best course is to focus on supporting employment and output, and therefore tolerate a temporary period of above-target inflation, which is expected to return to target in the medium term. In the meantime, the MPC will closely monitor inflation expectations and respond if necessary. It is working closely with the Financial Policy Committee to ensure that any financial stability implications of our monetary policy have been considered and managed. The FPC, for example, has worked to support lending in our economy through this period, by reducing what is known as the countercyclical capital buffer to zero, allowing banks to draw upon the capital buffers they have built up.
It is also, of course, the Government’s role to monitor any economic impacts of the lack of sterling on individuals and businesses across the country. My noble friend Lady McIntosh raised the example of the impact of exchange rate movements on farmers. I agree with her that farmers will see the cost of fertiliser and other tradable inputs rise, as a result of the weaker exchange rate, but the impact on other inputs is more lagged, and at the same time they are seeing higher product prices, as well as a 16.5% increase in the sterling value of CAP subsidies—a point made by the noble Lord, Lord Skidelsky—for the 2016-17 payment window, compared to the previous year. So while I agree that a weaker exchange rate is not one-way traffic for farmers, I am sure that overall the farming sector will see benefits from recent movements in the exchange rate.
The Government recognise the impact on the agricultural sector of our withdrawal from the European Union, which is why we have announced that it will receive the same level of funding that it would have received under CAP until 2020. The noble Lord, Lord Skidelsky, made the point about the rising cost of our EU contribution, which we take on board. I agree with what my noble friend Lady McIntosh said on agriculture. We should try to be more self-sufficient and grow more at home, driving up from 62% our current level of self-sufficiency.
My noble friend touched on the impact on savers and pensioners, as did other noble Lords. The Government are committed to supporting savers of all income levels and at all stages of life by reducing the taxes on savings. Savers have benefited, for example, from the new personal savings allowance of up to £1,000 for basic rate taxpayers and up to £500 for higher rate taxpayers. Throughout this period of economic adjustment, we will continue to plot the same course that we have taken from the start—namely, to make sure, as the Prime Minister has reaffirmed repeatedly, that our economy works for everyone.
I return to the question from my noble friend on how fluctuations in the pound have affected our economy since the referendum. Although this is a period of adjustment, there are none the less some heartening signs of the resilience of our economy that we should take note of. I was struck by what the noble Lord, Lord Paul, said about how change brings opportunities. Our financial markets, for example, have continued to function effectively. Employment remains close to a record high, with total pay up, too. Our first official growth estimate in the post-referendum period shows an increase of 0.5% in our GDP for the third quarter of 2016, and there are additional signs of resilience in other data that have come through in the last four months.
Consumer confidence, although it fell in July, has since recovered, and last month returned to the levels we had seen just prior to the referendum. Retail sales have actually grown 1.8% in the three months to September. There are also positive signs that the fall in the pound may have helped to revive tourist spending in Britain. I am not sure that anyone comes to the United Kingdom for the weather, as implied by the noble Lord, Lord Skidelsky, but I think that I read that this is the warmest year that there has been for some time—so maybe the gap between us and the Mediterranean, where the noble Lord may prefer to take his holidays, is beginning to narrow. But the downside is, as my noble friend Lady McIntosh, said, that if we go to the Mediterranean we may be able to buy slightly less abroad. I hope that the impact of a lower pound may help tourist spending in north Yorkshire, which my noble friend directed our minds to today and which I am sure is a fantastic part of the UK for tourists to visit. I understand that Yorkshire’s annual White Rose Awards will take place on Monday in Harrogate.
To return to our theme, the latest manufacturing PMI data also show some positive news, with the suggestion of increased activity in the manufacturing sector, which some have attributed to the depreciation in sterling. Indeed, some exporters are reporting fuller order books. It may be the case, as some in this debate have suggested, that the lower value of the pound could lead to a boost here. But here I agree with what a number of noble Lords said about being cautious about oversimplification. I think that it was the noble Lord, Lord Skidelsky, who referred to the global financial crisis of 2008, when sterling depreciated by 25%. Yet, with weak global growth, UK exports did not actually expand markedly, as exporters boosted their profit margins instead of their market share. Of course, the ability to boost one’s exports depends on the financial position of those countries to whom one is exporting; if they are in a downturn, it obviously makes it more difficult.
Another point that has been made in this debate is that exporters compete not merely on price but on quality and reputation. These are particularly crucial points when it comes to the service industries. It could also take time before demand catches up with our more competitively priced exports—a point made in an intervention by my noble friend Lord Vinson—and as businesses adapt their processes to sell more overseas. In the meantime, the Government will continue to help our businesses, including our agri-food sector, to boost exports. But I have to say to my noble friend—or maybe it was the noble Lord, Lord Skidelsky, who put the position forward—that import controls are not on the agenda.
I will touch on one or two of the other points raised in this debate. One concerns inward investment levels—and investment levels generally—during this period of adjustment and low interest rates. We might expect some potential impact as the UK adapts to new relationships with the European Union and the rest of the world. Anecdotally, as we have heard in the debate, it has been suggested that some businesses are waiting to see what happens in the negotiations with the European Union. None the less, thanks to the combined strengths of British businesses and our wider economy, we remain an attractive place to do business.
Following the referendum, we have continued to see investment into the UK. Immediately after the referendum, for example, we saw the largest-ever investment from Asia into the UK, as SoftBank invested £24 billion into ARM Holdings. Large car manufacturers have expanded their investments: Jaguar Land Rover announced a £500 million expansion in Coventry, Honda confirmed a £200 million investment in its plant in Swindon and recently, of course, we had the Nissan Motor Company announcing that both the next Qashqai and X-Trail models will be produced at its Sunderland plant, which will be expanded through new investment to be a super-plant manufacturing more than 600,000 cars a year. We have also seen investment in the pharmaceutical industry.
Lord Vinson
Now that he is on that subject, I wonder whether the Minister would be good enough to answer a question. The Prime Minister has shown considerable concern over the easy way in which our companies can be taken over. It has been suggested, and I put it to him, that the public interest clause should be reinserted as part of the remit of our new competition commission. Would he like to think about that?
Lord Young of Cookham
My noble friend urges me to go way beyond my negotiating brief at the Dispatch Box this afternoon, but I will certainly convey his suggestion to my right honourable friend the Chancellor of the Exchequer, or indeed the Prime Minister. I know that there has been anxiety about the ease with which UK companies can be taken over, but I make no commitment whatever in that respect.
I was saying that GlaxoSmithKline recently announced £275 million of new investment in UK manufacturing sites and £540 million in a new company in partnership with Verily Life Sciences. Then came Google’s decision a few days ago to invest in Britain and create 3,000 jobs, which is a big vote of confidence in the UK’s leading position as a global tech hub. So, to put it in context against some of the rather depressing predictions we have heard, we have seen that many companies continue to value the opportunities for business in the UK, which last year saw business investment grow faster than in any other G7 country outside the US—and that should not come as a surprise to any of us.
My noble friend touched on infrastructure spending, which is a really important priority. We have invested more than a quarter of a trillion pounds since 2010 and we are committed to spending more than £100 billion on infrastructure projects by the end of this Parliament. This will contribute to everything from big transport projects such as HS2, to rolling out superfast broadband and improving our flood defences—and I will ensure that the Chancellor of the Exchequer takes on board the proposal made by my noble friend about funding defence protection schemes. It is worth noting that we are investing more than £2 billion in 1,500 flood defence projects to protect our homes and businesses. We are also committed to developing the skills that our businesses need, including in the rural sector.
In conclusion, my noble friend Lady McIntosh is right to draw our attention to the fluctuation in the value of sterling and the effects it may have on people and businesses in this country, particularly in rural communities. The Government share her view on the importance of remaining vigilant to any potential impact of movements in the sterling exchange rate. We will continue to monitor developments closely, as will the independent Bank of England. At the same time, we will continue to use all the tools at our disposal to make sure that our economy is working for everyone across the UK and across industries. This means taking further steps to improve our productivity and to promote economic growth in communities in every part of the UK. It is this approach which will always inform this Government’s work to strengthen the British economy—including, of course, when the Government set out their fiscal plans in the Autumn Statement next week.
I conclude by thanking all noble Lords who have taken part in this debate.
Baroness McIntosh of Pickering
My Lords, I will take this opportunity to thank all noble friends and noble Lords on both the Front and Back Benches who have contributed to this wide-ranging debate. I thank my noble friend the Minister for his very elegant summing-up of what has been an excellent debate. I pay tribute to my professor at Edinburgh University, Professor Khan, who taught me the fundamentals of international and economic law—although I did not believe that I would be jousting with the noble Lord, Lord Skidelsky, who is obviously a leading expert on the economy.
I think that I am going to have to invite my noble friend Lord Vinson to repair with me over coffee to debate some of these issues, because I believe that we will not understand what the implications of Brexit will be until we finally leave and see what access, if any, we have to the single market and whether we remain part of the customs union or rely on free trade agreements. Who can forecast what the impact on the economy will be at that time? My plea to the Government is that we remain an outward-looking, free-trading nation looking to forge new relationships at that time.
I take comfort from what my noble friend Lord Young said as regards trading bonds—the government-backed bonds—which I hope may release more capital spending on limited capital projects in flood-defence areas. My only hope is that the period of adjustment to which my noble friend referred will be short-lived and defined and that we will not go down the path—sadly recommended by my noble friend Lord Vinson and, I think, the noble Lord, Lord Skidelsky—of protectionism. I believe that we have to be an outward-looking, free-trading nation and be confident going forward.
Motion agreed.
Child Poverty
(7 years, 5 months ago)
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Lord Bird (CB)
My Lords, I remind noble Lords, if they were not aware of it or have forgotten, that I came into the House of Lords because of my work in and around dismantling poverty in people’s lives as much as possible. I am back here again banging the old drum on what we can do about poverty. The longer I am in the House, the more I realise that poverty is at the base—I hazard a guess here—of about 70% of our work, perhaps even more. The laws of unintended consequences mean that changes we made in the economic system 10, 20 and 30 years ago are coming back to bite our posterior.
I say once again that I am here to dismantle poverty. When I am approached by many noble Lords to get involved in defending the poor and tackling the problems that they face, I say, “I am sorry, you are doing a pretty fine job, but I do not see many people wanting to prevent Johnny, currently in school, from selling the Big Issue in 20 years’ time”. I do not see many of the difficult issues of finding the roots of poverty and ways to dismantle its sources and causes being tackled. One of the reasons for that is because there is a lot of confusion around poverty. The biggest confusion arises from the fact that people do not realise that there are two kinds of poverty. There is a poverty of spirit and opportunity, a material poverty and a poverty of social literacy—all those sorts of things. However, there is another kind of poverty. My uncle, an Irishman, who died at the age of 102 in Notting Hill, came over here in 1936 and worked as a postman and a fireman and lived all his life in a kind of poorness. When he came over, he did not have two pennies to rub together. He looked after himself, his wife and his children and has endowed his grandchildren in some senses. He was poor but he never lived in poverty. He went to church and participated in the British Legion, went on holiday and did all sorts of things. He was a poor man who developed the ability, at home in Ireland on the farm, of making a very small amount of resources go a long way. That is poorness. Then there is poverty. Unfortunately, we have seen the demise of poor people who know how to make ends meet, as opposed to the people who are lost in the fog of poverty.
I am being very personal here. My uncle, Paddy O’Regan, had one child, and that child had one child. He lived within his means. If he could not afford something, he did not have it. We mistake that for poverty but it is really just a question of being poor. Unfortunately, his sister-in-law—my mother—had six children and always lived beyond her means. She lived in a miasma of poverty, never participated in democracy or did anything other than her job as a night cleaner, and her day job, and take her six children to school. She lived in absolute poverty, which was made even worse by her inability to cook. She was one of the world’s worst cooks; she could make nothing out of something. Those are the two sides of an Irish family who came over here.
In this debate about dismantling poverty and finding the roots of poverty, I want to focus on the dignity of people who get out of poverty. A friend of mine from Jamaica came over with his mother on the “Windrush” and now owns enormous tracts of Norfolk. He educated all his children and knew how to live within his means. He was an example of the old-fashioned poor. We have created an enormous number of problems through destroying people’s ability to get out of poverty. If the parents of Mr Ed Miliband, who arrived here in 1944 as refugees from Nazi Germany, Poland, or wherever it was, had been given a council house and money on which to live, would he have ended up running the Labour Party? Generosity can cut off people’s opportunity to morph their way out of poverty. That is one of the reasons why we need to look very carefully at what we can do to help the poor. We need to help them by enabling them to get out of poverty. However, there are too many stumbling blocks to doing that, the biggest of which is the fact that 30% of our schoolchildren go through school and come out the other end but you would never think they had been to school. There are people like myself— I learned to read and write in a boys’ prison, as I have said before. Those children go on to form 80% of our prison population and 50% of our long-term unemployed, fill up the hostels and sell the Big Issue. Some 80% to 90% of them come from a failed background of poverty because they failed at school.
We need to do something about the roots of poverty rather than deploy a scattergun effect of initiating a wonderful project here and a wonderful project there which do not converge to dismantle poverty. If we do not do that, we will be having this discussion for many decades. When nearly 3 million children in this country live below the poverty line, we have to do something about poverty, but we must fight it philosophically, culturally and socially. We need to measure the effect of social security in enabling people to rebuild their lives. Social security is one of the most wonderful ways of helping people through difficult circumstances and enabling them to move on but we must not put them in warehouses, as it were. We should not do what was done to some members of my own family—I will not mention them because they will probably get their lawyers on to me—some of whom have not worked for 30 years and whose lives are getting worse and worse because somebody decided way back in the time of Margaret Thatcher that it was all right to open the sluice-gates and allow people to get benefit without checking whether it was any good for them. Those are the kind of things that we need to talk about.
In my time in the House of Lords, I am desperate to get to the roots of poverty. However, if you scratch the surface of the average Member of the House of Lords, you will probably find that earlier generations of their families had to work very hard at the coalface. Somebody suffered and burned the candle at both ends. I have a problem in that I sometimes think that we do not want the poor to burn the candle at both ends because it is a safety risk.
The Earl of Arran (Con)
My Lords, children sleeping on the floor, sharing a mattress and not having enough food to eat—this is not a case history from Victorian times but a description of the very real lives of many children living in 21st-century Britain. Our rich and affluent capital city has one of the highest child poverty levels in the UK, along with Birmingham and Manchester. Currently 3.9 million children live in poverty in the United Kingdom. This means that children are considerably more likely to live in poverty than adults. It is not necessary and not acceptable, and we can do something about it.
Growing up in poverty can blight children’s well-being and their future life chances. For example, children living in poverty are more likely to have poor physical and mental health and are less likely to achieve their potential at school and in employment. Children experience poverty differently from adults. An adult can temporarily fall into poverty, but poverty in childhood can last a lifetime. Child poverty and inequality can be passed on to future generations and lead to a cycle of deprivation for many families.
The effects of child poverty are enormous. Poverty damages: it damages childhood, it damages life chances, and it damages us all in society. We all want our children to be able to enjoy their childhood and have a fair chance in life to reach their full potential.
Children from poorer backgrounds lag behind at all stages of education. According to Department for Education statistics, by the end of primary school, pupils receiving free schools meals are estimated to be almost three terms behind their more affluent peers. By the age of 16, children receiving free school meals achieve 1.7 grades lower at GCSE.
Poverty is also associated with a higher risk of both illness and premature death. Children born in the poorest areas of the United Kingdom weigh, on average, less at birth than those born in the richest areas. Children from low-income families are more likely to die at birth or in infancy than children born into richer families. They are also more likely to suffer chronic illness during childhood or to have a disability. Poorer health over the course of a lifetime has an impact on life expectancy: professionals live, on average, eight years longer than unskilled workers.
Children living in poverty are almost twice as likely to live in bad housing. This has significant effects on both their physical and their mental health, as well as their educational achievement. Fuel poverty also affects children detrimentally as they grow up. Low-income families frequently have to make a choice between food and heating. Children from low-income families often forgo events that most of us would take for granted. They miss school trips; they cannot invite friends round for tea; and their parents cannot afford a one-week holiday away from home.
My family has had the great privilege to be involved with a wonderful charity, the Children’s Country Holidays Fund, since its inception over 130 years ago. Like many other charities, we aim to give disadvantaged children the opportunities and experiences that they would not normally have access to. It is very humbling that over those years we have been able to send away more than 2.5 million children from the Greater London area. It is a sad indictment on society that the plight of many of the children whom we support echoes that of the children whom the charity supported in Dickensian London.
However, charities cannot do it all and, with commitment and action, child poverty can be ended. We need a benefits system that recognises the cost of a child; a childcare system that enables parents to work and children to thrive; a labour market that makes work a route out of poverty; and adequate support for families when parents cannot work. We need to demonstrate very clearly that, in spite of being a materialistic society, we are still a country of compassion and understanding.
Lord Mawson (CB)
My Lords, I thank my noble friend Lord Bird for introducing this important debate.
I grew up in Bradford, delivering milk in the early morning with my father, who was a milkman on the Thorpe Edge housing estate—one of the largest housing estates in the city, with all the high statistics you would expect in one of the most challenging communities in this country. As a young person I got a nose for what poverty was about—I could smell it, often literally. Over the last 30-plus years, I have been working with challenging families in East End housing estates and, now, in towns and cities across the north of England, where we have had some success in addressing the causes of child poverty and creating an entrepreneurial culture within which families embrace the world of work and take more personal ownership of their situation. From within an entrepreneurial culture focused around activity and practical action, not policy discussion and political agitation, wealth creation has begun to take root.
We have taken the long view. Change takes time. These families are not our clients; they are our friends—people with names, addresses and family histories. It has been about growing a can-do culture and building relationships. We have broken open the traditional silos of government, which, from where we stand, seem incapable of ever learning anything from experience. When you stand in a housing estate and look down the telescope at yet another government policy and programme coming down on these children and challenging families, and if you stay around long enough to gain perspective and watch the cumulative effect of all this political and government activity, what you see is a winding snake.
We have lived through Mrs Thatcher’s policies coming down upon us, as well as John Major’s, Tony Blair’s, Gordon Brown’s, Dave’s and Nick’s, Dave’s and, now, Theresa’s. When you watch carefully, you see the latest well-meaning politician with their policy advisers, often with little practical experience, and their latest bright idea coming down from above with all the unintended consequences. No one stays around long enough to watch the cumulative effect over many years, as we have done. People become trapped in a dependency culture created often by the well-meaning state with all its attendant theoretical “liberal” ideas, often based upon ideology rather than practice.
In the last year I have been asked by the CEO of Public Health England to lead Well North—10 pathfinder projects in challenging communities in the north of England, many of them in housing estates with children and families who have been failed by successive Governments. I have been asked to take our many years of experience in east London and to share it and work with the people there. Of course, I must declare an interest as chairman of Well North. Even after just a year’s engagement in 10 communities, I have found families and individuals who get what we are talking about, and who feel trapped and want to do something very different. They are real people with names and addresses, living in real places called Oldham, Bradford, Skelmersdale, Whitehaven, Bootle, Sheffield, Rotherham, Newcastle and Gateshead, Halton and Widnes. The challenge is: will we be given enough time and space by the system to innovate and build the kinds of long-term relationships with these local families and communities that can be sustainable and make a real difference—relationships within which families can be supported to take hold of their own destinies, escape from a tick-box culture and break open the silos that hold them firmly in their grip?
There is not enough time in this debate to really open up the detail for the Minister of what a more entrepreneurial approach to these challenging issues of poverty means in practice, but I thought I would share some initial radical thoughts to encourage us to think outside the box. Here are three practical, if radical, ideas that challenge the liberal consensus.
First, we should make it a requirement for any programme addressing social issues that 70% of the employees, or self-employed contractors, should live in the wards with the highest unemployment in the area where the programme is working. This would give a real advantage to genuinely locally based and embedded organisations, and a boost to the local economy, and might achieve more than anything else.
Secondly, we should take the “personalised budgets” approach to the next level. We should look at all the money being spent across government on a family or child. We should not, as now, just get government agencies to decide how they might spend the money but co-create something with the family, with a particular emphasis on the children. We frequently forget to listen to children, but in my experience they often have real insights into what is needed. We should be radical. For instance, a place at Eton costs £40,000 a year—a lot less than being in care—and I have found some very talented children on some of these estates.
