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Craig Tracey (North Warwickshire) (Con)
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
The Secretary of State for Foreign and Commonwealth Affairs (Boris Johnson)
Britain and America have an enduring and strong special relationship, and as the Prime Minister said during her call with President-elect Trump on 10 November, we look forward to working with his Administration to ensure the security and the prosperity of both our countries and the world in the years ahead.
Craig Tracey
Does my right hon. Friend agree that, now that a democratic process has taken place, the UK and the US need to focus on working ever more closely together on shared priorities?
Boris Johnson
I congratulate my hon. Friend on the wisdom of his approach to this matter. The relationship between the United Kingdom and the United States was perhaps the single most important geopolitical fact of the last century, and I have no doubt that it will continue to prosper and thrive in the relationship we are building.
Gavin Newlands
Just as he has on Turkey, the Foreign Secretary has U-turned in his opinion of President-elect Trump. Given the openly racist and Islamophobic opinions expressed by some of Trump’s Cabinet nominees, does the Foreign Secretary maintain his belief that there is a lot to be positive about in the new Administration, and how does he intend to work with his new counterpart to uphold universal human rights such as racial and gender equality?
Boris Johnson
I think that Members on both sides of this House should be as positive as we possibly can be about working with the incoming US Administration. It is of massive importance to our country and, indeed, to the world. I suggest to the hon. Gentleman that he should judge the new Administration by their actions in office, which we of course hope to shape and to influence.
James Cleverly (Braintree) (Con)
I was going to ask question 13, Mr Speaker.
Mr Speaker
It is far too early for question 13. If the hon. Gentleman wants to ask a question, it should be about the relationship between the United Kingdom and the United States, but that now requires a certain dexterity and fleetness of foot from him.
James Cleverly
Boris Johnson
I congratulate my hon. Friend on his characteristic verbal dexterity. I think he speaks for many people—many common-sensical people—in this House and in this country who want a thriving relationship between the United Kingdom and the United States of America.
Alison McGovern (Wirral South) (Lab)
What representations has the Foreign Secretary made to our American counterparts about Aleppo, where bombing this weekend has caused the last children’s hospital there to close?
Boris Johnson
As the hon. Lady knows—she has campaigned a great deal on this issue—we are working hand in glove with the United States to try to get a ceasefire in Aleppo. I last had a conversation with John Kerry on this matter very recently. Alas, it has proved impossible so far to persuade the Russians to drop their support for their Syrian client, but they have the opportunity to do just that. We need to reach out to the Russians and show that it is now up to them to demonstrate the leadership the world expects, to call for a ceasefire in Aleppo, to deliver a ceasefire in Aleppo, to let the humanitarian aid get through and to prevent a catastrophe for the people of that city over the winter months.
Sir Simon Burns (Chelmsford) (Con)
Although there is no vacancy, does not the Foreign Secretary think it is extremely generous of Donald Trump to suggest who should be our ambassador in the United States? In that spirit of fraternity, might he suggest that the best person to fill the vacancy for the ambassador to the United Kingdom next year would be Hillary Rodham Clinton, although I suspect the last thing she would want to do is to be associated with the incoming Administration?
Mr Speaker
I think the right hon. Gentleman might want to be the ambassador to the United States.
Boris Johnson
You anticipate what I was about to say, Mr Speaker. Of course, my right hon. Friend would be a very good candidate. On the other hand, as the House knows full well, we have a first-rate ambassador in Washington doing a very good job of relating with the present Administration and the Administration to be. There is no vacancy for that position.
Mr David Winnick (Walsall North) (Lab)
As regards ambassadors for either country, may I make a suggestion? An excellent choice for the unofficial ambassador from the United States to Britain—I emphasise the word unofficial—would be Brandon Victor Dixon, the actor who spoke out to the Vice-President-elect about American values and was criticised by the future President. Mr Dixon is the sort of person who is associated with all that is best about the United States.
Boris Johnson
Of course, Mr Brandon Dixon, of whom, I am afraid, I was hitherto unaware is perfectly at liberty to come to this country, assuming that all visa requirements are met, and to spread his message. We look forward to having a new American ambassador in due course to follow in the footsteps, if I may say so, of one of the most distinguished US ambassadors we have seen in this country in recent years, Matthew Barzun.
Mr Speaker
I would have called the hon. Member for Central Suffolk and North Ipswich (Dr Poulter), who has a very similar question, if he were standing, but he wasn’t, so I won’t.
Dr Poulter
Boris Johnson
I am grateful to my hon. Friend, who catches the mood of the House. We have already settled that question: we have an excellent ambassador in Washington who is doing a first-rate job and there is no vacancy.
Mr David Hanson (Delyn) (Lab)
Boris Johnson
The right hon. Gentleman will know that that is one of our top priorities. As part of our global Britain campaign, we have an enhanced forward presence in the Baltic states and a battalion is being sent there. It is vital that we get over the message that NATO and article 5 of NATO have been the guarantor of peace and stability in our continent for the last 70 years. That is a point that is well understood in Washington, but which we will repeat.
Mr Keith Simpson (Broadland) (Con)
I think we are all relieved that the Foreign Secretary has ruled out Mr Farage. In this post-truth world, we might have assumed that he would have been sympathetic, given that they campaigned together so remarkably on Brexit. Will the Foreign Secretary outline to the House his thinking on what he will say when he visits the United States of America about our future relations, given that we have always been the conduit between Europe and the United States of America?
Boris Johnson
My right hon. Friend asks a thoughtful and important question because, as I said to the right hon. Member for Delyn (Mr Hanson), it is vital that we get our message across about the vital importance of NATO, of free trade and free enterprise, and of sticking up for the values that unite our two countries. That is the message that I know the Prime Minister will put across when she goes there, and it is certainly the message that will be delivered at all levels from the UK Government.
Alex Salmond (Gordon) (SNP)
In a secret telegram, printed in The Sunday Times, our ambassador
“boasted that the UK is the best placed of any nation to steer the new president’s foreign policy and encourage his more extreme ideas to ‘evolve’.”
Is the presidential edict—or tweet—to replace Sir Kim Darroch with Lord Farage a sign of the early success of that policy?
Boris Johnson
I think the right hon. Gentleman is too early with his verdicts. We will engage with the Administration-to-be at all levels; indeed, we are already doing so, and I had a very good conversation with Vice-President-elect Mike Pence. We see eye to eye on a great many matters. As I have said, there is no ambassadorial vacancy in Washington given our excellent ambassador.
Alex Salmond
In the space of the past few weeks, the Foreign Secretary has gone from not going to New York in case he is mistaken for Mr Trump to saying that Mr Trump is the opportunity for the western world, a political pirouette of which Ed Balls would be proud. Will the Foreign Secretary realise what we are dealing with in the new President of the United States, and would this country’s policy not be helped by coherence, consistency and a bit of common sense?
Boris Johnson
I think that what the world needs now is the UK to build on its relations with the United States, which, as most people in the House accept, are of fundamental importance for our security. As I have said very candidly to hon. Members, there are three central points we will be making to our friends: the vital importance of the transatlantic alliance of NATO, the importance of free trade and free enterprise, and the importance of jointly promulgating the values that unite our two countries. That is the message.
Emily Thornberry (Islington South and Finsbury) (Lab)
As we meet today on the 53rd anniversary of John F Kennedy’s death, we have the prospect of a very different president about to enter the White House in a matter of weeks. Nevertheless, the Secretary of State said last week, and has said again today, that this new president is “a liberal guy” with whom he shares many values. He does not end there; we have, he tells us,
“every reason to be positive”
about a Trump presidency. Will he tell us what reasons there are to be positive about the attitude of the new president to climate change?
Boris Johnson
It is vital that we are as positive as we can possibly be about the new Administration-elect. As I have said to the House before, I believe that the UK-US relationship is vital, and I think that President-elect Trump is a deal maker. The UK has led on climate change globally, and we have had outstanding success. I will be open with the House that we will be taking to the Administration-to-be the message that we believe that the issue of climate change is important; it is of importance to the United States and the world.