Thirdly, we should focus on the children themselves. We should learn from the Big Issue and set up enterprise programmes so that the children can start to earn real money themselves. We have done this to some effect. We should support them if the parents try to take the money—for example, parents who have addiction issues with alcohol, drugs, gambling and so on. In this way, the children will become more self-confident and self-reliant in their heads but they will also be helped by having a bit of cash in their pockets. It is simple. I have a good friend who is a very successful business entrepreneur in the north of England and who came from one of these communities. He always tells me that the difference between him and his friends at school was that they had one paper round and he had two. Start ‘em young.
It is time to be radical and to create a learning by doing culture locally that sees the children and families caught in poverty as part of the solution, not just the problem. There is great opportunity awaiting us on our housing estates. There are talented people there—I am meeting them and working with them—who want to be radical and do things differently. They want to take hold of their lives and the life of their community and its future generations. The question is: will we, the well-meaning here in Westminster and Whitehall, allow them to do so? I ask the Minister: what space will be created in the Government’s thinking for innovation in this field that moves beyond the usual structures of government and local authority silos and gets behind local leaders and communities? I would suggest that quite a number of successful entrepreneurs who grew up in these communities want to do more now than just give cheques; they want to use their business skills to help with these issues.
The Lord Bishop of St Albans
My Lords, my thanks go to the noble Lord, Lord Bird, for tabling this important debate and for the challenging and spirited way in which he always makes his speeches, which not only entertain but very often get to the heart of many of the crucial issues. This debate is particularly timely because of the figures recently released by the End Child Poverty Coalition, which show that child poverty levels continue to rise steeply, reaching 47% in some areas. In his maiden speech the noble Lord, Lord Bird, spoke of the need to give those in poverty a hand up and not a handout. He focused on the importance of creating opportunities, rather than dependency. This of course has been one of the great themes of his life’s work. I believe that that is a crucial message.
One of the fundamental areas that I and others in the Church of England have sought be involved in is ways to empower the poor and challenge structural injustice. The Church was and is at the heart of the Fairtrade movement, seeking to ensure that workers are paid a wage reflecting the true value of their work. Across Britain, churches continue to organise with workers for a living wage. Organisations such as Christians Against Poverty are working to help those in the grip of debt take control of their finances, while countless Christian charities are working tirelessly to help, for example, ex-offenders reintegrate into society.
There is, of course, occasionally the need to give immediate relief where it is appropriate—for example, food banks—but that is not a long-term solution. However, one thing strikes me again and again when I visit food banks. I am so often told of the surprising number of families who, having been given food for a few weeks, get back on course and, far from becoming dependent, come back a few months later with gifts of food because, having received help, they want to help others.
The two priorities should run together. The Christian social ethic is, after all, one of neither dependency nor independence but of mutuality, in which both parties have something to give and so both receive something. An anti-child-poverty strategy must neither breed dependence nor hold the individual solely responsible for their circumstances, but seek to bring sustainable change through working in partnership for those who live in poverty.
Part of the answer lies in the education system. A quality education can empower children and is one of the most important routes out of poverty. However, it is not just about good schools. As the book Improving Children’s Life Chances, from the Child Poverty Action Group, points out, family poverty remains the strongest predictor of educational attainment. It says that around only one-tenth of all variations in exam results at 16 can be accounted for by factors relating to schools. Elsewhere it says that low-income families are much less able than others to afford items and activities that many more affluent families routinely pay for in order to boost their children’s educational attainment. Clearly, we should be doing all we can to improve our schools and close the educational attainment gap, as the Social Mobility and Child Poverty Commission’s State of the Nation report, published yesterday, makes clear. Re-establishing funding for local authorities to invest in early years education is also crucial if we are to close the income-based educational attainment gap that exists even before pupils set foot in a school.
However, the fact remains that as familial poverty inhibits educational attainment, it creates a vicious cycle. If we are to break that cycle, we must focus not on handouts but on economic empowerment—on income, in other words. We can talk about all the life chances indicators that we want, but if we lose sight of the centrality of income to a child’s life chances, we will not see children reach their full potential. This is not just the sole responsibility of government. As consumers we need to be relentless in our support of ethical businesses, and as neighbours we need to stand alongside those on poverty pay and support their campaign for a living wage—although policymakers clearly have a crucial role to play.
Improving economic empowerment means creating the conditions in which low-income families can flourish. It means making sure that those in poverty have access to adequate and affordable housing that conforms to the standard of Shelter’s new living rent campaign—something I fear may not be achievable given the present Government’s current focus on homes to buy at the expense of social rents. It means helping low-income families to manage their budgets and encouraging them to save when they are able, removing the poverty premium that means that such families pay more for fuel and other essentials. It means tackling low pay to ensure that working families can provide their children with the resources and experiences they require to flourish at home and at school. Crucially, on that last point, I want to join with the Centre of Social Justice and the Children’s Society in calling on the Government to reverse cuts to in-work allowances under universal credit. To confront child poverty, we must make work pay.
It is precisely because of concerns about creating dependency that we must ensure that the welfare system protects children from poverty. If we are to tackle the perennial problem of child poverty, we must give those children a secure platform from which they can thrive, both at home and at school. I hope that Her Majesty’s Government will give greater consideration to the role of income in establishing that platform.
The Earl of Listowel (CB)
My Lords, I am grateful to my noble friend for calling this important debate. I am also grateful for his life experience, both of working in this area and, on a personal level, of growing up in poverty, which he brings—uniquely, perhaps—to this House.
Over the past 12 months, I have been following the journey of a mother living in temporary accommodation. I had been acquainted with her for several years before she became homeless. We have spoken on the phone on 10 or so occasions since she became homeless, and she has sent me photographs of the various rooms that she and her two daughters, aged 16 and one, have lived in. Over the years, I have seen her physical and mental health gradually deteriorate, but the period in temporary and bed-and-breakfast accommodation has accelerated that decline. Finally, a fortnight ago, I learned from her that she has been settled in a central London borough and, although she and her daughters all still share the same room, they now have a bed apiece, a large kitchen and a bathroom. She is overjoyed that, at least for the next six months, she has a decent home. A month ago, when she was living in a bed and breakfast, she expected to be whisked away to Manchester at any time. More and more, London local authorities are moving homeless families away from London, sometimes as far afield as Manchester, to places where they know nobody and nobody knows them. It was difficult enough for this mother to share a room and a bed with her 16 year-old daughter; I cannot imagine what stress it must put on a couple when they live in such cramped conditions with their children. I wonder what effect housing and income poverty is having on the relationships of couples with young children.
I began working with children in my teens, worked with children in inner-city housing estates in my 20s and have worked with children and young people intermittently since then. Often, when working with boys and young men, I have thought that it would be far better if their fathers were doing for them what I was doing. I remember taking a nine year-old ice skating for the first time and wishing that his father might have been there teaching him to do that. Whether it was taking boys to Chessington World of Adventures or skiing on a dry ski slope, I often wished that it was their fathers, rather than me, introducing them to these experiences. Of course, some of them did have a father teaching them to ride a bike, kicking a football around with them or taking them swimming. But for many, there was no such man. I could feel the ache of some of these boys and young men for a father. That ache might manifest itself in gifts to me. I particularly remember one boy gave me presents of the crickets that he bred on a daily basis.
The OECD research from 2011, led by Professor Melhuish at Birkbeck, University of London, highlighted that one in five of our children were growing up without a father in the home. That was significantly worse than in France or Germany. The United States stood at more than one in four, but the research projected that we would overtake the United States and in a couple of decades a third of our children could grow up without a father in the home.
I am most concerned that austerity, rising numbers of families living in temporary accommodation and cuts to benefits may contribute to this family breakdown. While many single parents cope admirably and there are means of mitigating the loss of fathers, or mothers, and while some fathers may be violent or have difficulties with alcohol or drugs and are best out of their child’s life, at least until they have received help and are reformed, I am sure that the Minister—who takes these issues of family support and stability very seriously—will want to take all steps to minimise the risk of exacerbating couple breakdown.
I note the helpful report from the Centre for Social Justice in 2013 looking at this particular issue and highlighting the large numbers of children growing up without fathers and family. I am concerned that this matter is not often talked about. I recognise that it can be difficult, but I ask the Minister: is the effect of poverty on family breakdown being monitored? I know that a lot of poverty arises from family breakdown, but I am interested to know how far poverty—income poverty and housing poverty in particular—is leading to family breakdown. Have Her Majesty’s Government modelled rates of family breakdown with different rates of poverty? Have they examined the relationship between family homelessness and living in temporary accommodation—120,000 children will live in temporary accommodation this Christmas—and family breakdown? What is the current rate of children living without a father in the home in this country? What is the rate anticipated in 10 years’ time?
I look forward to the Minister’s response.
Baroness Pinnock (LD)
My Lords, I thank the noble Lord, Lord Bird, for initiating this very important debate. I agree with him that we need a strategic approach to tackling child poverty. However, I disagree with him on this point. Not everyone is endowed with the characteristics that can get them out of poverty by their own endeavours.
I will describe a local picture of child poverty. Kirklees Council, where I live and where I serve on the council, serves 420,000 people. It produced a report on poverty in the district this year and these are some of the facts included in that report. There are 20,840 children living in poverty in Kirklees—one in five—and almost two-thirds of those live in lone-parent households. Some 24% of all households have an annual income of below £10,000. That describes the scale of poverty in the district where I live.
The impacts on people’s lives are profound and long-lasting. The inequalities in their lives start at birth, when babies whose mothers are poor tend to have a low birth weight, which can lead to preventable physical and mental health disabilities. Poor health for children growing up in poverty is also a feature. They are more likely to be taken to A&E before they are three years old than their peers. They tend to suffer more persistent, frequent and severe health problems throughout childhood. At school, deprivation tends to result in lower levels of attainment at both key stage 2 and key stage 4. The quality of housing that they live in is also often poor. In Kirklees, over one-third of the properties do not meet modern standards and can be damp and difficult to heat. The result is children suffering from respiratory problems. Often, too, their homes are overcrowded, which adds to family stress and restricts the ability of children to do homework. Statistics show that children who grow up in poverty tend to have poor outcomes in life. They tend to die at a younger age, suffer from chronic ill-health, end up as unskilled workers and have long periods of unemployment. Their aspirations are limited.
The question that we should be asking ourselves today is what can be done to break this cycle of deprivation and stunted life chances, so I have a few suggestions. Housing desperately needs to be improved. Our existing housing stock will be where millions continue to live and some will have their lives blighted by its poor quality. Perhaps the Government could consider measures to cut the cost of home improvements for poor-quality housing. Perhaps they could give grants for housing improvement. That would be novel. In Kirklees, when I was council leader, we introduced the warm zone scheme, which offered free loft and cavity wall insulation to every home. It was mainly funded by an energy company. The result was warmer homes and consequent health improvements. Perhaps the Government would consider replicating that scheme.
The cost of childcare is a huge impediment to adults taking low-paid work. Continuing the funding for childcare of two year-olds in poorer families and not diverting it, as some media reports have suggested might happen, to support the more recent universal childcare offer, would demonstrate the Government’s commitment to supporting families out of poverty.
Another action would be to ensure that the pupil premium is spent on improving outcomes for these children. First, libraries should remain open. Too many are closing—21 of the libraries in my own district have closed, have restricted hours or are run by volunteers. They need to remain open and be available for children in overcrowded homes to do their homework, and to widen their learning and aspirations about what is possible. Above all, we need to raise the sights of young people who have had a poor start in life. They can be the first in their family to go to university, but only if the Government provide financial support for them to do so.
There is much that we can do to help children to have a fair start in life and help all reach their potential. There is a financial reason for doing so, because poverty is a cost on the national purse. Above all, there is a moral imperative.
Baroness Sherlock (Lab)
My Lords, I thank the noble Lord, Lord Bird, for tabling this debate and all noble Lords for their contributions. As I listened to the debate, I was struck not only by how many interesting ideas we have about poverty but by how many of those who spoke are directly involved in doing something. The noble Lords, Lord Bird and Lord Mawson, with their social enterprises and the noble Earl, Lord Arran, who is reaching out by giving holidays to poorer children. The noble Earl, Lord Listowel, is a braver man than I in teaching people to ski and to skate, which is amazing, and there is the work of the noble Baroness, Lady Pinnock, in her council. I am very inspired by this and I am grateful to noble Lords for sharing their experience.
As we have heard, the context of today’s debate is that child poverty in Britain is simply far too high. Whatever measure we use—I am old-fashioned and go with the international standard of 60% of median household income—we are talking about 3.9 million children living in poverty in the UK in 2014-15, and as the right reverend Prelate the Bishop of St Albans mentioned, the figure is rising by 200,000 year on year. Some two-thirds of children growing up in poverty live in a family where an adult is in work. That is one of the key things I want to talk about today. We heard from the noble Earl, Lord Arran, and others about the scarring effect in later life of poverty and I have been reminded by the North East Child Poverty Commission about the critical state of the damage being caused at the moment by, for example, food poverty and food insecurity.
In September the Joseph Rowntree Foundation published a detailed report entitled UK Poverty: Causes, Costs and Solutions. In her foreword, CEO Julia Unwin said:
“You can blame individuals for the bad decisions they make, and fool yourself into believing it could never happen to you. Or you can blame national structures—if only the system of tax and benefits could be fundamentally redesigned, and structural inequality abolished, then poverty could be ended”.
She goes on to point out that neither of these is the answer and that structures and choices must be considered together for policy to be effective. I am absolutely with all those noble Lords who talked about the importance of learning from people living in poor communities, looking at the assets they have and working with those assets—but I also think that there are structural questions which cannot be ignored. The JRF report highlighted five key causes that need priority action: low wages, insecure jobs and unemployment; a lack of skills; family problems; an inadequate benefits system; and high costs, including housing.
The Government’s strategy identifies—sort of—two and a half of those. They want to address educational attainment and family breakdown, although I do not think that they map fully on to these drivers, and they want to deal with workless households. They also highlight problem debt and addiction. All of those are important. But I worry that the Government’s strategy refuses to address the other half of the picture because they are the dimensions that relate to the structural causes of poverty and they cannot be ignored.
The JRF report highlights the changes to the kinds of jobs available to many people in the UK, including the problems caused by firms,
“whose commercial strategies depend on low-paid, low-skilled, insecure work that does not provide a stepping stone to something better”.
If work cannot lift a family out of poverty, just tackling worklessness will not solve the problem. We have to accept that before we go any further.
The report then notes that the benefits system does not make work easy or safe and states:
“The level of welfare benefits for some—those in work, seeking work or unable to work because of health or care issues—is simply not high enough to avoid poverty, when combined with other resources and high costs”.
It is not surprising, given what has happened. Billions of pounds have been taken away from the pockets of low-income families. The Welfare Reform and Work Act alone, by reducing the benefit cap, has hit almost 250,000 children in low-income families and it has frozen the level of most benefits and tax credits for four years, which the Children’s Society estimates will affect some 7.5 million children in 4 million families, nearly two-thirds of them in work.
Then there are the high costs. The JRF report points out that between 2008 and 2014 the cost of essentials increased three times faster than average wages, adding to a widespread sense of insecurity. This is a toxic cocktail of high costs and rents, low wages, unpredictable and insecure jobs, unaffordable childcare and cuts to in-work benefits. Those are government failures. Ministers cannot just blame individuals for their poverty when they have set them up to fail by refusing to address these structural shortcomings.
I have no doubt that these benefit cuts were forced on a reluctant DWP by George Osborne’s Treasury, but now that we are living under a new dispensation I encourage the Minister to beat a well-worn path to the Treasury and urge his Government, as the right reverend Prelate said, immediately to reverse the drastic and counterproductive cuts to the work allowance and to universal credit which have stopped making work pay in the way it should. They should also return to increasing benefits and tax credits by the rate of inflation so that poor families do not simply get poorer year on year.
The other key change in the Act was to shift the Government’s focus from poverty to social mobility and life chances. I have read a great book on life chances published yesterday by the CPAG which makes some brilliant connections between money and non-financial issues in policy. I declare an interest as one of those terrible advisers to government whom the noble Lord, Lord Bird, berates, but when the Labour Government increased the spending capacity of low-income families in the early 2000s, they found that as income rose, spending patterns changed. Families spent more on fruit and vegetables, children’s clothes, toys and books, and less on alcohol and cigarettes.
Kitty Stewart and Kerris Cooper have looked at the impact of household income on children’s outcomes and found out, as the right reverend Prelate said, how much of a difference is made to educational attainment when income is increased. That means not only staying on at school but attainment levels in maths and reading, and in examination results. All of this improves as income improves. Likewise, parenting and family environment: there is very clear evidence of much stronger parenting where income can be increased.
The problem with social mobility is that, done properly in our economy, it is a game of snakes and ladders. If more poor kids do well, some rich kids will have to do less well. We cannot have a board with only ladders. We cannot all be QCs and surgeons; someone has got to be at the bottom and I am so grateful that they are because in our current environment we have people out there caring for disabled and older people, sweeping the streets and working as teaching assistants who are often being paid the minimum wage. That means that I do not just want social mobility. I do not want a country where our children are better equipped to fight each other for a spot at the top. I want one where all of our children can flourish wherever they end up on the board. They deserve no less.
The Minister of State, Department for Work and Pensions (Lord Freud) (Con)
My Lords, I join other Peers in congratulating the noble Lord, Lord Bird, on securing this debate on what is a vital issue and will go on being a vital issue for decades. I also thank him for drawing a distinction, from his family background, on the difference between being poor, as his uncle was, and living in poverty.
The evidence is clear that work is the best route out of poverty. Working-age adults in non-working families are almost four times more likely to be living on a low income, while the Child Poverty Transitions report published in June 2015 found that 74% of poor children in workless families that moved into full employment did exit poverty. I suspect that I do not have to draw the attention of noble Lords to the employment figures released yesterday. The record on employment is pretty compelling. The employment rate remains at 74.5% and now some 2.8 million more people are in work than in 2010. This is important because it is not just that being in work brings financial benefits; there are wider benefits as well. Clear evidence shows that good-quality work is linked to better physical and mental health along with improved well-being, and that better parental health is associated with better outcomes for children.
I am very aware that, since the last time we discussed this matter in a debate initiated by the noble Lord, Lord Bird, many things have changed. This country has taken on new leadership and a new direction, but what remains the same is that tackling poverty and disadvantage is a priority for the Government: a priority to deliver real social reform. The new Prime Minister—she is almost not new any more—has set out clearly that she is committed to building a country that works for everyone, not only the privileged few. To do that, she has set up a new social reform Cabinet committee which brings together nine government departments to oversee and agree social policy reforms and lead the Government’s work to increase social mobility, deliver social justice and make Britain a country that works for everyone. The Secretary of State for Work and Pensions has also said that he will make a number of announcements in the coming months.
Let me pick up some of the points made today. The central point made by a number of noble Lords, not least by the noble Lord, Lord Bird, was on the importance of tackling the root causes of disadvantage and poverty and not just the symptoms. That means tackling some complex social problems and it is why we rejected the narrow, income-based approach to poverty that focused on getting families above a notional poverty line. We now have two new statutory measures that will drive real action on worklessness and educational attainment. The right reverend Prelate the Bishop of St Albans talked about the importance of educational attainment in tackling this issue. We will have other, non-statutory measures for getting at the root causes.
I have spoken about the Government’s record, but it is worth putting the figures on the record: the number of workless households since 2010 is down by 865,000; there are 557,000 fewer children living in a workless household than in 2010; the number of households in the social rented sector where no one works has fallen by nearly 350,000 since 2010; and average household incomes have reached their highest ever level, growing last year by 3.4%, which is the fastest rate since 2001-02.
Clearly, there is much more to do. This Government are committed to ensuring that those in work are paid a fair wage and have opportunities to progress and achieve their potential. That is why we are getting people into employment and working to change attitudes. We are also introducing reforms to make sure that work always pays. We are cutting income tax for more than 30 million people this year and taking 4 million of the lowest-paid out of income tax completely. We are making sure that people working 30 hours a week on the national minimum wage do not pay any income tax and giving full-time low-paid workers previously on the national minimum wage a pay rise of more than £15 a week through the national living wage.
We cannot forget the importance of universal credit as it rolls out. To pick up a point made by the noble Lord, Lord Mawson, that new benefit system starts to break down the silo-ised legacy benefits system, which will allow some of the local initiatives that he and others are pursuing to happen. We already see the effect with the incentive structures of universal credit. For every 100 people who found work under the old JSA system, 113 universal credit claimants have moved into a job. Universal credit also gives the opportunity to tackle the poverty premium that the right reverend Prelate talked about. The reform increases support for parents. Universal credit now provides for 85% of childcare costs. The right reverend Prelate asked whether the work incentives are undermined by the changes to work allowances. They do not change the structure of the incentives. We retain the taper in UC at 65%.
One issue we face is getting services working together more efficiently to help support people with complex problems into work—it is the central issue in tackling poverty, in my personal view. Through universal support, we are helping universal credit claimants to address some of their barriers—in this case, their digital and financial barriers—and transforming the way that jobcentres work as part of their local communities to allow them to tackle barriers faced by people with complex problems. We are testing and learning in this area and have built up a lot of evidence on how people face multiple barriers. We are reviewing our universal support approach to see how best to expand it and address them. I had an interesting and valuable meeting with the noble Lord, Lord Mawson, recently, which got us thinking about how to put the community into that approach, so that it is not just done to people but people are part of the solution.
The noble Earl, Lord Listowel, asked about family breakdown. We do not monitor the impact of poverty on family breakdown, but we are clear that we cannot afford to overlook the importance of the family as the basic block on which we build a successful economy. ONS figures show that, of the nearly 2 million lone parents with dependent children in the UK in 2015, women accounted for some 90%. The evidence shows that what matters most is the quality of family relationships, not whether parents are married or separated. In particular, children have been shown to be at risk of poorer long-term outcomes if exposed to frequent, intense and poorly resolved conflict between parents—we are picking up some of that evidence in what we do.
On fuel poverty, mentioned by the right reverend Prelate and the noble Baroness, Lady Pinnock, cold weather payments are running at £25 per week between November and March and we have paid out £3.9 million in 155,000 individual payments. The warm house discount takes £140 off costs for 2 million households.
Let me reassure the House that this Government are absolutely committed to fighting against the injustices of society and ensuring that everyone has the right opportunities to fulfil their potential. Making work pay, supporting families into work and out of poverty, by tackling the root causes of poverty and not just the symptoms, and delivering real social reform will be a priority for this Government.
Immigration: Overseas Students
(7 years, 5 months ago)
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Lord Lucas
That this House takes note of the application of immigration policy to overseas students at United Kingdom universities and colleges.
Lord Lucas (Con)
My Lords, after our decision to leave the European Union, we are now setting out to woo the world. In the words of the Prime Minister at the Lord Mayor’s Banquet, we are a “flexible, ambitious country” stepping up to “a new global role”.
Higher education and further education both incorporate a large number of world-leading courses and institutions. They have long-standing success and reputations overseas. They bring in a great deal of money in a growth market. They give us relationships across the world and over time that we can use for other purposes. They should be absolutely central to the Prime Minister’s ambition, but we are making a complete mess and losing market share. We need to sort that out together.
What each of us does affects the whole, as should be obvious to the Home Office from the effects of the random policy announcements at the Conservative Party conference. Some of the remedy, of course, is in the hands of universities, and the Home Office has my sympathy in having to deal with them. They move slowly, they tend to set the bar at the bottom—when faced with a range of performance they tend to set it at the lowest setting possible and then say, “Aren’t we good? We all do better than that”. They are very slow to engage with politicians. Despite having the support of the editor of the Times Higher Educational Supplement, I have had no response from anybody in academia, other than those I have approached myself, as to what policy changes the Government ought to make. They seem, judging from the pronouncements one comes across in the press and other media, to be mostly concerned with their own affairs and not really with what is happening to the rest of us. They do not appear to be as collaborative as they should be in this world. They market themselves individually overseas; the GREAT campaign, which succeeded in other areas of the economy, has really not made as much progress in knowledge, to my mind, as it should have.
However, it is the Home Office we have in front of us today, so most of my speech will concentrate on what I think it could do to improve things. My first question for my noble friend is, what is the problem? I do not mean that pejoratively; it is a bemused inquiry. No one I have spoken to in doing research for this debate has a clue as to what the Home Office thinks the problem is. What is the problem? Why is it a problem? What are its priorities? Nobody knows and it is really hard to collaborate with the Home Office and think of ways to help it while we help ourselves when we have no clue what it wants. It strikes me that the Home Office thinks that it does not need to communicate—it knows what the problems are, it is in charge of solving the problems and only it need do anything. It is a half-starved bulldog chained up outside in all weathers, waiting to bite anyone who tries to get in the front door. This is not true, particularly with Brexit: we are all in this together, we all have responsibility, particularly for immigration, since controlling immigration is clearly one of our objectives, post-Brexit.
All of us—the Government, employers, universities and individuals—have a shared responsibility, over time, to do something about the level of immigration. The Home Office is going to have plenty of trouble with employers on that; I wish more power to its elbow, but it should expect our collaboration and co-operation and it should involve us. Similarly, the Home Office has a responsibility for the economy, for trade, for employment and for the reputation of Britain as a whole, to which it must pay attention, rather than thinking it can make pronouncements and policies in total isolation.
Things have improved over the past few years. It is now possible for a university to have a dedicated officer at UKVI, paid for by the university—quite rightly so—to deal with problems as they arise and act as a conduit for questions. There is a very interesting pilot going on with Imperial College and some other universities to see what can be done to improve things further in return for privileges in the way that overseas students are dealt with. I thoroughly approve of that as a way of developing things, but much more needs to be done.
Fundamentally, as I have said, the Home Office needs to share its concerns. We are not, thank goodness, in the era of the Somme or Balaclava; it is not ours to do or die and not to reason why. We want things to be explained to us and to be allowed to contribute to decisions, to make them better and to make them things that we all own. I greatly encourage the Home Office to open up so that we can really know what the problem is and how we can set about solving it together. We have to wait, quite reasonably, for the Home Office to develop immigration policy generally. The post-study work route, which matters a lot when it comes to marketing university courses overseas, is fundamentally subservient to our overall, detailed immigration objectives. It has a lot of attractions as a method of immigration. By the time people become qualified, they have been with us a long time, we know them, they know us, and they have a loyalty and affection for us. They are a very good source of migration, if that is what we want and if it is where we want it. Once we have that policy I very much hope that post-study work visas will re-emerge as a very good way of bringing in whatever it is we want by way of immigration.
There is scope for a much more open, much deeper relationship between the Home Office and universities. Over the past six years or so the Government have created high-performing, highly accountable partners in universities, people who are used to working positively with the Home Office, who are greatly incentivised to work well with the Home Office and who can and should be relied on. However, they are not involved where they absolutely should be: designing systems, forms and websites. All these things make a great difference to how potential students perceive the UK. The connection with in-country officers is far too loose. This is true even for schools. Immigration to independent schools is pretty well trouble-free except for the behaviour of some in-country officers. It really does not seem to be integrated with the systems that the Home Office has. There needs to be much better connection there.
There needs to be fast correction of mistakes. Even obviously wrong decisions can take six months to set right. If it is a problem of finance then the Home Office should draw money from the university system to staff things properly. If a university notifies the Home Office that a particular student is sick and needs to defer their course for a year, the Home Office takes six months to register that fact and that six months is then deducted from a student’s right to study in the UK. That is not correct. We have just introduced the right to rent. Nothing has been done, as far as I can find out, to make that an easier policy for universities to navigate or to make it easier for them to help their students rent privately, as many of them have to. There does not appear to be any positive approach to the idea of students coming here at 14 or 16 and our taking them through to the end of a degree in a UK university, which is a growing part of the market.
There are lots of areas where there is scope for collaboration and continuous improvement in the way that the Home Office and universities work together to make us a better destination for overseas students. I would really like to see an “educated in Britain” database that records every student who has been the beneficiary of UK education, so that we can support them and they can support each other to create opportunities for trade and to help market UK education for future students.
The conference speech by the Home Secretary was a particular disappointment to me in the way it addressed universities. The idea of discrimination on quality, that there are courses so bad that they are fit only for putting our own children into debt, is not something that appeals to me or has any resonance overseas. I come back to my initial question: what is the problem to which this is an answer? There must be better ways of tackling it, if only we could be told what the problem is. I do not want to see, and I am sure that my noble friend does not want to see, the University of Huddersfield struck off the list as not being grand enough for overseas students. Why should we discriminate in that way? If overseas people want to study at our further education colleges—there are some wonderful, world-leading courses—or even if they just want to come here to study English, why should we put them off if we are in proper control of the consequences of our immigration policies?
That comes back to the old problem of the treatment of students as immigrants. Yesterday Jo Johnson restated to the APPG on International Students that there is no cap on student numbers; there is no cap on tier 2. Clearly, a group of people to whom that applies are not immigrants in the way that we usually think of them; nor do people around the country think of them as immigrants in the usual way. Their inclusion in the figures means that every time we do something to try to control immigration, which we will be doing pretty frequently, that is read overseas as an attack on overseas students.
We are completely muddying the waters. The problem is overstayers. We do not know how many overstayers there are. There are some good low estimates; there may be other estimates, but the fact that there are no data is down to the Home Office because it is not recording exits properly. Why should the Home Office’s failure be visited on universities? There is no good reason for it. It would be much better for everybody if the figures were separated and we could have a clear view of what is happening in the areas of immigration that we all care about.
The Home Office has demonstrated a great ability to be destructive to the reputation of higher education abroad. I believe that it could become a constructive partner and still achieve its objectives but that belief is based on my imagination as to what those objectives are. I wish it would. I beg to move.
Baroness Warwick of Undercliffe (Lab)
My Lords, I thank the noble Lord, Lord Lucas, for securing this debate and declare an interest as a council member of two universities: Nottingham Trent and UCL. I have sympathy with a great deal of what he said, although I must say that I received a very good briefing from Universities UK and several other university groups.
This topic has been raised many times in your Lordships’ House and each time the Government have refused to act. Numbers are falling or merely holding steady as the market expands and our competitors increase their share. I am not going to cite a list of data. We know that they show that economically, diplomatically and academically, international students are a huge asset to the UK. We should treasure our prestige as a country that has one of the best higher education systems in the world. I worry that the Government do not treasure it.
The Government are consulting on further restrictions, apparently related to quality of institutions or courses. They do us all a great disservice by casting aspersions on the quality of some of our universities, based on no evidence and no apparent understanding of the architecture which guarantees that any UK university offering degrees meets rigorous quality criteria. There are not even any international data on the quality of teaching as a basis for comparison. This is a real own goal.
Attracting “the brightest and the best” has become a trap. Now we see it being deployed in defence of an argument that some as yet undefined subset of universities should have the right to attract international students. I can think of no other area where the Government would take this view. To use a retail analogy, it is inconceivable that the Government would want to allow Burberry to flourish while preventing M&S from succeeding abroad. Each has its own strengths and its own appeal. Of the two universities I know best, UCL attracts the highest number of international students in the UK; Nottingham Trent was voted the best university for international student experience in the 2016 WhatUni? Student Choice awards. They have different missions as universities. Each has its own strengths and its own appeal but they both offer an amazing educational experience for their international students. To put it another way, it would be nonsensical to act to save jobs at Nissan while actively undermining Sunderland’s other major employer—the university.
This House should send three clear messages to the Government, and I hope that the Minister will deal with each of them in her reply. First, any institution successfully reviewed by the Quality Assurance Agency should be deemed, on the basis of that sound evidence, to be an institution of high quality. The Government should not undermine faith in our rigorous quality assurance system by suggesting otherwise; or, if they doubt the efficacy of that system, by all means let them review it. Secondly, the new teaching excellence framework should not be used as a mechanism to determine immigration policy. That is not what it was designed to do. It would be a spectacular own goal to use it as a way of categorising our universities overseas. Thirdly, we should reiterate the view taken by this House time and again—it was mentioned again by the noble Lord, Lord Lucas—that if we want a Britain open to the world, the Government must now urgently reconsider their attitude to the inclusion of students in the net migration target.
It is in the interests of this country that we attract international students and staff from around the world. We benefit from the network of personal relationships formed while students are here. One in seven world leaders was educated here, and the Government’s own research shows that people who have studied in the UK are 18% more likely to trade or invest with us. We benefit from the economic impact in towns and cities across the UK. In London alone, international students bring an estimated £3 billion to the economy. In the Nottingham area, NTU’s international student fees contribute to 4,000 directly created jobs, plus a further 6,500, generated mostly in local businesses. Add the universities of Nottingham, Derby, Leicester, Loughborough and Lincoln and you have a formidable regional nexus. UK students benefit enormously from the richness of bringing together the brightest minds from around the world. The provost at UCL has commented that teams of people from different backgrounds are great for problem-solving because they will approach the problems differently.
All these points have been made time and again across both sides of the House yet we seem to be moving backwards, not forwards. But there is a new circumstance, which means that we should renew our effort. Following the vote to leave the European Union, the Government are rightly committed to forging stronger relationships around the world. Universities’ global alumni reinforce the UK’s world influence; surely this is important post-Brexit. Education is one of the UK’s greatest exports. Our Prime Minister’s recent visit to India demonstrates that our desire to trade will receive a frosty reception if we maintain our attitude on student visas. To paraphrase India’s PM Modi, “You want our trade but not our children”. The noble Lord, Lord Bilimoria, was there and I am sure that he will tell us how the Prime Minister’s view on this topic was received. If we want to become a stronger trading nation, we should invest strategically in the inbound and outbound mobility of students. If we want strong diplomatic ties, we should lead with our acknowledged advantage in education where, through co-operation with us, other countries can raise their own performance.
I hope that the Prime Minister’s recent visit to India will have helped her to see this old issue in a new light and no longer with the isolationism of the Home Office. She must respond to the long-term needs of our economy and not the short-term pressures of politics if she is to steer a course successfully through what are now very turbulent waters.
Baroness Smith of Newnham (LD)
My Lords, I congratulate the noble Lord, Lord Lucas, on introducing this debate this afternoon but already we are beginning to get into a situation where it is almost déjà vu all over again. This time last week, we were in debate on the impact of Brexit on higher education research; two weeks ago, it was on the impact of Brexit on free trade. Many of the issues are very similar. At the end of last week’s debate the noble Baroness, Lady Dean, said, “I have thrown away my notes because everything has already been said”. I am only the third speaker this afternoon and many of the things that I was going to say have indeed already been said, so I will endeavour not to duplicate too much. There is clearly a huge convergence among Conservatives, Labour, Liberal Democrats and, I suspect, Cross-Benchers about the importance of higher education to the United Kingdom economy.
There is also convergence on questions about why the Home Office finds students and higher education so difficult. My suggestion in answer to the noble Lord, Lord Lucas, is that the Prime Minister is perhaps the answer herself. In the previous Government my understanding is that BIS, as it was then, was absolutely committed to the importance of higher education while the department was led by Vince Cable—a Liberal Democrat but with David Willetts, now the noble Lord, Lord Willetts, at his side. They understood it as a major export for the United Kingdom and the person who disagreed was one Theresa May, when she was Home Secretary. Can the Minister tell us whether the Prime Minister and the current Home Secretary now really understand the importance of higher education to UK plc?
Before I continue, I must declare my standard interest. I am employed by the University of Cambridge, where I teach in the Department of Politics and International Studies. We have an MPhil and I am responsible for a part-time degree in international relations; they both have many international students. I am a graduate tutor at my Cambridge college; again, it has many international students, all of whom come with their own experiences of the process of applying to Cambridge. It is one of the top universities in the world and we are, rightly, proud of it. I am sure that if the noble Lord, Lord Lucas, would like some additional responses from universities then the University of Cambridge would be only too happy to oblige with briefings and meetings.
However, even at a university such as Cambridge, which is understood by UKBA to have the appropriate criteria and highly trusted status for visas, the students who want to come there have huge difficulties getting through the visa process. The noble Lord, Lord Lucas, pointed out that things may have got better for the universities but for individual candidates that may not be the case. The cost of applying for a British visa is much higher when compared with a US visa. The bureaucracy in getting a British visa is much more complicated. If you were in a third country and thinking, “Shall I go to a world-leading university in the US or shall I go to the United Kingdom?”, the answer, if you were not passionate about coming to the UK, is often that it would be much easier to go to the United States. Is that really the message which the Government want to send out?
If the message of Brexit, and that of the Government saying “We will make a success of Brexit”, is about going global then surely higher education is among the most obvious places to go. Higher education is a major global export and there are huge opportunities for universities and colleges to export further and have more international students. But that will rely on the Government thinking again about how visas are dealt with in-country, and about whether students should really be part of immigration numbers.
One of the easiest ways to take down the immigration numbers would be to acknowledge that the vast majority of people who come as students to the United Kingdom are here temporarily. They are not coming to drain our resources but contributing to our economy. At the moment, according to the Russell group, £10 billion a year comes from international students—about the same amount of money that we currently pay into the European Union. We tend to think of that as quite a lot of money. The money from students could be increased but only if the UK looks as if it is open for business. Can the Minister tell us whether the Government will look again at the immigration statistics?
In the context of Brexit, EU nationals are treated at present in the same way as home students. I understand that the Minister will not give us a running commentary on negotiations but can she at least tell us whether the Government are willing to think liberally and openly about how we keep open the market for EU and EEA nationals who want to come to the United Kingdom? Our economy, our culture and our soft power all depend on it. As the noble Baroness, Lady Warwick, pointed out, many leaders have been educated here. Those links that go back to university or to Sandhurst are hugely important for international relations in generations now and to come. The UK can benefit hugely, but only if the Government send out the right signal.
Lord Trees (CB)
My Lords, I am grateful to the noble Lord, Lord Lucas, for securing this debate on such an important subject for our universities, higher education institutions and research institutes. I want mainly to talk about the benefits to the UK of overseas students, but first I shall comment on the inclusion of students in the migration statistics, which has already been referred to. Of the total migration figures for the year ending March 2016, 26% were students. That is a fact of which I was unaware and, I suspect, most of the public are unaware. Yet surveys show that the public do not regard students as migrants. They do not compete for jobs or deprive our citizens of employment. Is it not time when publicising migration statistics at least to identify that proportion of the figure for net migration which comprises students, accurately to reflect the reality and to allay some concerns?
It is much more important to recognise the huge benefits these students confer on UK plc. Several references have already been made to them. Providing study opportunities for overseas students is surely one of the most cost-effective ways we can exert international influence, discharge our international development responsibilities, enrich our scientific and cultural diversity and quality, gain substantial short-term income and create longer-term and enduring economic benefit for the UK.
I shall consider three of these issues in a little more detail. First, international students directly contribute income to higher education and research institutes through their fees: more than £4 billion in 2015 alone. They also contribute to the wider economy through their off-campus spending. In 2012, that was estimated to be worth more than £7 billion spread throughout the UK. International students significantly strengthen our university departments and courses, especially in vital STEM subjects which might otherwise be economically unviable, and they underpin our centres of excellence in specific areas of international interest. As someone who has worked in two British centres of excellence—in international human health at the Liverpool School of Tropical Medicine and in international animal health at the Centre for Tropical Veterinary Medicine at the University of Edinburgh—I am acutely aware of this. Parallels exist in many other institutions in science, technology, sociology and the humanities.
The sustainability of these institutions not only serves an international good but is enlightened self-interest. We live in a shrinking world, and today’s problems overseas can become our problems tomorrow. In the field of human and animal disease, we have seen this in recent years with SARS, Zika, dengue and Ebola, and in a veterinary context we face the continuous threat of foot and mouth disease, blue-tongue and Schmallenberg, and lots of exotically named diseases such as lumpy skin disease are knocking at the door. To protect our nation’s health, human and animal, we need our national capability in these areas, and overseas students are vital in helping to ensure that.
Secondly, the education of international students aids economic development, helps reduce the burden of disease overseas and, by enhancing well-being and economic development, ultimately reduces some of the major reasons people need to migrate in the first place.
Thirdly, as has been said, by educating the brightest and best from overseas, those who will become leaders in their own countries, we establish a cadre of UK alumni who for their lifetime owe a debt of gratitude and loyalty to the UK that will be repaid in countless ways and benefit us as an international trading and research-led economy.
We thus benefit from a triple whammy. Overseas students enrich our institutions, their own country’s development and our long-term political, scientific and economic future. Furthermore, the public do not even consider these students as immigrants. It would be foolish for us to inhibit these colossal benefits, and we are already losing out to competitor countries which welcome overseas students and still foster this role, such as Canada and Australia and even the US. On the contrary, we should actively seek and encourage international students, especially from Africa, Asia and South America, where we wish to expand relationships and trade.