Emily Thornberry
The reality is that we have a new president who says that climate change is a hoax invented by the Chinese, who has repeatedly promised to scrap the Paris treaty and whose top adviser on the environment calls global warming “nothing to worry about”. There is no doubt that that is a hugely dangerous development for the future of our planet, so let me ask the Secretary of State this: when the Prime Minister goes to see the new president in January, will she have the moral backbone to tell him that he is wrong on climate change and must not scrap the Paris treaty, and will she lead the world in condemning him if he does?
Boris Johnson
I really must say to the hon. Lady that she is being premature in her hostile judgments of the Administration-elect. Any such premature verdict could be damaging to the interests of this country. It is important that we in this country use our influence, which is very considerable, to help the United States to see its responsibilities, as I am sure it will.
Michael Tomlinson (Mid Dorset and North Poole) (Con)
The Minister for Europe and the Americas (Sir Alan Duncan)
Ministerial colleagues and I regularly discuss migration with our European and international partners. The UK will continue to play a leading role towards securing a co-ordinated and comprehensive approach to the migration crisis that tackles the causes as well as the consequences of unmanaged migration.
Michael Tomlinson
I am grateful to the Minister for that answer, but what reassurance can he give me and my constituents that he and the Prime Minister are working with the international community to help resolve this terrible situation?
Sir Alan Duncan
My right hon. Friend the Prime Minister gave exactly that reassurance when she set out, at the United Nations in September, three key principles to improve the international response to the mass movement of refugees and migrants: the protection in the first safe country of arrival; the right of states to maintain their borders; and a clearer distinction between refugees and economic migrants. We are pursuing this agenda vigorously with our international colleagues.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
Is the Minister aware of the rising levels of violence directed towards those in refugee camps on the island of Chios, including volunteers? Is he aware that on 16 November the camp at Souda was attacked by about 60 members of the far-right group New Dawn? Boulders were thrown into containers containing refugee women and children. Following that, three volunteers, two of whom are UK citizens, were arrested by the Greek police. Can he assure me that every support will be given to UK citizens volunteering in that area to ensure that their rights are protected?
Sir Alan Duncan
The right hon. Gentleman makes a perfectly fair point. I hope that everybody in this House fully condemns any such violence. Behind that bad news, however, there is some better news. Since the EU-Turkey agreement, the number of migrants arriving on Greek islands has reduced significantly from an average of about 1,500 in February to just over 100 a day now.
Daniel Kawczynski (Shrewsbury and Atcham) (Con)
I believe that my right hon. Friend visited Turkey recently. Does he agree that Turkey plays an important role in helping refugees and managing the whole process, and that our relations with Turkey will become increasingly important in this regard?
Sir Alan Duncan
My hon. Friend is right. I have been to Turkey twice and my right hon. Friend the Foreign Secretary has been there, too. The UK is committed to the successful implementation of the EU-Turkey agreement, which started in March this year. For that to work well, we need to retain good and constructive diplomatic engagement with countries, including Turkey.
Mark Durkan (Foyle) (SDLP)
Has the Minister had any pause for thought about the commitment of the UK Government and EU member states to engage and fund President Bashir’s regime, as partners in the management of migration?
Brendan O’Hara (Argyll and Bute) (SNP)
The Secretary of State for Foreign and Commonwealth Affairs (Boris Johnson)
We will continue to support the Government of Iraq to deliver the reforms and reconciliation needed to build public trust and unite all Iraq’s communities against extremism. In Syria, we continue to work in support of a lasting settlement based on transition away from Assad, and towards a stable and peaceful future for Syria.
Brendan O’Hara
I thank the Secretary of State for that answer, but in light of what happened in Libya, when a failure to plan for the future plunged the country and the region into absolute chaos, will he tell me what lessons the UK learned from that experience and what his Department is doing to ensure a very different outcome in Iraq and Syria?
Boris Johnson
As the hon. Gentleman can imagine, a huge amount of work is going on now, particularly with respect to Mosul as I told the House at the previous Foreign Office questions. We announced a commitment to invest £169 million in aid towards reconciliation and bringing communities together. The House must understand, however, that fundamentally it is up to the Government of Iraq to work in a way that brings communities together, and builds trust and confidence in the people of Mosul and other parts of the country.
Crispin Blunt (Reigate) (Con)
What knowledge does the Foreign Secretary have of any plan for the political administration of Mosul after it is recaptured from Daesh, and what confidence does he have in any plan?
Boris Johnson
A huge body of work is being carried out at the moment, with the UN and the 68-nation coalition, to ensure that we have in place an administration that commands the confidence of all the people of Mosul. It will not be easy. The House understands perfectly well the problem—the forces set on liberating Mosul do not necessarily reflect the communities of that city. It will be a huge, huge challenge, but, as I said just now, that challenge must be met by the Government of Prime Minister Abadi and the Iraqis.
Steven Paterson (Stirling) (SNP)
Boris Johnson
As the liberating forces progress through the suburbs, we are ensuring that there are avenues out of the city and camps available for those who need to take refuge, but clearly this is a very delicate matter, and we are investing considerable sums in ensuring adequate protection.
Nadhim Zahawi (Stratford-on-Avon) (Con)
The Foreign Secretary rightly talks about the challenges of post-Daesh Mosul. I would like to mention on the record the excellent work that our ambassador, Frank Baker, is doing on politics beyond Daesh. Will my right hon. Friend make available to Frank and his team all the resources necessary to ensure we get the peace beyond Daesh right in Mosul?
Boris Johnson
My hon. Friend and I of course travelled to see Frank Baker a while ago, so we know what excellent work he does, and he has a very large team in Baghdad. It is a superb team and a real tribute to the work of the Foreign Office. As I say, they are working very hard to minimise the fallout from the liberation of Mosul and to ensure a peaceful and stable future for that city.
Ms Tasmina Ahmed-Sheikh (Ochil and South Perthshire) (SNP)
The Secretary of State for Foreign and Commonwealth Affairs (Boris Johnson)
We are committed to strengthening the UK’s bilateral relationships not just with the EU but across the world. We will deepen bilateral relationships with our natural partners, build new ones and work together to make the most of the opportunities ahead.
Ms Ahmed-Sheikh
At the weekend, the Prime Minister stated that she intended to update Chancellor Merkel on our Brexit preparations, and we know that the Business Secretary has already revealed the Government’s plans to Nissan and that the Foreign Secretary himself was kind enough to brief the Czech press that we were leaving the customs unions. Why does everybody know more about the Government’s plans than the elected representatives in this House, people across the United Kingdom and businesses in our constituencies that need and want to plan for the future?
Boris Johnson
The best advice I can give to the hon. Lady is that she study more closely the speeches of the Prime Minister, who has set out very clearly the fact that the UK will not be governed by EU law and that we will get the best possible deal, in trade in goods and services, for the benefit not just of this country but of the rest of the EU. Conservative Members are united behind the Prime Minister in achieving that aim.
Mr Julian Brazier (Canterbury) (Con)
Does my right hon. Friend agree that, for many countries in the eastern part of the EU, the largest issue at the moment is not Brexit but the potential threat from a resurgent Putin-led Russia? They are extremely grateful that the UK is right at the forefront of delivering troops to support the Baltic states and Poland.
Boris Johnson
I am grateful to my hon. Friend for allowing me, once again, to draw attention to global Britain’s role in delivering an enhanced forward presence in the Baltic states, as my right hon. Friend the Defence Secretary has said. That presence is of massive importance to those countries—[Interruption.] Opposition Members are interjecting from a sedentary position. This is one of the central points that we will be making to the incoming American Administration, and I am sure it is one that they already readily accept.
Emma Reynolds (Wolverhampton North East) (Lab)
I studied closely what the Prime Minister said yesterday at the CBI conference. She said:
“people don’t want a cliff edge”.