I would like the UK to use more of our admirable commitment to devoting 0.7% of gross national income to international development for this purpose. What steps are Her Majesty’s Government taking to increase the number of overseas students by providing more scholarships for them to study at our world-class institutions?
The Lord Bishop of Winchester
My Lords, I too thank the noble Lord, Lord Lucas, for securing the time to have this important debate. I begin by declaring several interests: as a governor of Winchester University and as visitor to the Oxford colleges of New College, Magdalene, Corpus Christi, Trinity and St John’s.
Universities have always been centres of wisdom and learning: places filled with global-minded people, where political, cultural and geographical boundaries are transcended for the common good. The value of studying abroad is unquestionable. How would scholarship look today if St Augustine had been unable to complete his studies due to visa complications? Would we have heard of Thomas Aquinas if he had been turned back at the French border? Finally, would,
“the world is everything that is the case”,
still be the case if Ludwig Wittgenstein had been asked to produce a study permit on arriving in Britain? Perhaps it is natural that these figures come to mind to me, a bishop in the Church of England and a member of a global community of faith. The point I wish to emphasise especially is that in a modern world, where talk of globalisation and internationalism is constant, our universities should be at the centre of co-operation between nations, whether that be through scientific, artistic, intellectual or cultural endeavours, all of which help us to develop our understanding of the world around us and of our shared humanity.
There are more than 400,000 overseas students in the UK—almost one in five students. However, it is not simply a matter of numbers, it is also about the positive impact which international students have on the communities in which they study. I am sure many of your Lordships are aware that in a recent survey conducted by Universities UK, eight out of 10 respondents agreed that international students have a positive impact on local economies and towns in which they study. Of those asked, 75% said that they would like to see the same number, or more, of international students in the UK. That figure jumped to 87% once information on the economic benefits of international students was provided. Although we acknowledge the economic and soft-power arguments, we believe that allowing institutions to speak the common language of learning is a higher priority in relation to university education. After all, the best universities are international communities of scholars. Given this tremendous contribution, I urge the Government to maintain the international quality that is still found in UK universities.
However, there are some early indicators of concern. For example, international student numbers are beginning to fall. The number of Indian first-year enrolments at UK universities fell by 10%—from 11,270 in 2014 to 10,125 a year later. We would hope to see EU students take up this additional capacity but, unfortunately, one of the Oxford colleges I visit has seen a 9% drop in EU student applications this year already. Another college said that it could not exist without them. A decline in the number of overseas students will not be in the interests of the British people, who mostly see them as a positive force, and will slowly undermine the quality of our university education.
Above all, let us see if we can ensure a new era of student mobility which cherishes the contribution made by our international students and helps keep our universities as true centres of wisdom and learning.
Lord Lexden (Con)
My Lords, it is a great pleasure to follow the right reverend Prelate the Bishop of Winchester, who mingled wit and wisdom in his wise comments to us.
The Motion that my noble friend Lord Lucas has enabled us to debate today, with our manifest gratitude, covers both universities and colleges. I shall comment from the perspective of colleges, and indeed schools, in the independent sector, where large numbers of overseas students have been educated with skill and success for many years.
I declare my interest as president of the Independent Schools Association, the ISA, one of a number of bodies that comprise the Independent Schools Council, of which I am a former general secretary. The ISA works on behalf of some 400 schools, generally small in size, committed to keeping their fees as low as possible and to increasing means-tested bursaries, and fully integrated with their local communities. They feature hardly at all in the interminable stock controversies about independent education, which revolve chiefly around a small number of so-called public schools.
I am also president of the Council for Independent Education, CIFE, which brings together a group of 20 leading private sixth-form colleges. They focus on A-levels, exam success and excellent pastoral care. At least 15,000 international students have passed successfully through CIFE colleges on their way to UK universities in the last 10 years. The colleges mingle great talents and different cultures, enriching our own country and other nations.
It will perhaps come as little surprise to your Lordships that in these schools and colleges there is unanimous opposition to the inclusion of overseas students in the official immigration figures. On this central issue, the voice of our universities has been heard loudly and clearly but the voice of independent schools and colleges is no less emphatic. The arguments are well-known in your Lordships’ House—indeed, they are being restated in this debate—and I will not take up time by repeating them. Suffice it to say that the current arrangements impede recruitment and damage the reputation of our country as a place that is both open and welcoming to overseas students.
It ought surely to be a fundamental objective of any Government to assist the continuing success of our country’s private education sector in recruiting overseas. Its schools and colleges are world leaders, earning significant foreign exchange and promoting British cultural and democratic values worldwide. But with the reverberations of Brexit stirring concern about our country’s future across the globe, Britain’s independent schools and colleges are increasingly conscious of the difficulties that they face because of our current stringent immigration study requirements. Our English-speaking competitors in the international market are not slow to seek progress at our expense, stressing their greater openness and easier entry requirements. This was brought home to a CIFE college principal on a recent visit to Nigeria: Canada, he was told, was now seen as more attractive than the UK.
Serious concern has arisen in particular because the processes through which overseas students have to pass have become increasingly onerous and, in their application, a source of increasing anxiety to schools and colleges because stiff penalties are now being imposed, often in a seemingly arbitrary fashion, for minor paperwork errors. Britain’s schools and colleges today are subject to stringent regulatory oversight. There is no complaint to be made about that, but very minor infractions of regulations are now being reported by the inspectorate to UKVI, which in turn is liable to impose heavy sanctions on schools and colleges sponsoring students under the tier 4 route. Sanctions include the reduction of what are known as “confirmation of acceptance for studies” numbers to zero. That can threaten the very existence of schools and colleges with a significant proportion of overseas students.
A litany of complaints from schools and colleges about decisions by UKVI, many of them apparently arbitrary in character, has reached the ISA’s chief executive, my colleague Mr Neil Roskilly. When information is sought from UKVI it is often slow in coming—a point made by my noble friend Lord Lucas. The introduction of yet more regulations, particularly those which require students to apply for visas more frequently, is compounding the problem. I will, if I may, let the Minister have a dossier of the difficulties experienced by independent schools and colleges to bring home to the Government the reality of what is happening.
At the heart of so many of the problems faced by independent colleges and schools lies the tier 4 entry route. It needs to be reviewed with the simple aim of ensuring that the requirements it imposes are not more onerous than those that exist in other countries that are in competition with us. Having done that, the Government should monitor carefully the way they are applied to secure consistency, common sense and fairness.
Baroness Chakrabarti (Lab) (Maiden Speech)
My Lords, it is after two months of listening and attempting to learn that I utter my first words in your Lordships’ House. In that time, I have been grateful for the warmth of the welcome that I have received from so many on all sides in here, not least from my sponsors, my noble friends Lady Kennedy of The Shaws and Lady Lawrence of Clarendon, and my mentor, my noble friend Lord Dubs—great internationalists all three. Having been a regular visitor, in my case first—dare I say it—as a Home Office lawyer, and then as a human rights campaigner over 20 years does not necessarily make for a less daunting migration, so I am especially grateful for the constant kindness and wisdom of all the staff who make this place work so well.
In recent tumultuous months, I have also found the civility of discourse in this Chamber to be in sharp contrast with what goes on outside it, whether in our country, continent or wider, troubled world. Would that more of your Lordships’ reasoned debate on even the most difficult of questions might escape these walls and take root elsewhere; I have no doubt that all humanity would benefit in the turbulent times ahead.
I am grateful to the noble Lord, Lord Lucas, for the opportunity to make a maiden speech on immigration policy and higher education. I declare an interest as the chancellor of the University of Essex, the former chancellor of Oxford Brookes University and an honorary professor at the University of Manchester and the London School of Economics, among a number of other higher education connections and affiliations over the years. Like so many of your Lordships, I owe every life chance that brings me here to a wonderful British education—including, in my case, a legal education that was free up to degree level and even supported by a full maintenance grant.
For the daughter of migrants to this country—real ones, wonderful people—that education was key, as was the opportunity while at university to rub along with students and teachers from all over the world. Higher education has no borders and, as so many noble Lords put it so eloquently two weeks ago in the debate initiated by my noble friend Lord Soley, an academy that has borders imposed on it simply cannot thrive, let alone maintain its world-class status.
As just one example, the University of Essex is a destination of choice for students within the European Union and is consistently in the top five UK universities for recruitment of non-UK EU students. We are proud to be placed 21st in the world in the Times Higher Education world university rankings for international outlook. That is a measure of the proportion of international students and staff and the volume of scientific papers co-authored with academics from outside the UK. Of our entire student population, 14.4% are non-UK EU students, and to lose them completely would reduce our fee income by 13%, or £17.5 million a year. Reductions of this order, if not matched by an additional intake of non-EU students, would cause major detriment to the university’s sustainability and ongoing ability to contribute nearly £500 million a year to the local and regional economy.
Across the United Kingdom, universities support over 170,000 jobs in local communities and contribute more than £10.7 billion annually to the UK economy. But the effect on UK universities of blocking overseas students and academics cannot be measured in monetary value alone. To echo the noble Lord, Lord Trees, in this shrinking interconnected world both educational experience and research strength are increasingly measured by internationalism. So to diminish the diversity of UK campuses would be to encourage an exodus of student, research and teaching talent from our shores. Given the need for people to invest in their education and plan their working lives in cycles of several years, this danger arises even with perceptions that the UK might become a less welcoming academic environment as a result of Brexit or student immigration policy, or even political rhetoric alone.
International students are visitors, not migrants. They do not take places from young people in the UK, but rather enrich their learning and their lives. When they leave, they often—not always, of course—become instinctive ambassadors for Britain and the democratic values we seek to preserve and promote around the globe. Further, if some go on to live and work here in the future, that is also, I would argue, to the good of academy, economy and society alike.
Your Lordships need no reminding that this House can seem strange to those outside it—even in this country, let alone far beyond. Yet I have seen it bring enormous value and patient scrutiny to the legislative process, not least in defence of rights, freedoms and the rule of law. That role is, no doubt, an enormous primary responsibility, but in difficult times there may be others besides. One could surely be to unite in reminding those who campaigned for and against leaving the European Union that, for all its bitterness, none in that debate argued for disengagement with the world. Such disengagement is especially impossible in education. Britain cannot be open for business if it is not first open for learning.
Baroness Royall of Blaisdon (Lab)
My Lords, it is a real pleasure to follow my noble friend Lady Chakrabarti, and to be the first to congratulate her on her truly excellent speech. Of course I knew it would be excellent: she has extraordinary experience, expertise and energy, and I am delighted that she is sitting on the red Benches on this side of the Chamber. I have known Shami since the heady days of the Labour Government, and we had some rather interesting discussions about our policies at that time, when I was in the Cabinet—your Lordships will recall debates about the 42 days—but we never fell out over those things. She is a consummate professional—to such an extent that when she was director of Liberty no one really knew what her politics were, quite rightly. Indeed, a noble Lord said to me a couple of days ago that he had been convinced that she would be in the Lords some day soon, but that she would be on the Conservative Benches. Well, their loss is certainly our huge gain.
It could be said that my noble friend has had a baptism of fire, which I deeply regret, but as in so many of her past battles she has come through unscathed, and is relishing her new responsibilities as shadow Attorney-General. With her passion for human rights, justice, equality and social justice she is a tremendous addition to our Benches, and I know that she will make a great contribution to the work of your Lordships’ House.
I too am grateful to the noble Lord, Lord Lucas, for securing this very important debate, and I start by declaring my interest as pro-vice-chancellor of the University of Bath, where we celebrate the contribution of our international and diverse body of students and academics. I am immensely proud of the research undertaken by taught and PhD students as well as postdocs, many of them from outside the UK, which is enabling our country and the world to meet the challenges of the 21st century.
At a time of global uncertainty, when our relationship with the EU is diminished and we are refocusing our relationship with the rest of the world, the soft power at which we have excelled for decades has assumed a greater importance. Encouraging and welcoming foreign students to the UK is one of the most effective ways of garnering and sustaining that soft power. As Prime Minister Modi said on our Prime Minister’s recent visit to India,
“education is vital for our students and will define our engagement in a shared future”.
We can all cite individual examples of people studying in the UK who in their future lives and careers have prioritised a relationship with the UK but, as we have heard, the statistics are staggering. The international education sector is one of the biggest service exports, and one that has significant growth potential. It is also well placed to help our universities weather the implications of Brexit. So why have the Government developed policies to further restrict the number of international students based on what I would call a fictitious number of students who do not leave the UK at the end of their studies? The IPPR recently provided an excellent analysis of the situation, which was followed by further revelations in the press. I hope that today the Minister will use this debate to release the data seen by the Times that indicate that a very small number of international students overstay. So much for evidence-based policies.
The Government also seem to ignore the evidence from a poll carried out by Universities UK that the majority of people do not view international students as immigrants—clear evidence that a more restrictive policy is unlikely to assuage public concerns on migration. As with our main competitors in the international education sphere, Canada, Australia and the US, students should be classified as temporary rather than permanent migrants and should not be subject to a target. My noble friend called them “visitors”, and I think that that is quite right.
One of the key recommendations in the excellent IPPR report, Destination Education: Reforming Migration Policy on International Students to Grow the UK’s Vital Education Exports, was that, like Australia, the UK should set out a 10-year plan for expanding its education sector as part of its industrial strategy and that, as part of that plan, the Government should reintroduce the post-study work visa for STEM and nursing graduates. That makes complete common sense, and I would be grateful for the Minister’s view, especially in light of the expected announcement by the Chancellor in the Autumn Statement that there will be a significant investment in infrastructure spending which will create a vast number of engineering jobs, at a time when we already have far too few engineers to meet demand. There is also a looming crisis with regard to nurses. Dame Julie Moore, chief executive of University Hospitals Birmingham NHS Foundation Trust and Heart of England NHS Foundation Trust has recently said that some of her staff from the EU and Ireland want to go home because of the uncertainties of Brexit and the racist abuse. I can say that it is the same for hospitals in Gloucestershire.
The number of international students coming to the UK has fallen over the last six years, while global demand has grown 60% since 2007 according to the OECD. Our competitors are having a field day—and why would they not? The Prime Minister says, and no doubt the Minister will repeat, that Britain is attracting the brightest and the best, but is that really true and will it continue, especially with Brexit and the uncertainties that surround every aspect of economic life? It is absolutely clear that the Government’s new policy on international students, announced by the Home Secretary and driven in large part by their objective of reducing net migration to tens of thousands, will cause further unnecessary harm to individual universities, FE colleges and our education sector as a whole. It will also harm the economic and cultural vibrancy of the university towns and cities. It simply does not make economic sense to provide additional barriers to attracting international students, and we should not forget the societal and cultural loss that we would suffer. In the globalised world of the 21st century, we must equip our students to be citizens of the world, which means studying alongside international students. With the future of EU student recruitment at UK universities uncertain, and with UCAS figures showing a 9% decrease in applications so far this year, how will the Government communicate that all students from outside the UK are still welcome here?
It is clear that the policies of fear rather than pragmatism are driving immigration policy, which is having many perverse and adverse effects, especially on our higher and further education sector. We have outstanding universities and colleges which make a vital economic and social contribution to our country and enhance our reputation in the world—a reputation that has been severely dented by Brexit. We say that we are proud to be an outward-looking, open and welcoming country, but the policies pursued in relation to overseas students and immigration tell a different story. It does not have to be like this and I have no doubt that the message from your Lordships’ House today will be loud and clear—asking the Government to think again. I hope that they do so and that they not only rethink their new proposals but take the bold decision to remove from the immigration target the international students who are welcomed by the vast majority of our fellow citizens.
Lord Shipley (LD)
My Lords, I first congratulate the noble Baroness, Lady Chakrabarti, on her very thoughtful contribution in her maiden speech. I thank the noble Lord, Lord Lucas, for giving us the opportunity to ask the Government to explain their policy which, as he said, is a complete mess and is losing the UK market share, when overseas students should be central to government thinking.
I agree entirely with the noble Lord and others that counting overseas students as part of net migration figures is a mistake. But there is an underlying conflict in government policy. There was a commitment in the November 2015 spending review to expand international student numbers, and a target of reaching a £30 billion education export figure for non-EU students by 2020. A crucial sentence from the spending review states:
“The number of students from outside the EU at English universities is expected to rise by 55,000, worth more than £1 billion, by 2020”.
There is no sign of this being achieved. It would require around 20% growth when, currently, numbers are broadly static. But the Government also have a target to reduce net migration to the tens of thousands from the current 300,000 and, as we know, they are counting students as part of the total number. They should cease to count them. Can the Minister explain how the commitment to increase the number of overseas students will be delivered given, first, the current malfunctioning of the visa regime and, secondly, the continued obsession with counting overseas students as part of net migration figures when they should not be?
Our country has justifiably earned a reputation as a destination of choice for international students. We have been the second most attractive destination after the USA, with 10.3% of all international students worldwide. We risk losing that reputation through illogical constraints on the issuing of visas. Already, since 2010, some 875 bogus colleges have had their licences to bring international students to the UK revoked. That must be a huge help in achieving the Government’s objectives and should not be used to restrict responsible universities from maximising their recruitment overseas when it is in our national interest that they do so.
This debate, as we have heard, relates to our standing in the world. Our approach is not understood and it is damaging our reputation. It is also damaging the future potential growth of our economy because, in addition to our international graduates acting as ambassadors for the UK and the universities from which they graduate, those who stay create businesses or may work in shortage areas. We need them to succeed if our economy is to thrive post-Brexit. We also need to recognise that the viability of courses for UK students may be in question if overseas student fees are not underpinning them financially. Overseas students sustain many strategically important courses: for example, 28% of engineering and technology undergraduates and 18% of mathematics undergraduates are international students.
Then there is the impact of lower numbers on local economies. In the north-east of England, at the universities of Durham, Newcastle, Northumbria and Sunderland combined, there are more than 12,000 non-EU students from more than 100 countries, all of whom make a valuable contribution to university and city life. According to the 2014 UUK report on the economic impact of universities, the north-east’s international revenue amounted to £244 million in 2011-12. This, together with the estimated £213 million off-campus expenditure of international students, represented a total in export earnings of £457 million at that time. It is estimated that this figure today amounts to some £600 million—and, of course, those international students sustain several thousand jobs across the region. There is also the critical issue of the impact of lower numbers on university income. Tuition fee income from non-EU students makes up 13% of all income for higher education institutions and 29% of all tuition fee income, even though overseas students represent only 14% of all students.
The noble Lord, Lord Lucas, twice posed the question: what is the problem to which government policy is the answer? These are critical issues. I very much hope that the Minister will be able to give us a clear answer to that question.
Lord Bilimoria (CB)
My Lords, I came to the UK as a student from India as a 19 year-old in the early 1980s. Our universities here are the best in the world, along with those of the United States. The university that has won more Nobel Prizes than any other is the University of Cambridge, with nearly 100. I am the third generation of my family to be educated here and now our elder son is at a British university—Cambridge—so that is the fourth generation. I am proud to be chancellor of the University of Birmingham and chair of the advisory board of the Cambridge Judge Business School. I am also president of the UK Council for International Student Affairs, UKCISA, representing the 450,000 international students in this country, along with 160,000 from the EU.
I thank the noble Lord, Lord Lucas, for initiating this debate at this crucial time. Our higher education is, of course, vital to our economy. It is one of our biggest exports. International students contribute directly and indirectly £14 billion to our economy and support 137,000 full-time equivalent jobs. As the noble Baroness, Lady Chakrabarti, said in her excellent maiden speech, they also enrich the experience of our domestic students. Our international students go on to become world leaders. At any time there are 30 world leaders from British universities, including former US presidents. Dr Manmohan Singh, a former Prime Minister of India, went to both Oxford and Cambridge.
What is more, a study carried out in the United States found that of all patents registered at the country’s top 10 patent-generating universities, 76% had a foreign-born inventor. Google, after all, was created by an immigrant. Silicon Valley is littered with foreign student success stories. What chance do we have of emulating that here? Higher education has always been a thoroughly international affair. As we have heard, research has never recognised international boundaries and diversity is recognised for contributing to new ideas and a divergent way of thinking. Thirty per cent of academics at our top universities, including Oxford, Cambridge and Birmingham, are foreign. Professor Alice Gast of Imperial College said:
“Foreigners improve the creativity and productivity of home-grown talent, too”.