It is encouraging that the Government are now acknowledging that in March 2019 we risk falling back on World Trade Organisation rules and tariffs. Following the Prime Minister’s comments yesterday, will the Foreign Secretary confirm that the Government are looking at a transitional deal that will give us time to negotiate a trade deal with the rest of the EU and to arrange other matters, such as security?
Boris Johnson
I do not want to accuse the hon. Lady of unnecessary pessimism, but I have no doubt whatever that this country can achieve exactly what the Prime Minister has set out, which is the best possible deal in trade in goods and services; and it will be win-win for both the UK and the EU.
Mr Nigel Evans (Ribble Valley) (Con)
Does the Foreign Secretary agree that bilateral relations with non-EU countries such as America, Australia and Canada are extremely good and that those within the EU are extremely good as well, and now we have the opportunity to do a number of trade deals with all these countries? I understand that Tony Blair would like to help. Do you believe that he could have a role by banging the drum for Brand Britain around the world and accepting the fact that we are going to leave the European Union?
Boris Johnson
My hon. Friend raises the issue of the support of the former Prime Minister. I am tempted to say “Nec tali auxilio, nec defensoribus istis” when it comes to our campaign. My hon. Friend is completely right: there is a huge opportunity not only for a deep and comprehensive deal with our friends and partners in the EU, but to seek new free trade deals around the world, and for this country to become once again the global champion and agitator for free trade.
Mr Khalid Mahmood (Birmingham, Perry Barr) (Lab)
In between insulting the Italian Foreign Minister last week, showing that he has no understanding of the treaty of Rome, saying that he would not pressure Turkey over the death penalty and having a major bust-up with the head of the European People’s party, the Foreign Secretary managed to make one serious announcement. He told the Czech media that Britain would retain free trade with Europe, while leaving the customs union. Is that now the Government’s proposed plan and how does the Foreign Secretary intend to achieve it?
Boris Johnson
I am grateful to the hon. Gentleman for his question, but I must direct him to the answer that I have already given, which is that the Prime Minister has set out very clearly in her speeches and remarks what we hope to achieve, and I think it eminently achievable. Contrary to the impression that the hon. Gentleman sought to give, more and more of our friends and partners around the EU are seeing the merits of what is being proposed, and more and more are excited. The hon. Gentleman asked about relations, so let me tell him that relations are excellent and getting warmer—not just in the EU, but around the world.
Maggie Throup (Erewash) (Con)
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Alok Sharma)
The UK has strong diplomatic and economic relations with Bangladesh. We are the largest cumulative investor in the country and the largest bilateral grant donor. We also have close historical and cultural ties.
Maggie Throup
On Sunday, I attended the UK- Bangladesh catalysts of commerce and industry awards, which showcased the contribution that the Bangladeshi community makes to the economy here in Britain. As we look to strengthen our economic ties with countries outside the EU, does the Minister agree that we should continue to strengthen our trade relationships with countries such as Bangladesh?
Alok Sharma
There are half a million people of Bangladeshi heritage in the UK, and of course they make an immensely positive contribution to every aspect of British life. I agree entirely with my hon. Friend that we should be doing even more to encourage bilateral trade and investment. She will be pleased to know that we are supporting the Government of Bangladesh to improve their business climate.
Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP)
After the fatal collapse of the Rana Plaza in 2013 and recent reports indicating that structural repairs remain incomplete and that buildings still lack fire exits and fire alarms, what discussions has the Minister had with his counterparts to ensure workplace safety measures for those working in global corporations in Bangladesh?
Alok Sharma
The hon. Lady raises a very important point. My colleagues in the Department for International Development are working on precisely those issues. As a Government, we take these sorts of issues very seriously.
Lucy Allan (Telford) (Con)
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr Tobias Ellwood)
Responsibility for security in the west bank is shared between the Palestinian authorities and the Israeli security forces, depending on whether we are talking about areas designated A, B or C. In my discussions with the Israeli authorities, I have encouraged this area to be transferred from C to B and B to A.
Lucy Allan
Israel and the Palestinian Authority continue to work together closely to maintain security in the west bank. Last month, however, a Palestinian Authority police-officer-turned-terrorist shot and wounded Israeli soldiers. Does the Minister agree that security co-operation is vital to maintaining stability, and will he join me in condemning the wave of attacks against Israelis that we have seen over the past year?