The number of university students looking to study abroad is growing vastly. It is expected to grow from 4.1 million to 8 million by 2025. The UK has the second-highest number of them after the United States: 10% as against 19%. But the Government’s attitude to international students has seen our rivals steal a march on us. As the noble Baroness, Lady Warwick, said, I was in India when Prime Minister Theresa May was there. She did not mention higher education once in her speech. As the noble Baroness, Lady Royall, said, Prime Minister Narendra Modi, on the other hand, spoke of the importance of education to Indian students. By the way, our Prime Minister did not once meet the 35 university leaders who were on the delegation to India. On the other hand, our Universities Minister Jo Johnson is a true champion of our British universities.
Australia, Canada and the United States all have strategies to increase the number of international students. Canada aims to double their number by 2020, while Australia wants to increase international students to 720,000 by 2025. In fact, the former Australian Education Minister Christopher Pyne went so far as to thank Britain for its immigration policies because they are driving so many students to Australia’s universities.
That applies not only to English-speaking universities. Indian students are now going to Holland, Sweden, Germany and France. France has a target of doubling the number of Indian students by 2020. The UK Government say that they want to increase the number of international students but there is no specific target. The Prime Minister, when she was Home Secretary, said that she wanted international students to leave the day they graduated. The headline in Indian newspapers was:
“Come to the UK: Graduate, and then get the hell out!”.
The Government have spoken of increasing education exports from £18 billion to £30 billion but there is no specific target and no plan to change the visa rules. The post-study work visa route, which I personally championed in this House in 2007 when the noble Lord, Lord Adonis, was Education Minister, was implemented and the numbers went up significantly. It was taken away in 2012 and we have seen the effect on the number of foreign students. At the moment you can stay on and work but, with so much bureaucracy, it is very difficult to get a job after graduating. Can the Minister tell us how many foreign students are now staying on under the postgraduate work visa scheme that currently exists?
On the other hand, in the United States students can stay on for 12 months without a job offer; Canada allows them to remain in the country for the same duration as the length of their study; and Australia allows graduates to remain in the country for between two and four years. In surveys, the British public overwhelmingly say that they do not mind at all if foreign students stay on and work. There is no downside to it. It helps them to pay for their education; it gives them work experience; they contribute taxes; and they build generation-long bridges with this country. With this in mind, it is no wonder that the number of non-EU students has dropped by 2% and that the number from India has halved in the last four years, while in America it has increased by 9%—and the fastest-growing group of foreign students in America is the group from India, whose number is up by almost 25%.
As we have heard, the Government refuse to remove international students from the net migration figures. Can the Minister assure us that the Government will look into this? It would send a signal that they do not treat international students as immigrants. We desperately need the 160,000 EU students to come and study here in the UK. Can the Government tell us the plans for these students if we leave the European Union?
I think that the Government are being led by a mistaken belief that the British people want to reduce all immigration. There is good immigration and bad immigration, and international students should be encouraged. Almost 80% of the British population want international students to stay on and work in the UK after they finish their studies. The rhetoric surrounding Brexit is just awful. On the other hand, I hear from my colleagues at American universities that Indian graduates go on to earn salaries of $80,000 in Texas and $100,000 in California. Here, it is claimed that 90,000 students overstay. This is based on International Passenger Survey data and it is bogus. We should have visible exit checks at our borders. Can the Minister tell us when we are going to introduce them? The noble Baroness, Lady Royall, mentioned an unpublished report referred to in the Times which shows that only 1.5% of international students stay on.
In conclusion, India was the jewel in the crown of the British Empire. Today, British universities are the jewel in the crown of this country. The Government need to change their attitude towards international students, because the impact of Brexit and the uncertainty it has caused are damaging the higher education sector, and the Government’s attitude is harmful and undermining. I think that the attitude to immigration is economically illiterate and that the Government’s attitude to international students is economically super-illiterate. If the Government change their attitude, we will remain an educational superpower for the foreseeable future, with international students being our strongest element of soft power in the world.
The Duke of Wellington (Con)
My Lords, I thank my noble friend Lord Lucas for initiating this debate on such an important subject. The only problem with the debate is that we all agree with each other, and I certainly agree with most of what has been said.
I congratulate the noble Baroness, Lady Chakrabarti, on her excellent and inspiring maiden speech. She comes to the House with a huge reputation as an advocate of civil liberties in this country and abroad. This House is surely enormously strengthened by having as a Member somebody with her experience and knowledge. She is very welcome here.
I declare an interest as a former chairman of King’s College London. Having served there for nine years, I know well the importance of foreign students at so many of the leading universities in this country, perhaps particularly in London. The problem, of course, is that students are included in the immigration statistics. Those who voted for Brexit and those who are concerned about immigration do not, on the whole, consider students to be immigrants, and even if they do, they are not particularly concerned about student immigrants. Like other noble Lords, I urge the Minister, whom I much admire, to try to persuade the Home Secretary to take students out of the immigration figures.
If the Government really do want to get immigration down to below 100,000, that will be completely impossible if students continue to be counted. I have heard the Government’s response that it is not possible to take students out of the immigration figures because all countries are required to use the United Nations definition of an immigrant: a person who comes to a country with the intention of staying for more than 12 months. However, the United States of America apparently has found a way round this. It produces two sets of figures: one based on the United Nations definition and one prepared by the Department of Homeland Security, which makes the distinction between permanent and temporary immigrants. Would it not be sensible for this country to try to do something similar?
As has been mentioned, only a year ago it was government policy to try to increase international student numbers by 20% over the next few years. The numbers are now starting to fall and this is mainly because of visa and immigration problems. My main concern is that there have been a number of intimations from government that overseas students are not welcome in the United Kingdom. Far from discouraging students, we should be encouraging overseas students. Various figures have been suggested, but non-EU students pay in excess of £4 billion a year to British universities. Universities are an important service industry to this country.
Britain has 32 universities in the top 200 in the world. This compares with 62 in the United States, a country with five times the population of our own, 22 in Germany and only four in France. The fact is that in this country we do universities very well, and we should be very proud of that. We should recognise the contribution that UK universities make to the country and to the economy, both financially and academically. Tens of thousands of students from India and China want to come here but we are losing market share because it is more difficult to get a visa to come here than, for instance, to the United States.
We all know that in the past, student visas were granted for study at educational establishments that were not approved colleges or universities. Clearly, there must be a rigorous standard set for students to come here, and only students coming to study at recognised institutions should be given a visa. But we are competing with other countries to attract the best students and it should be no more difficult to come here than it is to go to the United States, Canada or Australia, to take three examples.
In conclusion, it is clear that noble Lords in all parts of this House are asking the Home Secretary and her Ministers to re-evaluate the immigration policy as it pertains to students. The students do not have to come here, and the best will go elsewhere if we do not make it easier for them. We should recognise that it is in the interests of this country for them to study here. Most who do will go home with a higher opinion of this country and it is in our national interest to get this right.
Lord Lipsey (Lab)
My Lords, I chair Trinity Laban Conservatoire of Music and Dance, which is one of the four great conservatoires in London. Perhaps the proudest moment in my time as chair was in June when Radio 3 broadcast live three of our finest pianists from St John’s Smith Square—three of a very fine crop. Noble Lords should note the names because they will hear them again: Giulio Potenza, Gen Li and Jenna Sung. They should also note that those are not English names. Indeed, they are not English: Giulio is from Italy. Gen is from China and Jenna from South Korea.
Of our students, 111 are international, which is 10% of our student body. Each brings us £15,000 to £20,000 a year, and it is not possible financially simply to replace them with British students because an extra British student would yield only £9,000 to us under the current fee regulations. But they bring something more important than money. They bring talent, which raises standards all round. They bring cultural diversity: music is an international language, but it has many accents. They bring determination: it is not nothing to move halfway around the world in the pursuit of your chosen vocation. They also bring reach to Britain abroad, which may last for many years. Why is the House debating this issue this afternoon? Why is it not a no-brainer? Let us face it and be honest: we are debating it because the Government seem half inclined to chop this flourishing tree off at its roots.
I will concentrate on students from outside Europe if only because I spoke on Brexit and students last week. Three out of every four students come from outside the European Union. The threat to them is real, too. The Government have them in their sights. The Prime Minister has long opposed taking them out of the immigration numbers, as we have heard in this debate, although only a quarter of the public think that they should be regarded as immigrants. Amber Rudd, the Home Secretary, singled them out for some remarks in her conference speech although to be fair she has also said a few positive things about international students.
It is not only about what the Government think or even what they say: it is a question of what the world and its most talented individuals hear. The world sees a country that has voted for Brexit, where there have been troubling instances of immigrants being hassled in the streets and now sees a country that is adding a thickening bureaucracy, which makes applying for student visas more problematical and which is toying with adding new barriers. Is this really, as they say, to improve quality or is it just a cheap and easy way to cut the number of immigrants?
There is another obstacle. What happens to students when they finish their courses? Many of the students at Trinity Laban would like to continue their music and dance careers in Britain. Already they face an obstacle in that their earnings are not high, but to stay in a job here beyond a year, a student has to show that he or she will earn £20,800 a year or more, which is not easy for a young jobbing musician. The Government seem to be contemplating making things even harder in terms of getting a job. Ministers have gone around brandishing ludicrous overestimates of overstaying—the Times leak put the true figure at less than 1%. I cannot help noticing that I get pleas from time to time from young ensembles that find their lead violinist or cellist is being denied a visa and so their career and planned engagements are being cut short.
To sum up, if we put off overseas students, my establishment, Trinity Laban, will suffer. If we lost all our international students our revenues would fall by more than £2 million, which is probably by around 10%, and that would be very bad. South-east London, where we are situated, would suffer. Our international students alone bring some £5 million to the local economy, which is not a strong one in a very diverse area, and of course Britain will suffer. In financial terms, according to the Commons Home Affairs Select Committee, international students contribute some £7 billion to Britain’s economy and they are the second largest net contributor to Britain’s balance of payments. But it is not the financial benefits, important though they are, that make me so nervous about this threat to the future. It is the threat that cultural chauvinism will replace international diversity. Globalisation no doubt has its pros and cons, but one incontestable pro is the vitality it brings to intellectual and cultural endeavour. We put that at risk at our peril.
Lord Green of Deddington (CB)
My Lords, I thank the noble Lord, Lord Lucas, for initiating this debate, but I think my contribution to it may be slightly different from that of some of the previous speakers. I am sure that the noble Duke, the Duke of Wellington, will be glad of that. I should first of course declare an interest as chairman of Migration Watch, unpaid of course, and I think I should say from the outset that while I am strongly opposed to mass immigration I am firmly in favour of a moderate level of immigration, and that surely is a natural part of an open society and an open economy. So I readily join with noble Lords, all of them in fact, who have spoken of the value of foreign students to our economy and our universities, and as “ambassadors” for the UK on their return. I have met them myself all over the world. Indeed, there is very little in what noble Lords have actually said in the debate with which I would disagree.
But most of the arguments that have been made fall to the ground if the students concerned do not return home, and that is where the issue lies. The noble Lord, Lord Lucas, asked what the problem is with that, so perhaps I can help. The problem is the elephant in the room. The elephant is that the system—and we must recognise it—for the admission of students to the UK is in recovery mode. Some noble Lords will remember that following the introduction of the points-based system by the previous Government in, I think, 2008, student visas shot up from 230,000 a year to 300,000 in one year. Indeed, in late 2009 consulates in the Indian subcontinent and China had to be closed to student applications for several months. A review conducted by the National Audit Office in 2012 found that, in 2009 alone, between 40,000 and 50,000 students had entered the UK for work rather than study, as it put it rather delicately. In other words, there was massive abuse that in the longer term could only be damaging to our reputation as a source of education. Fortunately the Government have clamped down on it; I recognise that. To a certain extent this is ancient history, but it illustrates the pressures that can so quickly develop in the system. As one noble Lord mentioned, 850 bogus colleges have been closed down. But that is the background which cannot be ignored, and it seems to be the reason that underlies the Government’s policy, which we definitely support.
Despite that chequered but important history, the present regime for foreign students is actually a generous one. There is no limit on the number of genuine students—I stress the word “genuine”. There is no cap on those who wish to switch to work provided that it is graduate work and that they earn £21,000 a year. So I have to say that I am rather surprised by the continuing barrage of negative publicity about the offer that the UK gives to foreign students. It is not coming from the Government and it is certainly not coming from Migration Watch. It appears to be coming from the sector itself, but that is surely damaging to its own interests. As the noble Baroness, Lady Chakrabarti, mentioned, perceptions are very important. If all people hear is constant complaints from every academic in human history, they will think that something is seriously wrong. Would it not be much better for the sector to emphasise the positives of our offer and, where there are problems, to sort them out privately and quietly with the Government, as the noble Lord, Lord Lucas, suggested?
Underlying this is a disconcertingly wide gap between the inflow and outflow of students as measured by the International Passenger Survey—if that is correct. The average inflow for the past four years has been 127,000 and the average outflow 47,000, so there are 80,000 students a year over those four years for whom there is no evidence of departure—there is no doubt about that much. That is a huge number; it is about a third of all non-EU migration. It is quite possible that the exit checks that have just been installed show that that has been an undercount, but we will see. Rumours of 1% are extremely unlikely—that would mean that the IPS was missing 75,000 students a year, which is hardly possible. The prudent course has to be to await clarification before revising policy in either direction.
At least 10 noble Lords have called for the student numbers to be taken out of the immigration statistics. That is the worst possible route to take. As everyone knows, an international migrant is defined on a basis agreed with the United Nations. That is why all our competitors—yes, all our competitors—include them in their migration statistics. Indeed, it is the key to understanding demographic change and we must not fiddle about with it for other purposes. In any case, it would not work. The press would immediately add in the figures for students and the Government would be perceived as fiddling the figures on a matter of real importance to the public. They are right to rule it firmly out.
There have been a number of calls to widen the scope of post-study work but it is interesting to note that, when it was made a requirement that such work should be at graduate level, the number of foreign students taken in by employers fell from 55,000 in the one year to 6,000 in the next. It seems that industry was not desperate for their services.
I conclude as I began: I favour foreign students, provided that they are genuine. We must make sure that they are. In practice, that will turn on developing the exit checks which are now at a very early stage.
Lord Judd (Lab)
My Lords, I declare an interest as a governor of LSE for 30 years and now an emeritus governor, and as a life member of court at Lancaster University and Newcastle University. I want not for the first time to put on the record my appreciation for the noble Lord, Lord Lucas, who introduced this debate. He has a long-standing and highly respected record of deep and informed interest in educational matters.
For me, it is a very special occasion to be able to speak in the same debate as that in which the noble Baroness, Lady Chakrabarti, has made her maiden speech. I have been a long-time admirer not just of what she stands for but of her effectiveness in achieving results.
We are at a very interesting moment in our history, because the Higher Education and Research Bill is coming up. I cannot separate consideration of this issue from what we will be considering over the coming months. The question I am sure I will pose again in the context of that debate is, what is a university? We all talk about the operation and organisation of universities, and now we are talking about the relationship of immigration to universities, but what is a university? For me, if a university is not about originality, imagination, vision and scholarship, it is not a university. It is very important for our country to have good vocational training centres, I am sure of that, but that does not make them universities.
My next point is that the inescapable first reality of life is that we are locked into an international community. Unfortunately, not enough of our fellow citizens understand this, but there is simply no way we can have a future as a nation without recognising that international interdependence and making it central to our whole purpose of governance and what we are trying to achieve. If we do not, we are betraying future generations. It is as simple as that, because there is no future for Britain unless we understand that and respond appropriately.
I believe, therefore, that the essence of a university is that it must, by definition, be a representation of the world, particularly when we like to parade such slogans as, “We are a world-class university”. How on earth can a university be world class unless it is a representation of the world? By definition, the quality of our education depends upon the international reality in the university community itself. The research depends upon it, the teaching depends upon it, the student experience depends upon it and the development of student potential depends upon it. It has to be not only intellectually understood but sensed at every level that we are indispensably part of an international community, and we are developing and approaching our learning in that context.
I have rather more hope on that score—and I really have applauded the vision that has been expressed in this debate—than the previous speaker apparently has, but I shall finish on a rather different point. I was very struck by a rather urgent message from the British Medical Association, which I am sure I am not alone in having received. I therefore quote unapologetically from it:
“Medicine thrives on the interchange of experience, knowledge and training across countries and backgrounds. We believe that further restrictions on international medical students coming to the UK through changes in immigration policy will inevitably lead to a consequent decrease in opportunities for UK medical students to study overseas and so limiting opportunities to collaborate and share experience, knowledge and training. We believe this will be detrimental for medicine, patient care and medical research”.
Given that we spend so much time in this place discussing the health service, are we going to take that message seriously? The BMA continues:
“Furthermore, international students who choose to study at a UK medical school are committed to training and working in the NHS and are considered as part of the future NHS workforce by NHS employers. These individuals have been factored into long-term NHS workforce planning and the opportunity to continue postgraduate training in the NHS helps make UK medical schools an attractive option for prospective students”.
The BMA says there is already evidence that the number of people wanting to study medicine here is declining. It makes the point that others have made, which I underline: it is not just a matter of immigration policy; sadly, it is symptomatic of a much bigger issue, which the noble Lord, Lord Lipsey, emphasised. What does Britain look like to the world in 2016? What is the image of Britain? If we in this place do not take responsibility for that, I do not know what the hell we are here for.
Lord Rees of Ludlow (CB)
My Lords, I add my welcome and congratulations to the noble Baroness, Lady Chakrabarti. I declare an interest as a member of Cambridge University, where, in round numbers, 20% of undergraduates and 60% of graduate students are from abroad—from the EU and the rest of the world. The proportions in other universities are not very different. Overall, the UK is second only to the US in attracting foreign students. There is a general consensus in our universities that this is a plus. Rather parochially, for instance, foreign students help sustain specialised courses that would not be viable without them, and our standing in university league tables depends on our universities remaining a magnet for international talent. It is surely a real own goal to discourage the brightest from coming here by vexatious visa requirements and a declared reluctance to let even the brightest stay on afterwards.
Under the coalition Government, as we have heard, there were clearly tensions between BIS, where the key Ministers were mindful of these issues, and the Home Office, where the priority was to cut net immigration. The restrictions generated a damaging perception that the UK was no longer welcoming. It was especially disquieting that the number of Indian students coming here halved in just four years. Students from the subcontinent no longer look towards the UK, as their parents’ generation did. Not only in India but everywhere else, UK-educated students are a big potential component of our soft power. It is a huge benefit when people we deal with around the world are familiar with the UK and have a lifelong network of contacts with this country.
Incidentally, such contacts can be especially valuable when they straddle national barriers where there are tensions or hostilities. A high-level recent instance of this, far from these shores, was the recent nuclear deal with Iran. The Iranian Minister and the US Secretary of Energy had been PhD students together in the same department at MIT. They knew and respected each other. This building of confidence surely eased the path to a difficult agreement. Surely we should promote exchanges globally.
Of course, what is looming large at the moment is the risk that our large-scale exchanges with mainland Europe will be threatened by Brexit. That is depressing because the strengthening of these links, especially in science, has been one of the really positive developments stemming from the EU. Forty years ago, our main scientific exchanges were with the US. I met my European contemporaries because we all went to the US. Now Europe-wide academia is far stronger and more interactive. Fresh graduates migrate from the UK to France, Holland, Germany and Italy, and there is a reverse flow into this country.
In my university there is an especially strong cohort of EU undergraduates, many from Hungary, Poland, the Czech Republic and other nations with a strong academic tradition. If we did not accept them, they would go to top US universities. Surely we are right to welcome them in this country, not only for what they bring to us but because they help to develop a pan-European community and culture. Indeed, it is well known that the younger generation are more pro-EU than their elders. These students see themselves as Europeans with a shared culture. They hope that our continent can be a progressive political force in a turbulent and multipolar world, where the challenges—be they in energy or climate—cannot be tackled at national level.
Finally, I will highlight two reasons why, even with a supportive visa regime, our universities will face growing challenges. First, the status of English as a world language has long been a benefit to us but this uncovenanted advantage is being eroded by the initiation of courses taught in English in the countries of mainland Europe. These compete with us and if we are perceived as unwelcoming we will lose out to them.
A second important trend is the advent of massive online open courses, known as MOOCs. These have perhaps been somewhat overhyped. The internet can supplement but not replace the undergraduate experience. However, they have a chance of succeeding as stand-alone courses in providing vocational master’s-level courses, taken by highly motivated mature students. Residential courses in, for instance, law and business studies are current money-spinners for universities, so it concerns their budgeteers that the growing availability of MOOCs will reduce the willingness of students to pay for expensive traditional courses. The corollary of this is that universities in this country should not leave MOOCs to the Americans; they should work hard to liaise with the Open University, which has a world lead, to develop these MOOCs so that we can play a part in this growing new market for distance learning.
Even if the winds were otherwise in our favour, there would be problems in sustaining current student levels. The self-imposed handicaps of the Home Office, which aggravate the task of attracting the best students, are therefore especially to be deplored. That is why we should resonate with the concerns expressed by so many speakers today, and thank the noble Lord, Lord Lucas, for initiating this debate.
Lord McConnell of Glenscorrodale (Lab)
I, too, thank the noble Lord, Lord Lucas, for initiating this really important debate. I want to record a number of relevant interests in my commitment to universities, to teaching and to the importance of education.
If we were to recruit a group of cultural philistines and educational vandals, and send them away for a weekend to devise a policy that could do the most damage to this country in the shortest time, they would be hard pressed to come up with a better outcome than the policies and practices of the Government that we are debating today. They are incredible at this important time of global relationships and international economic competition, when for example in China there are now more graduates every year than in the whole of the European Union and Russia combined.
On a recent visit to Nigeria, I met a young businesswoman being supported by DfID. She was setting up her own business in northern Nigeria in the heart of Boko Haram territory and employing local people who are trying to create a decent economy in a large Commonwealth country. Her higher education was in India and China, not in the United Kingdom. This is the kind of world we live in today, yet we have devised a policy that discriminates against talented people and then deters them from coming to this country and making a connection with it. It damages our reputation and our economy—and it damages the pursuit of human knowledge in a way that we should be ashamed of.
I will reference specifically the Scottish dimension because, as I mentioned in your Lordships’ Chamber back in July, we established the Fresh Talent programme in Scotland with the enthusiastic support of the then Home Secretary, my noble friend Lord Blunkett. This was back in 2002 and it was brought in in 2004. It extended the post-study work visa to Scottish universities and then to Scottish colleges for up to two years as a precursor to what happened in the rest of the United Kingdom. There was no abuse of that system. It helped us turn round Scotland’s historic population decline and made it absolutely clear that Scotland was open for business, knowledge and talented people. It was an outstanding success, so much so that it was copied elsewhere in the UK—yet there are no Scottish universities or colleges involved in the pilot project on tier 4 visas that was established by the Government in July.
I asked the Government a number of questions after my initial Oral Question in your Lordships’ House. I am astonished to discover that the four universities—all from the south of England and from the higher-ranked universities of the United Kingdom—were consulted in advance, but no other universities or colleges were consulted in advance about the pilot project. The data on which the universities are supposed to have been chosen are secret and we cannot scrutinise them because of “commercial confidentiality”. Yet at least one Scottish university—the University of Edinburgh—has a minuscule number of visa refusals on first application, which is meant to be the criterion chosen for this. Colleagues in universities and colleges across the country will not believe that these four universities were chosen objectively unless the Government publish those data and review the universities that were chosen for the pilot. It is simply wrong that the north of England, Scotland, Wales and Northern Ireland were missed out of that pilot project, and that should be reviewed, even at this late stage.
The other issue I want to mention today is our international soft power. We have debated in this Chamber on many occasions the importance of Britain’s soft power in the world: our role in the Commonwealth, the United Nations Security Council, the European Union and other international bodies and the connections that we have internationally, economically, educationally and culturally. Surely it has to be part of that soft power that we make these connections with people who come to study in this country—and not just those who go on to be world leaders, whom other noble Lords have mentioned, and I understand their point. In the now well over 30 years since I left university, I have met people who I studied with in business, academia and politics on almost every continent of the globe. They are working hard and making a success of themselves but they will retain a connection with the United Kingdom all their lives because of where they started their undergraduate or postgraduate education. It seems to me fundamentally at odds with our objectives as a peace-loving, internationalised nation that in future we would deter these individuals coming to this country and being part of that wide international network.
The fantastic American writer Maya Angelou, who sadly is no longer with us, once wrote:
“Perhaps travel cannot prevent bigotry, but by demonstrating that all peoples cry, laugh, eat, worry, and die, it can introduce the idea that if we try and understand each other, we may even become friends”.
Surely in this day and age, at this time, when there is so much global uncertainty, insecurity and fear of the other, bringing people together, educating them together and sharing knowledge, research and teaching has to be one of our international goals. I urge the Government to treat this matter more seriously and to rethink their policies.
Baroness Garden of Frognal (LD)
My Lords, I add my thanks to the noble Lord, Lord Lucas, for securing this debate and achieving a greater level of consensus among the speakers than is often the case in this House. Before gathering together some thoughts and issues which will almost certainly repeat the contributions of others, I, too, welcome the noble Baroness, Lady Chakrabarti, and congratulate her on her maiden speech. We were expecting an insightful and powerful speech, and that was what we got. We were not disappointed, and we look forward very much to her future contributions to our debates.
As we have heard, our world-renowned universities and colleges are facing considerable challenges from Brexit, with all the uncertainties over EU funding, research and collaboration. If it was important before the referendum for the UK to be open and welcoming, it is even more critical now that we should be taking every possible measure to ensure that we can still attract international students. Yet, as we have heard from all sides, the Government insist on counting them as immigrants, while at the same time declaring that immigration must be reduced to meet a target that has little regard to the needs of the country.
Reference has been made to the recent polling carried out by Universities UK which found that the majority of people do not see international students as immigrants. They appreciate that students are here only temporarily and bring enormous benefits both economically and in terms of international relations. They add to the UK’s influence and soft power, which was mentioned by the noble Baroness, Lady Royall, by the noble Lord, Lord McConnell, and by other noble Lords. It is worth noting that 55 current heads of state—representing more than 25% of all the world’s countries—benefited from an education in the UK. I like the idea suggested by the noble Lord, Lord Lucas, of a UK education database. Perhaps we might include those mentioned by right reverend Prelate—St Augustine could be in there. We could spread the field wider to see just how influential the UK may have been in days gone by.
Why can we not follow the example of more welcoming countries by designating students as temporary migrants or visitors, thus removing them from the stigma of being part of immigration totals? We have heard this from all sides, including from the noble Baroness, Lady Warwick, the noble Lord, Lord Trees, my noble friend Lord Shipley and the noble Duke, the Duke of Wellington—many noble Lords concentrated on this. Even the noble Lord, Lord Green, spoke some welcoming words about international students—although he also voiced some contrary views. The noble Lord, Lord Lexden, brought in the impact on independent schools, which should form part of the whole picture.
As the noble Lord, Lord Lucas, asked: what is the problem? The noble Lord, Lord McConnell, talked of the vandalism of the policy. There appears to be a fear somewhere that vast hordes of students will stay on illegally after their studies and cause havoc and unrest in society. But the recent unpublished report that has already been mentioned showed that only around 1,500 students do not leave each year, with no evidence of massive harm from those who do not leave.
It is never a bad thing to make policy decisions on the basis of evidence. So will the Government take steps to improve the reliability of exit checks, which could help to prove the case either way? It is not right that, currently, EU students considering study in the UK from 2018-19 have no certainty regarding their tuition fee status and access to student finance. Can the Government give any indication on when clarification on this point will be forthcoming? This certainly contributes to the decreasing attraction for EU students to study here—yet their presence, as we have heard, has great cultural value for UK students, who learn more about the world and establish friendships and networks which help secure good relations, which are in too short supply in our fractious world.
If the position is difficult within universities—which have been the main focus of most contributions—there are additional issues for colleges, which attract a wide range of students studying different courses from a range of a backgrounds. Existing Home Office regulations do not always align and serve them well. I am glad that colleges were included in this debate, even though universities have been the main focus. Do the Government take account of the important role that colleges play in educating international students? Currently, around 50,000 international and EU students are studying in further education colleges—a small percentage, but they provide an important financial, educational and cultural contribution. Colleges offer a valued progression route, with work-based qualifications which contribute to UK exports and help the sector widen the horizons of its students.
Following changes to the system in July 2015, college students are currently prevented from extending their leave in the UK for any reason. This makes it impossible for the thousands of students studying sub-degree programmes to progress on to higher education, thus making our provision less attractive to ambitious international students.
We heard from many noble Lords, my noble friend Lady Smith among them, about the complexity of the visa system. The choice of the UK as a destination of study for university students has been further undermined by changes to the post-study work route. Tier 4 visas provided opportunities for graduates to work in the UK for two years after they had completed their courses, but that is now reduced to four months. The reduction in post-study work opportunities has had a particularly disastrous impact on some markets, such as India.
The operation of the tier 4 regulations, changes to tier 2, suggestions that there will be even more onerous regulation and government rhetoric about international students have been noticed and reported on around the world. Alarmingly—but perhaps unsurprisingly—the number of Indian students studying at UK universities has fallen by 53% since 2010-11. I note that the noble Lord, Lord Bilimoria, was with the Prime Minister on her recent visit to India. Would that she had listened to him and taken the opportunity to reassure such an important country that its students would be welcome here by announcing changes that would have cost her nothing but provided a significant boost to our universities and colleges.
I feel that I ought to throw a few figures in the debate, as others have. Independent research has estimated that in 2011-12 non-EU students made a £7.3 billion contribution to UK GDP, rising to £9.1 billion when EU students are included, and supported 137,000 jobs across the UK, 170,000 when EU students are included. But the number of international students has been stagnant in recent years while competitor countries take advantage and see significant increases. That direct contribution of international students makes up an average of 20% of all universities’ revenue across England, and as such it is a crucial element of a university’s business operations. Having these sources of funding enables it to invest better in all its students and engage in research and innovation projects with its local community or with businesses.
As we have heard from the noble Lords, Lord Rees and Lord Trees, international students also enable programmes to be viable that would otherwise be lost through a shortage of UK students with appropriate skill or motivation. This is true in many of the STEM areas and in postgraduate studies. Universities fear losing essential revenue, but so too do they fear losing opportunities for learning and scholarship in areas where international students are key to numbers and continuity.
There are considerable off-campus benefits to the community, too, including the benefits to UK students of becoming familiar with different countries and cultures, as we heard from the noble Baroness, Lady Warwick, and the noble Lord, Lord Trees. The noble Lord, Lord Lipsey, spoke of his musicians and the fact that they bring talent to our country. The noble Lord, Lord Judd, spoke of the importance of medical schools and the international aspect to their studies. So how will the Government try to ensure global opportunities for UK students in future in order to guarantee that UK graduates have the international skills necessary to compete, which they can more readily acquire while working alongside overseas students, and in order to avoid the cultural chauvinism mentioned by the noble Lord, Lord Lipsey?
The Minister has heard overwhelming, if not absolutely unanimous, support in this House for a change of policy towards overseas students. I urge her to use her good offices with the Prime Minister and the Home Secretary to persuade them to take one very simple step: to remove students from the immigration figures. It would be a small step but one that would have major repercussions among those students we want and need to attract to our universities from countries where we need to do far more to show that the UK is still an open, welcoming and influential player on the world stage. I look forward to the Minister’s reply.
Lord Kennedy of Southwark (Lab)
My Lords, I congratulate the noble Lord, Lord Lucas, on securing this debate. I particularly congratulate my noble friend Lady Chakrabarti on a truly excellent maiden speech. I hope we hear from her many more times in this House. She has a wealth of experience and knowledge to bring to a wide range of debates, as we have heard today. We will all benefit from hearing more from her.
This Motion is most timely and enables us to further understand the position of the Government; it gives noble Lords an opportunity to offer some advice to the Government on the application of immigration policy and how that applies to overseas students. My first point, which has already been referred to by the noble Lord, Lord Trees, and others, is that polling has consistently shown that the British public see international students not as long-term migrants but as valuable temporary visitors. International students arrive in the UK and complete their studies, and then the majority go home afterwards.
A ComRes poll referred to by other noble Lords revealed that only a quarter of British adults think that international students are immigrants. The same poll found that 75% of British adults would like to see the same number of, or more, international students coming to the UK to study. Without question, we have some of the finest universities in the world. Our institutions have educated some of the finest minds on the planet, and that has been of great credit and prestige to our universities, but also to the United Kingdom as a whole. Prime ministers, presidents and world leaders in almost every field of literature, science, engineering, business, finance, medicine and every other discipline have studied as international students here in the UK. What a great benefit that has been to our country and what a source of pride, as the noble Lord, Lord Bilimoria, said.
The international student market is worth billions of pounds to the UK economy. International students pay their course fees and accommodation, they spend money on and off the campus, supporting the local economy, they make little demand on public services and they are now required to pay the NHS surcharge. In many ways, it is a win-win for the UK for the universities, the local economy and the students themselves.
The Government have ambitious targets to grow the number of overseas students, and I welcome that. It is very much to the benefit of the UK that we increase the number of international students coming here and that the UK is viewed as a welcoming place to live, study, learn and develop. They bring benefits to our students, as my noble friend Lady Royall of Blaisdon said.
The other benefits to the UK of growing numbers of international students include the soft power benefits, to which many noble Lords referred. When students return home, they have a positive attitude to the UK, an appreciation of our values, trust and respect for what this country stands for in the world as they become leaders in future in their chosen profession, as the noble Lord, Lord Trees, and my noble friend Lord McConnell said.
The problem we have is conflicting government policy that sends out a confused, mixed message. I very much agreed with the noble Lord, Lord Lucas, when he spoke about the Home Office not being clear what it wants or what is its position. It must have in its sights the importance of international students to the UK economy. On the one hand, the Government say that they want to increase the number of international students and that they are very welcome here; on the other, their actions give a very different impression to prospective students, with tighter controls and the UK appearing unwelcoming and unfriendly to international students.
The insistence on keeping student numbers as part of the policy target on immigration has been discussed many times in your Lordships’ House and elsewhere, but the Government are just not listening. I am not asking them to change how net migration figures are reported—it is an internationally recognised definition—but have they considered doing what is done in the United States of America, to which the noble Duke, the Duke of Wellington referred? A set of statistics using the same UN definition is produced but the Department of Homeland Security also produces a second set which makes a distinction between permanent migrants and those classed as non-migrant admissions. The effect of clashing UK government policy outcomes is that our competitors, who are also seeking to grow their share of the international student marketplace—places such as the United States, Canada, Australia and New Zealand—are all making inroads into the number of students we could reasonably expect to come to the United Kingdom. While our figures are stalling, there is real growth in the number of international students studying in other countries.
I want to address some of the points made by noble Lords during the debate. I very much agreed with the remarks of the noble Lord, Lord Lucas, when he spoke about the excellent universities and colleges throughout the UK and said that it was wrong to cast aspersions about the quality of courses or institutions. My noble friend Lady Warwick of Undercliffe made excellent points about the soft power benefits that accrue to the UK from a flourishing international student programme. I know the east midlands very well—I worked there for many years—and I wholeheartedly endorse her comments about the university nexus in Nottingham, Derby, Loughborough and Leicester.
The noble Baroness, Lady Smith of Newnham, commented how difficult it is for international students to get a visa to undertake a course at Cambridge University, one of the finest institutions in the whole world. That can only be damaging to the UK and its economy. I very much agree about the positive impact that international students have on communities, referred to by the right reverend Prelate the Bishop of Winchester. My noble friend Lady Chakrabarti made similar points about the contribution of international students to the local economy, supporting local jobs, and the risk of exodus posed to the teaching and research professions by the challenges of Brexit and the UK being perceived as a less welcoming place.
My noble friend Lord Lipsey made a key point when he said that the problem was what the world sees when looking at the UK. Now we have voted for Brexit, the Government making things difficult for international students is not the best way for a trading nation to engage with the world, and can only damage us further.
I did not generally agree with the contribution by the noble Lord, Lord Green of Deddington, although he did highlight some important issues, on which the Government clearly put great emphasis in developing their current policies, which are doing us such damage.
The concerns expressed by my noble friend Lord Judd on the effect that the Government’s policy is having on the number of people who want to come here and study medicine, and the effect that is having on medical advances, the NHS and the healthcare and well-being of our nation, should also be of concern to the whole House.
As I bring my remarks to a close, I have a number of questions for the Minister. I hope that she will be able to answer them today, but if she cannot I shall, of course, be happy if she writes to me afterwards. First, what are the Government doing to boost the appeal of the United Kingdom as the first choice destination for international students? Will the noble Baroness agree to speak to the Prime Minister and the Home Secretary to make the case for reviewing the procedures applied by the UK authorities to make the entry system both robust and fair, but not to have a system that is seen as unwelcoming to international students? That can only be damaging to our country.
What does the noble Baroness think is the reason for the drop in the number of Indian students coming to study here and the considerable increase in Indian students going to study in the United States? Does she agree with me that a perception, real or not, that the UK is not welcoming to international students is hugely damaging to the UK economy? Can she tell the House why the Government cannot see the damage they are doing to the economy, and to our reputation abroad, with their attitude to international students?
In conclusion, I again thank the noble Lord, Lord Lucas, for bringing this Motion to your Lordships’ House for debate, and again congratulate my noble friend Lady Chakrabarti on her excellent maiden speech. I look forward to the Minister’s response to the debate. My final point is that I hope that she will report this debate back to the Prime Minister and the Home Secretary. Noble Lords have highlighted the perilous situation we find ourselves in in this country following Brexit, and also the problem of how we are viewed in the world, and the damaging effect that is having on the country.
The Minister of State, Home Office (Baroness Williams of Trafford) (Con)
My Lords, I begin by thanking my noble friend Lord Lucas for initiating this incredibly popular debate, which attracted almost 20 speakers, and also welcome to her place the noble Baroness, Lady Chakrabarti, and congratulate her on her maiden speech. Like me, she is an immigrant, and also like me, she sounded quite emotional speaking in this House for the first time. I have to say that I felt exactly the same. I look forward to hearing from her, as the years go on, in this House.
It should come as no surprise to anybody that on the subject of higher education, noble Lords bring unparalleled experience. I felt quite humble listening to some of the background stories and hearing about some of the universities with which noble Lords are associated. I have to say—although noble Lords may not agree with me—that I do not think there is any real difference of opinion between any of us on this topic. We all share the desire to ensure that the United Kingdom continues to attract the best and brightest international students to study here. High-quality international students enrich the intellectual life of the institutions where they are studying. As the noble Baroness, Lady Warwick, says, they increase the soft power of the UK as a country, and they enhance the experience of the domestic students here. I hope that, as the noble Lord, Lord Kennedy, says, they return to their home countries with fond memories of their time in the United Kingdom.
We already have an excellent offer for international students, which is why the UK remains the second most popular place in the world to study, behind only the United States. There is no limit on the number of genuine international students who can come here to study. That is a very important point. We do not propose to cap or limit the number of overseas students who can come to study in the UK.
Our approach is based on two key principles, which I hope will be shared by all noble Lords. First, we want to ensure that UK education institutions can attract the best and brightest. Secondly, we need to be vigilant and guard against abuse of the student migration route. I do not want to bring politics into what has been a bipartisan debate, with very good contributions from all around the House, but I have to say that the student immigration system the Government inherited in 2010 was a mess. Abuse was rife, and steps needed to be taken to restore it to a sensible state. Some 920 institutions have had their right to sponsor overseas students removed, and the effects are clear to see. The proportion of overseas students now attending higher education institutions has risen by 16%—from 143,000 in 2010 to 166,000 in 2015.
I would not want your Lordships to interpret this as an attempt to restrict those who are genuine in their desire to study. Visa applications from university students are now 14% higher than they were in 2010. Visa applications to Russell group universities, of which much mention has been made today, are 39% higher than in 2010. The grant rate for tier 4 general visa applications has increased every year since 2010, and 94% of such applications were granted in 2015.
Of course, applications from some nationalities are down, as the noble Lord, Lord Bilimoria, pointed out. I shall address that later. Equally, applications from other nationalities are up, particularly from Chinese students. There are natural fluctuations, but the fact that overall applications to universities have increased in the last five years is encouraging and suggests that any particular falls should not be attributed to Home Office immigration policies.
This Government are determined to help our best institutions attract the best international talent from around the world. Let me give noble Lords a recent example. We recently launched the tier 4 visa pilot. Four institutions, the Universities of Bath, Cambridge, Oxford and Imperial College, chosen because of their consistently low visa refusal rates, are piloting a scheme whereby certain visa eligibility checks have been delegated to the universities and the documentary requirements for students taking part are reduced. The students also have additional leave at the end of their course to enable them to take advantage of the UK’s post-study work offer. Monitoring of the pilot is ongoing and the results will be evaluated to inform any decision to roll out the pilot more widely. However, if it is a success—I hope that this addresses the point raised by the noble Lord, Lord McConnell—I hope that other high-quality institutions in the UK will be able to benefit. The noble Lord asked about publishing specific data on the pilot. We have not done so, as it is commercially sensitive information.
As the Home Secretary recently announced, we will be seeking views on study immigration routes. I encourage all interested parties—which will, I am sure, include many of your Lordships and the institutions with which noble Lords are associated—to participate and ensure that every point of view is heard.
I shall deal with some specific points raised during the debate, and I hope I can get through every one of them—but poor noble Lord, Lord Kennedy, is always last on the list because he winds up for the Opposition, and I may well have to write to him. However, I shall address the first answer to him, because I have just had inspiration from the Box. He asked why we cannot have two sets of immigration figures, like the USA. Another noble Lord asked the same question. Net migration statistics are not produced by the Home Office but by the ONS, the UK’s independent statistical authority. I hope that answers the question.
Several noble Lords—the noble Baronesses, Lady Smith of Newnham and Lady Royall of Blaisdon, the noble Lord, Lord Trees, my noble friends Lord Lexden and the Duke of Wellington, and others I am sure—suggested that students should be removed from the net migration statistics. I make the point that the ONS has drawn up these statistics. The Government trying to influence the production of independent statistics might be seen to help the Government achieve a manifesto target.
Like Australia, Canada and New Zealand, the Office for National Statistics includes international students in net migration calculations. International students who stay for longer than 12 months have, like other migrants, an impact on the infrastructure and services that they use and the communities in which they live. Only yesterday, the ONS released a report which stated that the net migration figures are used to calculate the size of the UK population in any given year, and that they include international students since they contribute to population growth. I make one final point on that, because I think it is important. Changing the way that we measure migration would not make a difference to our student migration policy, because there continues to be no limit on the number of genuine international students who come here to study.
Baroness Williams of Trafford
I am very reluctant to sit down because I have very little time.
Baroness Smith of Newnham
Can the noble Baroness explain how that fits with an immigration target of tens of thousands?
Baroness Williams of Trafford
I was just saying to the noble Baroness that, because we do not place a limit on the number of students, the fact that the ONS includes students in the migration statistics does not impact on students’ abilities to come here. I do not know if I have made that very clear; the noble Baroness does not look very convinced. If I could make progress and she could look at Hansard, perhaps I could make it clear in writing as well.
My noble friend Lord Lucas and the noble Lord, Lord Shipley, asked the initial question, “What is the problem?”. I do not think we are anything but in agreement that international students are absolutely vital to the UK, whether it is in medicine, engineering, or anything else. But we must remain vigilant, maintaining safeguards against the types of abuse that we saw previously. We will be inviting views on what more we can do to strengthen the system to support our excellent higher education institutions and those that stick to the rules to attract the best talent.
The noble Baroness, Lady Smith of Newnham, asked me to confirm that the Home Office will think liberally and openly about EU students. The Prime Minister has been very clear that she wants to protect the status of EU nationals already living in the UK. The only circumstances in which that would not be possible is if British citizens’ rights in other EU member states were not protected in return. There will be no immediate changes to the immigration status of EU students or the way that universities are able to recruit students.
My noble friend Lord Lexden asked about minor infractions being reported to UKVI, resulting in heavy sanctions being unfairly imposed. Sponsors benefit directly from migration and are expected to play a part in ensuring that the system is not abused. They must therefore fulfil certain duties to ensure that immigration control is maintained. We already apply discretion to sponsors who have fewer than 50 international students when they undergo their annual compliance assessment and we do not apply sanctions lightly.
The noble Baroness, Lady Royall of Blaisdon, asked whether we could introduce a post-study work route for STEM students and nurses. The post-study provisions we have in place must strike the balance between providing competitive options for the brightest graduates from around the globe and maintaining safeguards against the type of widespread abuse that was seen under former post-study work schemes. The noble Baroness also said that the Times report suggested that only 1 per cent of students overstay, and asked why we therefore needed to review the student visa system. We think that the reforms we have made in the last few years have worked and greatly improved compliance. However, that does not mean that we can be complacent. We will shortly be consulting on non-EU work and study immigration routes.
Baroness Royall of Blaisdon
All I asked for were the data. Can we see the facts with the data?
Baroness Williams of Trafford
My Lords, I can reply to the noble Baroness in writing. As the noble Lord, Lord Green, said, it is prudent to await clarification before policy decisions are made. However, I will get more detail to the noble Baroness on that if I can.
The right reverend Prelate the Bishop of Winchester and the noble Lord, Lord Bilimoria, talked about the recent visit to India, and the fact that the number of Indian students coming to the UK has dropped. We issue more tier 4 visas to students from India than any other country except China and the US, although I of course accept the point made by the noble Lord. We have seen increases in the number of student visas granted elsewhere to China and Indonesia in the year ending March of this year. The proportion of Indian students coming to study in the UK has increased from 50% in 2010 to around 90% in 2015, so the trend of smaller volumes of students with greater concentration in higher education is likely to reflect the recent policy changes to clamp down on immigration abuse by non-genuine students and bogus colleges.
The noble Lord, Lord Lipsey, talked about tier 2 salary thresholds being too high. For the most part they are based on the annual survey of hours and earnings—ASHE—published by the independent ONS. The salary requirements were based on advice from the Migration Advisory Committee, which is an independent body made up of labour market economists.
The noble Lord, Lord McConnell, said that the Fresh Talent Scheme worked, and that therefore Scotland needs a post-study work visa. The Fresh Talent Scheme operated in Scotland between 2004 and 2008. That scheme placed few restrictions on those who wanted to stay in the UK to work post-study and granted free access to the whole of the UK labour market. Evidence published by Scottish Government Social Research in 2008 found that only 44% of applicants had remained in Scotland at the end of their two years’ leave and a significant proportion were not in skilled work. We do not intend to return to the post-study work visa. That does not necessarily lead to skilled work.
I keep getting notes saying that I have two minutes left, then notes saying that I have no minutes. However, I think that I have probably outstayed my welcome at the Dispatch Box. I thank all noble Lords who have participated in the debate. I thank the noble Baroness, Lady Chakrabarti, once again.
Baroness Warwick of Undercliffe
As the noble Baroness sits down, I simply ask her to also address in the written notes that she sends us the issues about differentiation of quality that I raised in my presentation.
Baroness Williams of Trafford
The noble Baroness absolutely did and I will respond to that. In fact, she made another point about the TEF, which I will address as well.
Lord Lucas
My Lords, I am very grateful to all noble Lords who have spoken. I think that we have made a very good job of celebrating the excellence of our universities and the importance to us of international students. I even found that I agreed with much that the noble Lord, Lord Green, said. It was a pleasant debate all round.
I have listened to the noble Baroness, Lady Chakrabarti, over many years, so I had high expectations of her maiden speech and was in no way disappointed. I look forward to listening to her many times again.
I have also listened to Home Office Ministers’ speeches on many occasions, so I had low expectations. I was pretty certain that the Minister would be issued with a stick of candy-floss—sweet but very little substance—and so it turned out. It was comforting that she said such nice things about welcoming international students, but she absolutely did not say, “We, the Home Office, will be putting our backs into making sure we get lots more of them”. I am sad that she did not.
Africa: European Union Economic Partnership Agreements
(7 years, 5 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Chidgey
To ask Her Majesty’s Government what is their assessment of the impact of Economic Partnership Agreements negotiated between the European Commission and economic regions of Africa on the agricultural economies of the African countries concerned.
Lord Chidgey (LD)
My Lords, the events leading to the development of the economic partnership agreements—the EPAs—go back to the 1960s, with the signing of a series of co-operation agreements to give ACP exports preferential access to European markets as part of a broader development strategy. These had to be replaced by a GATT-compatible trading system by the end of 2007, and the Cotonou agreement provided for the EU to open negotiations with six regional groups, four being in Africa, with the objective of agreeing a series of economic partnership agreements before the end of 2007. That may have been the grand plan but, while all the African regional agreements have been made and provisionally applied, as of October 2016 the ratification process for individual countries was still ongoing.
In 2014, the EU Directorate-General for External Policies reported that the EPAs, while supposedly intended to promote trade and development, regional integration, sustainable growth and poverty reduction, remained deeply controversial. He said:
“There are fears they may be actually undermining the sustainable and long-term development of ACP countries and their regional integration processes”.
This was underlined by Dr Carlos Lopes, UN Under-Secretary-General and executive secretary of the Economic Commission for Africa, at meetings in Addis Ababa and London, and by a recent fact-finding delegation to South Africa and Namibia by the Africa APPG, of which I am a co-chair.
The EPA negotiations continued to drag on and the EU allegedly began to bully African countries by deciding to remove unilateral trade preferences by 1 October 2014 for countries that had not signed or ratified the EPAs. This created tremendous pressure and tension in various countries and regions. Meetings at a Finance Ministers’ conference in Addis Ababa, with Ministers from Namibia, Tanzania and Uganda, confirmed that African countries were—and some still are—caught in a dilemma of losing preferential market access for the few products they export to the EU if they did not sign the EPAs versus losing long-term development prospects. Many countries were threatened with significant tariff revenue losses, serious disruption of existing or planned customs unions, disruption of regional trade and regional production capacities, and unemployment.
The directorate-general’s study concluded that major changes would be needed before the EPAs could be a development model suitable for Africa. The EPAs called for sweeping liberation of African markets, and that was seen as reminiscent of the discredited World Bank and IMF neoliberal structural adjustment programmes that were so destructive in the 1980s.
Under the EPAs, to maintain duty-free access to Europe, African countries had to remove tariffs from at least 80% of imports from the EU—in some cases removing trade barriers from as much as 96% of imports. This left local producers and manufacturers with no buffer against cheaper and often subsidised European economies during their industrialisation process.
Despite misgivings from African policymakers, the EU Trade Commissioner resolved to force through as many EPAs as possible before the Africa-EU summit in April 2014. A sustainability impact assessment, however, begun in late 2002 by PricewaterhouseCoopers and completed in 2006, produced a series of conclusions and recommendations to help ensure that EPAs promoted development and supported economic, social and environmental sustainability. In particular, it was recommended that all ACP countries should retain duty-free and quota-free access to the EU market and that access to the EU should be improved for the few products not yet fully liberalised.
In 2015, Sir Ronald Sanders, the ambassador of Antigua and Barbuda to the USA, and formerly to the EU, presented a paper to an EU ECOWAS conference in Abuja assessing EPAs in the context of the African Union. He emphasised that an EPA is not an agreement between the 28 nations of the EU collectively and Africa as a whole but a legally binding bilateral contract between the 28 nations of the EU collective1y and each country in Africa individually. In the event of a dispute arising from the terms of the EPA, individual African countries, most with very scarce resources, would have to contest against the combined capability of the 28 nation states of the EU collectively. The inequality that arises in any dispute is stark, and any mechanism for dispute resolution would have little value.
That brings me to the key question: do EPAs allow Africa to conduct policies for its own development or for the development of Europe? African countries should be able to ensure that the EU provides sufficient aid and trade development assistance to implement these agreements with robust monitoring procedures for their delivery and effectiveness.
It is not surprising that the European Commission has recognised that the moves to set up the series of regional EPAs have faltered. A senior European ambassador to the EU reported as recently as last month that the EPA negotiations started late and were prolonged, controversial and marked by ill feeling. Bitter accusations were made by some ACP negotiators and European development organisations about the objectives and negotiating style of the EU.
They alleged that the EU used the negotiations to pursue its commercial advantages, which in some cases conflicted with the development strategies of the ACP countries. They alleged that the EU put ACP countries under heavy pressure to accept negotiations on a much wider agenda, such as trade in services, public procurement and competition policy—the so-called Singapore issues. They alleged that the EU’s approach did not take sufficiently into consideration the regional integration objective, and in some cases even threatened it. EU negotiators were accused of using divide-and-rule tactics and being more concerned with big company interests than with the needs of their EPA partners. Their style was overaggressive, putting ACP countries under heavy pressure to sign up to EPAs before the 2007 deadline, preventing consultation with their parliaments and stakeholders because of the time constraints.
At present, there is little, if any, consideration of civil society and the role of parliaments in the EU-SADC EPA. That is incomprehensible given the increased political importance of the trade agreements in Europe. That brings me to my final point: Brexit and its implications for the ACP EPAs. The UK is currently a major contributor to the EC trade and development fund. If the UK leaves the EU, the market access provision will no longer apply to the UK. In the absence of any specific action to establish alternative trade regimes, the UK could have no alternative but to impose the most favoured nation—or MFN—duties on imports from ACP countries. This will have the greatest impact on agro-food products, since this is the sphere in which the UK’s inherited EU MFN duties are likely to be highest.
The prospect of establishing new trade agreements with the UK is, of course, hampered by the fact that the UK cannot enter into any new trade deal agreements until it leaves the EU. The ACP countries therefore face the prospect of being at the back of a long queue of countries trying to conclude alternative trade agreements with the UK, while facing crippling most favoured nation duties on exports to the UK, on a daily basis.
Perhaps the challenge is for the UK initially to prioritise its future conduct of bilateral negotiations. Will the Minister agree that that could allow the internalisation of ACP concerns within these policy discussions? Will the Minister also agree that every opportunity must be taken to allow current market access arrangements to continue from day one of the UK’s departure from the EU? Does the Minister accept that part of the plan should be to engage through an alliance of the Commonwealth ACP countries, since within the UK body politic, the ACP as a group tends to be seen as an EU construct? This would suggest that there will be a crucial role for Commonwealth ACP high commissioners to the Court of St James. For example, exploiting opportunities presented in a range of UK parliamentary hearings and inquiries in hand into the impact of Brexit on the UK’s external relations could prove highly effective.
Lord Boateng (Lab)
My Lords, I begin by thanking the noble Lord, Lord Chidgey, for his continued championing of the cause of Africa in this House. I declare my interest as chairman of the African Enterprise Challenge Fund. I have an immediate and continuing interest because in many ways I owe my education to African agriculture. As a boy in the Gold Coast and then in Ghana I was the recipient of a cocoa marketing board scholarship. I was christened in a rural village in eastern Ghana. My paternal grandparents were farmers of cassava and cocoa. I saw at first hand the significance and the importance of agriculture in Africa. It accounts for 32% of Africa’s GDP. It is Africa’s most inclusive employment sector, employing some 65% of its labour force, 60% of whom are women. My grandmother was a cassava farmer and they are to be found all over Africa—women toiling in the fields but not always the beneficiaries of the product they produce. But that is a familiar story the world over.
Despite the fact that Africa has agriculture so very much at the heart of its economic, social and cultural life, the reality is, I fear, that farmers’ yields are among the lowest in the world. Per capita, Africa’s agricultural output is only 56% of the world average. When we look at the continuing reliance of Africa on imported food, the story is even worse—1.7 times the value of exports and rising, to feed the appetite now of a growing middle class. Africa is now importing so much more than it exports and paying so much more for that—upwards of $40 billion every year. That is the cost of failing agriculture in Africa.
The issue raised by the noble Lord, Lord Chidgey, about the impact of the EPAs is essential, because they provide the policy context within which African Governments relate to the agricultural community. Smallholder farmers in particular need a policy environment that encourages them to modernise and scale up production, encourages improvements in access to higher-yield seeds and quality fertilisers, thus enabling agribusiness to thrive. It needs to address issues around research and development, infrastructure and transport logistics. All these things are necessary if African agriculture is to be a driver of development on the continent.
EPAs therefore have to be judged, I would submit, in the context of the extent to which they help or hinder this process—and I fear that the jury is out on that point. There is little evidence to suggest that the forced liberalisation of markets in Africa actually works or that it enables support to be provided for indigenous African agribusiness, processing and manufacture. On the contrary, EPAs could well hinder them, and there are many examples where they have. So countries in Africa have understandably been cautious in their approach to EPAs. Some, like Tanzania and Uganda, have used Brexit as an opportunity to stall the process altogether, for they see little that benefits them and much that may well do harm. In west Africa, Nigeria has stood out specifically against EPAs because it fears the impact on its nascent manufacturing industry. Again, Nigeria has good cause to do so because when we look at the progress of the tiger economies of south-east Asia, we see that they have benefited from a process that would actually have been hindered by EPAs.
I would argue that Brexit provides an opportunity for us to take stock and to build a trading relationship with Africa that puts development at the heart of that relationship. It should draw on the best of existing and global practice and build into our new trading agreements the sort of arrangements that will enable Africa to develop its own processing sector, that will enable links to be developed between smallholder farmers and both regional and global value chains, and that will recognise that a degree of protectionism for local industry is probably necessary in order to promote the development of agribusiness on the continent. That in turn will provide opportunities for British companies. They will have an opportunity to assist in the development of capacity in Africa, to improve R&D and yield, and to provide the machinery and know-how that will enable Africa to grow its agribusiness and enhance its own value chains.
Ethiopia provides a classic example of how that can work in practice. The Ethiopians have resisted the imposition of external agendas and external solutions to their challenges. They have targeted science and innovation alongside support for rural farmers through nurseries, as well as the development of co-operatives. They have supported agri-industrial parks for the production of leather goods and other products related to agriculture and they have brought enhanced and added value to their own specialist coffee brands. All of this has been done in a way that has assisted smallholder farmers.
It has also been done in a way that has provided real opportunities for British business. Diageo is a classic example of that. It has developed its processes in both Ethiopia and in South Africa in a way that links smallholder producers of sorghum and other contributors to beverages directly to its factories. That has enhanced and added value and has enabled smallholder farmers to become stakeholders, and it has added shareholder value to those who invest in Diageo by increasing foreign direct investment in Africa. That is the way forward for Africa and for the UK.
In conclusion, I make a simple request—well, it is not simple, because it is quite a complicated process. I hope that the Minister will respond in a way that gives us heart, as I am sure he will, because DfID and the Secretary of State, to their credit, have been in the forefront of bringing some reassurance to Africa in this area. I ask that Britain continues to provide EBA—everything but arms—and GSP trade benefits for Africa; that we seek to conclude duty-free and quota-free market access arrangements at least with non-LDCs and in particular those that have long-standing trading links with our country; and, most importantly, that we maintain MFN WTO tariffs on sensitive products of particular importance to African countries and exclude such products from preferential trading arrangements with other regions that are low-cost competitors—for instance, in South and central America. The classic example here is Brazil and sugar. It is likely that the Brazilians will be up there on the list for early trade negotiations. If they are given preference at the cost of sugar producers in Malawi and in Swaziland, the consequences for smallholder farmers will be disastrous.
So there are challenges ahead, but there are opportunities. One should have no doubt about that when one looks at DfID’s increasingly high-profile investment in agriculture, when one looks at the interests of the Secretary of State in promoting a private sector role in development, and when one looks also at this House, where friends of the African smallholder farmer are to be found on all Benches—I do not think that there is a legislative body in the world that contains more friends of the small African farmer than this one. I hope that the small African farmer, who is at the heart of development and of Africa’s search for dignity and success, will continue to find friends and solace in this place.
The Lord Bishop of Winchester
My Lords, I too thank the noble Lord, Lord Chidgey, for securing this debate. With Malawi on the brink of a major humanitarian crisis, there is no better time to highlight the challenges facing Africa today. I declare an interest as the chair of a small charity supporting education and development in Africa.
The welfare of the east African nations is of particular importance to me. I was born in Tanzania and spent some of my teenage years in Kenya. In the 1990s, I was the principal of a small college in Nairobi—indeed, we still keep a home situated on an old coffee farm near Thika. Through this previous experience and from regular visits, I have observed the finely balanced life which Kenyan agricultural workers live. Smallholdings are a significant element in the agricultural sector of Kenya. Many city dwellers also have a smallholding upcountry. A severe drought might mean the end of their children’s education. It may also result in families being unable to afford even the most basic medicines or in workers having to resort to desperate means of generating income to support their families.
The economic partnership agreements that we discuss today may have as much of an impact on the livelihoods of east African smallholders as a bumper harvest or a deadly drought. We have heard from the noble Lord, Lord Chidgey, a sample of the difficulties caused by EPAs. I want to highlight two issues which could specifically affect the smallholder in Africa.
First, while the tailor-made free trade agreements between the EU and African countries seem on paper to indicate a real determination to encourage development in Africa, they could actually manifest in a very different way when countries such as France, with a vast agricultural surplus, are able to export enormous amounts of produce into African economies. This could be an effective death sentence for African smallholder co-operatives: local farmers’ markets supplied by smallholders cannot respond to bulk imports. How could a farmer, even one in a co-operative with a combined holding of some hundreds or thousands of acres, compete with shipping container after shipping container full of mass-produced, genetically-modified produce arriving from Europe? We have all enjoyed Kenyan beans and flowers, but these are the products of large-scale farming enterprises; reversing the process will hit the smallholder and further weaken existing co-operative farming arrangements.
The second problem I wish to highlight is one of government spending. Due to the difficulties of income taxation in several African countries where a large proportion of the population does not pay tax, one of the main ways that a Government fund public services, infrastructure and defence is through tariff revenues. The problem becomes all too obvious. To abolish tariffs in a country such as Kenya, with all its well-developed horticultural trade, through revised arrangements under the economic partnership agreements, would effectively slash substantial amounts of potential government revenue, meaning less money for hospitals, schools and roads. These are the very services smallholders require in order to make a contribution to the development of African countries.
Imagine these two effects combined; the result could be devastating to developing economies. Large numbers of smallholders would come under new pressures as they fail to compete with European markets; meanwhile the Government begin austerity measures in response to a fall-off in revenue. This is different from a trade dispute between two highly developed economic trading blocs. It is not TTIP, or Schengen arrangements within the well-developed EU market. Large multinationals will not suffer the consequences of a poorly negotiated trade deal. Neither will European citizens. It will be poor African farmers who will bear the brunt of the EPAs if the right course of action is not taken.
Much of what Paul Collier spoke of in his book The Bottom Billion has been acknowledged. New international trade arrangements are needed, accompanied by good governance and international law. Yet 5 billion or even 6 billion of us are still on track to improve our prosperity while the final billion have been left behind. There are many things which need improving if trade, rather than aid, is to be the basis for the relationships between developed and developing countries, but the last thing we want is to encourage instability and insecurity in economies where good governance is truly needed.
In the Church, partnership means working together as one towards the common good. From what I understand of EPAs, they are not quite the kind of partnerships that are envisaged. I will be reassured if we keep in mind the reality of life for the bottom billion and seek to establish partnerships that will lift people out of poverty on the basis of fairer trade agreements.
Baroness Sheehan (LD)
My Lords, I thank my noble friend Lord Chidgey for securing this important debate. On the face of it, economic partnership agreements between the EU and economic regions of Africa should be a welcome development for Africa, purporting, as they do, to promote trade and investment between African, Caribbean and Pacific partners and the EU, with the laudable aim of contributing to sustainable development and poverty reduction. Furthermore, we are told that EPAs are tailor-made to suit specific regional circumstances; that they will open up EU markets fully and immediately, but allow African, Caribbean and Pacific countries long transition periods of up to 25 years to liberalise up to 80% of their markets to EU imports, while still providing protection for sensitive sectors.
EPAs are also touted as drivers of change that will help kick-start reform and contribute to good economic governance, helping ACP partners attract investment and boost their economic growth. One would think that, with such benefits, ACP countries would be champing at the bit to sign on the dotted line. However, the October 2014 deadline left many countries in a dilemma, causing tensions in various states. Some of their concerns have already been addressed very ably by my noble friend Lord Chidgey. Some felt that if they did not sign, they would lose their preferential market access for the few products that they did export to the EU. However, others felt that their longer-term prospects would be jeopardised if they signed the EPA. For them, the threats included significant tariff revenue losses, loss of policy space, threats to local industries, increased unemployment, serious disruption of existing or planned customs unions, and the displacement of existing regional trade and production capacities.
I thank the House of Lords Library staff for producing an excellent briefing for this debate. I found their inclusion of the Round Table article by Sir Ronald Sanders, The EU, Economic Partnership Agreements and Africa, very useful in giving me a perspective of EPAs from a recipient’s viewpoint. I will read part of the abstract because it is succinct and to the point. It says:
“Africa has been divided into four groups of states by the European Union in the negotiation of Economic Partnership Agreements (EPAs) that will define the relationship between Africa and Europe in the future. The EPAs are unfair. They demand reciprocity between the EU countries collectively and each African country individually”.
That last sentence makes a nonsense of the concept of reciprocity. Reciprocity can exist fairly only when practised between partners of equal stature. I borrow again from Sir Ronald’s article when he tells us that Aristotle, in his monumental work Nicomachean Ethics,
“propounded the doctrine that: as between unequals, equity requires not reciprocity but proportionality”.
It is patently clear that unless trade agreements between rich and poor countries recognise the fundamental principle of proportionality, they can never be deemed fair. The right reverend Prelate also made this point.
I returned from a visit to Sierra Leone this Monday, so naturally I was interested in the trade figures between the EU and the Economic Community of West African States. I was rather surprised at what I found, given that the EPA was signed in 2014. It showed a drop in EU imports from the west African states of 28% from €38.3 billion in 2013 to €27.4 billion in 2015. Over the same period, exports from the EU to the west African states dropped by just 4%. This represents a trade balance in favour of the west African states of €8 billion in 2013 being transformed to €1.6 billion in favour of the EU in 2015. Some of the reasons behind this trend may well have been touched on by the noble Lord, Lord Boateng. In my view, the EPAs are a cause for deep concern. Perhaps the Minister will take up my concerns with the Directorate-General for Trade.
In concluding, I will move away from EPAs and focus for a moment on the implications of Brexit for trade relations between Europe and Africa. Of course, we do not yet know what Brexit will mean in detail but it is important that the UK should prepare for the potential disruption of trade between the UK and Africa and at the same time actively seek to ensure that our trade policy towards Africa also promotes Africa’s development. This will be in our national interest but also in Africa’s interest. I note the challenges that the Brexit timetable is going to pose in reaching those trade agreements.
I commend the recent report of the expert panel, which included two members of this House, under the umbrella of the APPG on Trade Out of Poverty. The report looked at potential future UK support for the Africa Free Trade initiative and its recommendations will, I believe, not only promote economic growth in Africa but help to pull significant numbers of poor people, women in particular, out of poverty as they are able to trade and move freely across borders. This will make a real contribution to progress towards the sustainable development goals and the aspiration to leave no one behind. At the same time, of course, we will be helping to create a larger and more open market from which British companies can benefit.
We have traditionally played an important role within Europe in arguing for open and fair trading relationships with developing country partners. The implications of Brexit for trade relations between Europe and Africa are potentially serious. I hope that it is part of the Government’s plan for Brexit to actively seek opportunities to be even more open and support Africa’s own efforts to move towards a more sustainable future.
Lord Collins of Highbury (Lab)
My Lords, I too thank the noble Lord, Lord Chidgey, for initiating this debate. Free trade has been a very useful tool against poverty globally. It has helped to pull millions of people out of poverty. However, as we have heard in this debate, it is not a panacea and some sectors of society lose out.
When the UK joined the European Economic Community 43 years ago, it transferred all authority for its trading arrangements to the EEC. In 2014, the UK’s $1.1 trillion in trade was channelled through these clear and predictable legal and institutional frameworks. For Africa this included the Cotonou agreement, as the noble Lord, Lord Chidgey, said, which expanded preferential access to EU markets while setting up the economic partnership agreements through which Africa was to gradually open up 75% to 80% of its own market to the EU.
The aspiration of the EU for EPAs between it and African, Caribbean and Pacific countries has been, as we have heard, to contribute through trade and investment to sustainable development and poverty reduction. But as my noble friend Lord Boateng said, African countries are caught in the dilemma of losing their preferential market access for the few products they export to the EU if they do not sign the EPAs, versus their longer-term development prospects if they sign them. The threats of the EPA, as the right reverend Prelate said, include significant tariff revenue losses; loss in policy space and threats to local industries; unemployment; serious disruption of existing or planned customs unions; and, as we have heard from all noble Lords in the debate, the displacement of existing regional trade and regional production capacities.
Over recent years many of the African economies have also seen an economic boom. However, at the same time inequality is extreme and increasing. Africa faces the additional costs of mitigating and adapting to climate change, despite being among the least responsible for causing the crisis. African Governments are in desperate need of new and additional public finance not only to fill financing gaps in their budgets but to invest in the future SDGs. International finance policies have resulted in African countries haemorrhaging billions of dollars in taxable financial resources. These potential tax losses could have been invested in reducing inequality and poverty and developing jobs and prosperity. Surely global agreement on tax must be the top priority for all countries.
European Commission officials highlighted some of the achievements of the EPAs, including 80 grants made to infrastructure projects across Africa under the EU-Africa infrastructure trust totalling some €6.5 billion and €55 million set aside under the African Union support programme to develop AU institutions. Despite misgivings from African policymakers, the EU remains determined and positive about the EPAs and is keen to deliver as many as possible. The SADC of Botswana, Lesotho, Namibia, South Africa and Swaziland signed the EPA in June of this year. The southern African markets will open only partially to EU exports, gradually over time, providing their industries with the intermediary goods they need to support growth.
As we have heard, in east Africa the tensions are more obvious. Members of the East African Community—Kenya, Uganda, Tanzania, Burundi and Rwanda—were due to sign an economic partnership agreement to ensure that the five nations continued to export goods to the EU without incurring quotas or tariffs. But Tanzania withdrew because of,
“the uncertainty in EU after the exit of UK”,
according to a government statement, which also said:
“But more important is to protect the economic interests of our countries by empowering the manufacturing industries”.
We have also heard recently that Uganda’s President Museveni then pulled out, saying that the deal needed further discussions, even though his Government had already agreed it. The trade deal has been under negotiation for nine years and was initialled by all parties in October 2014. All the countries apart from Kenya—as we have heard, the region’s largest economy—will be largely unaffected if the deal lapses because they are classified as least developed countries by the EU. But Kenya, as a wealthier developing country, will face tariffs of 4.5% to 19.5%, according to the chief executive of the Kenya Flower Council; flowers are an incredibly important part of Kenya’s economy.
The announcement by Tanzania is merely the most recent example of delay and backtracking on implementation. Could Brexit herald the unravelling of EPAs? Following the vote to leave the EU on 23 June 2016, a new trade policy will have to be designed. In doing so, attention needs to focus on how this can contribute to development. It will need to recognise the differences that exist among developing countries. Many of the least developed countries depend on preferences in the UK market. They need certainty in the same way that UK manufacturers need certainty. Will the Minister confirm that his department is fully engaged with the Department for International Trade in the design of new trade policies? Will he reassure the House that the UK Government will move quickly to confirm that existing arrangements will remain in place for a certain period of time following the UK’s departure from the EU?
Linked to this, the UK needs to put transitional arrangements in place to minimise disruption. As we have heard, the value of the preferential access that developing countries receive to the UK market through the EU’s GSP, and particularly its EBA element, is considerable. They save least developed countries exporters €385 million per year, non-LDC ACP exporters €205 million and Commonwealth exporters €715 million. As the noble Lord, Lord Chidgey, asked, what discussions are the Government having with the Commonwealth to establish a dialogue on trade and new trade arrangements?
As my noble friend said, there are opportunities in these risks, and a new UK trade policy can be made more development-friendly by going beyond tariffs to include new provisions on services, investment, rules of origin and standards. In crafting its trade policy approach to Africa, three principles should underlie the UK’s trading engagements with the whole of Africa: support for Africa’s regional integration priorities; pro-poor and pro-development trade arrangements; and market-access continuity.
The United Kingdom Government face a considerable range of negotiating priorities. I hope tonight that the Minister will be able to reassure the House that Africa, as a rapidly developing and historically linked trading partner, will not be overlooked in these discussions.
The Minister of State, Department for International Development (Lord Bates) (Con)
My Lords, I thank all who have contributed to this excellent debate, particularly the noble Lord, Lord Chidgey, for leading it off. I also pay tribute to his work as the co-chair of the all-party parliamentary group. He has done a lot of work in this area, including his undertakings and research into the overall effectiveness of EPAs. We will certainly be following that very closely and welcome the opportunity to have dialogue with the noble Lord. I will begin by making some general remarks and then, in five minutes or so, deal with some of the key points that were raised during the debate.
Free, fair and open trade is fundamental to the prosperity of the United Kingdom and the world economy. Trade is a driver of growth and development, and growth is one of the most effective means of raising incomes, creating jobs and reducing poverty. More than a decade of fast economic growth has helped cut poverty rates in sub-Saharan Africa from 56% in 1990 to 43% in 2012. This growth benefits sub-Saharan Africa, but also British business, as it gives opportunities for investment. It is for these reasons that the UK is committed to ensuring developing countries can reduce poverty through trading opportunities. The right reverend Prelate the Bishop of Winchester spoke about the importance of education and economic development. We would say the combination of those two elements is the surest possible route out of poverty.
Agriculture, which several noble Lords referred to—particularly the noble Lord, Lord Boateng, based on his personal experience—will be a major source of growth in many countries, accounting for an average 15% of GDP and 30% of employment, 60% of which is women’s. We are taking an increasingly commercial approach to the development of agriculture in Africa by strengthening the commercial viability of smallholders and accelerating investment in agribusiness. We are working to ensure that women—a particular concern raised by the noble Lord, Lord Boateng—are economically empowered across the sector, that land tenure and other property rights are secured, that investments are responsible and resilient to climate change, and that our support across the food system is helping to deliver our nutrition goals. Domestic and foreign investment in agriculture is growing, but more is needed for sub-Saharan Africa to realise its potential. Trade can help unlock that potential.
The noble Lord, Lord Boateng, also talked about the historic poor yields in African agriculture. African countries rightly aspire to add more value and to raise those yields by investing in the latest technology. This will require greater integration into global trading systems. Regional and global value chains, especially for horticulture, which the noble Lord, Lord Collins, mentioned, function on the basis of quick and efficient trade logistics, and for most of Africa this will require substantial improvement. By providing additional access to the markets of developed countries to sell their produce to, and access to global and regional supply chains, we can create vital opportunities for the world’s poorest people to work their way out of poverty.
UK leadership has ensured that the EU offers the world’s most generous package of market opening for developing countries. Some 75 countries, 44 in Africa, currently enjoy duty-free access to the EU market of half a billion people through the EU’s Everything But Arms trade preference scheme provided for the least developed countries, as mentioned by the noble Lord, Lord Collins, or the negotiated economic partnership agreements. The UK is a long-standing supporter of the EU’s EPAs as development-focused trade deals. They can put our trading relationship with African partners on a more equitable, mature and business-like footing, immediately opening up EU markets on a permanent basis, providing support to help countries use the advantages and, over time, opening up access to quality products and technology from European firms.
However, as the noble Lord, Lord Chidgey, rightly pointed out, these negotiations have taken too long. For now, EPAs are applicable to only 13 of the 48 candidate countries, with eight having been finalised only in the last couple of months. The noble Lord, Lord Boateng, said that the jury was still out. One of the reasons why the jury is still out is that it has just gone out. A lot of these deals have only just come into effect in the past couple of months. We need to keep their benefits under review but the length of time is clearly a concern. Concerns have also been expressed, as the noble Lord, Lord Chidgey, mentioned, about the fear of negative impacts of EPAs in Africa, but the UK Government believe that where these agreements are correctly implemented and supported they can provide a lasting framework in support of sustainable growth and poverty reduction.
The World Bank estimates that over recent decades, income grew three times faster in developing countries that opened up their markets than in those that maintained barriers to trade. I welcome the noble Baroness, Lady Sheehan, to her new role; we are both new to the issue, but we both care passionately about it. She talked about the importance of evidence, and asked where the evidence was that the increase in living standards that we want is actually being delivered. We believe it exists in the fact that the economies that opened up grew faster. Greater access to EU intermediary goods, equipment and machinery will help African firms’ competitiveness. A reduction in fertiliser tariffs, for instance, should help to support agriculture efficiency. African businesses can benefit from lower input prices to help to realise a net increase in profits.
At the same time, we must of course be mindful of the different stages of development that our partners face, a point made by the noble Lord, Lord Collins. That is why the EPAs allow 12 to 20 years for the gradual and controlled removal of our African partners’ tariffs, a point that the right reverend Prelate the Bishop of Winchester was particularly concerned about, and rightly so. These are not directly comparable; they are asymmetric, with a bias to development from the poorest countries. It is right and proper that that should be so. Even more, the EPAs exclude agricultural products and other strategically important sectors, as chosen by our partners, from any requirements to lower tariffs at all. For example, west African negotiators chose not to lower tariffs to EU products such as meat, poultry, fish, dairy, vegetables, cocoa, apparel, pharmaceutical products, cars and many more. The noble Baroness, Lady Sheehan, referred to the trade imbalance between west Africa and the EU, but within the EPAs there are certain guarantees that in our opinion will help.
EPAs also contain safeguards against possible excessive EU competition; the noble Lord, Lord Chidgey, went somewhat further and talked about the strong, almost threatening approach that was taken. African Governments can take actions such as temporarily raising tariffs or applying quotas to protect domestic businesses, producers and food security. In addition, the EU has agreed not to subsidise any of its agricultural exports under an EPA. African states have agreed to extend to each other the same levels of liberalisation as the EU and EPA, aiming to encourage regional integration and prevent increased imports from the EU displacing imports from neighbouring economies.
In addition, EPAs provide for further co-operation on issues such as customs, standards, trade and services, agriculture, fisheries, investment and business environment. Opening dialogue in these areas allows EPAs to provide greater depth and scope for wider benefits than one-way trade preference schemes.
I turn to the EU referendum, which was rightly raised by many noble Lords. Leaving the EU offers a major opportunity—in fact, I think that term was used by the noble Lord, Lord Boateng—for the UK to send a positive signal that our markets are open and that we are determined to promote business with the developing world. The noble Baroness, Lady Sheehan, asked me to reference this, but we now have a Department for International Trade, which is charged with promoting UK exports in goods and services to support a growing economy that creates wealth for all. That is its job remit; we have a department for that. It will obviously be taking the lead in ensuring that these types of trade arrangement happen.
In similar vein, several noble Lords, including the noble Lord, Lord Collins, referenced the importance of the Commonwealth. We recognise that many Commonwealth countries are current or potential members of EPAs, with nine currently in Africa, such as South Africa, Botswana, Ghana, Cameroon and Mauritius. If the EPAs in east and west Africa are implemented, that number will rise to 15. We have set as a priority to increase Commonwealth trade and investment. Commonwealth trade is estimated to surpass $1 trillion by 2020, but it could be more, and we believe that EPAs could be part of that.
On the specific point about the process, of course, at the moment the UK remains part of the EU and we therefore remain governed by the EPA arrangements that are in place. The EU still supports the EPAs, and while the UK is still a member of the EU, all rights and obligations will apply, including our commitments to developing countries through the EPAs. The UK enjoys strong trading relationships with many developing countries, and we will look to strengthen those ties in future. That will be part of the negotiation package as we move forward.
Time is moving quickly, but let me deal with a couple of issues which I have not yet touched on. We accept absolutely that partnerships have been literally at the heart of EPAs. They must be partnerships: the right reverend Prelate was right to mention that. The Cotonou partnership agreement in 2000 was the start of this, and it is essential that the spirit of partnership continues. We believe that tax revenues lost can be raised through increased exports to the EU, which will increase the revenue into the area. In relation to the Africa Free Trade initiative raised by the noble Baroness, Lady Sheehan, the All-Party Parliamentary Group on Trade Out of Poverty launched its inquiry in March 2016, and Ministers have been asked to participate. The final report was issued in October, we support it and DfID intends to keep working in each of the main thematic areas—primarily cutting trade costs, connecting markets, enhancing productive capacity and using trade to drive inclusive economic growth.
Time has gone. I undertake to read the debate very carefully with officials to ensure that we have adequately addressed the points raised. I again thank the noble Lord, Lord Chidgey, for giving us the opportunity for this timely explanation of this very important economic and development relationship with Africa.