Mr Ellwood
I join my hon. Friend in condemning those attacks, and I would encourage President Abbas and others in the Palestinian Authority to do so as well. We should not forget that more than 30,000 Palestinian Authority security forces are working with Israeli defence forces to provide that security, and the Israeli defence forces rely on that to ensure that the west bank is kept as safe and secure as possible.
Mr Nigel Dodds (Belfast North) (DUP)
Does the Minister agree that the best way forward for both Israel and the Palestinian people would be a revival of the middle east peace process involving direct talks between the Israeli Government and the Palestinian Authority, and does he agree that all efforts should be directed towards achieving that?
Mr Ellwood
I entirely concur with the right hon. Gentleman. We have done our best to bring the parties back to the table, but, as he will know, there have been a number of difficult months. We need to ensure that there are confidence-building measures, and that people do not incite violence, which takes us further away than the direction of travel that he suggests.
Sir Desmond Swayne (New Forest West) (Con)
Has the Minister walked the streets of Hebron which Palestinians may not use? We used to call that apartheid.
Mr Ellwood
In his lucid way, my right hon. Friend outlines the challenges that we face in Israel and, indeed, the west bank. It is important for us to ensure that the security measures of which we spoke in the context of the initial question are able to build that confidence so that we can bring people back to the table. I hope this is something that the American Administration will want to lean into.
Catherine West (Hornsey and Wood Green) (Lab)
As we approach the centenary of the Balfour declaration, we must renew our commitment to both aspects of that historic statement: the preservation of the state of Israel as a safe and stable national home for the Jewish people, but also the protection of the
“civil and religious rights of…non-Jewish communities in Palestine”.
With that in mind, will the Minister make it clear today that the United Kingdom Government oppose proposals to legalise outposts in the west bank retrospectively, or to build new illegal settlements?
Mr Ellwood
We had a very frank and thorough debate about the history and context of the Balfour declaration only last week. However, the hon. Lady is right to say that the role that the settlements are playing undermines the message that is coming from Israel, and leads people to ask whether Israel is serious about a two-state solution. The longer the settlements continue to be built, the more difficult it becomes to envisage the possibility of such a solution.
Chris Green (Bolton West) (Con)
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr Tobias Ellwood)
Post-conflict states are potential incubators enabling emerging and existing groups to flourish, so it is important for the international community to work with Baghdad to ensure that the complex and diverse make-up of Iraq is fully represented. I visited the country two weeks ago to see how governance was improving, but also to underline the United Kingdom’s support.
Chris Green
Westminster Cathedral, Westminster Abbey and Bolton town hall will be lit up in red tomorrow to mark Red Wednesday, an Aid to the Church in Need initiative to highlight religious persecution in Iraq, in Syria, and around the world. Will the Minister join me in supporting Red Wednesday to raise awareness of those who are suffering injustice and risking their lives for their faith?
Mr Speaker
I am sure the hon. Gentleman will be pleased to hear that the Palace of Westminster will be lit up in red as well.
Mr Ellwood
I shall be more than delighted to join you, Mr Speaker, in welcoming and supporting that initiative.
We should not forget that the diverse make-up of Iraq, which I mentioned before, is part of its history, but so, unfortunately, is sectarian violence. After al-Qaeda was flushed out, the answer to allowing best representation in Baghdad in fact allowed Daesh to gain popularity and to dominate Fallujah, Mosul, Ramadi and other places. We must not revisit that by failing to ensure that there is full representation across the piece in Baghdad.
Graham Jones (Hyndburn) (Lab)
What conversations have the Minister and the Foreign Secretary had with their counterparts in Iraq about a power-sharing agreement in the Mosul region, including Tal Afar, to ensure that we secure the peace after the liberation of the city and the region?
Mr Ellwood
I think the Foreign Secretary touched on this, and it was very much the focus of my attention when I visited the country last week. The way the liberation will move is that the east side of the city, on the right-hand side of the Tigris, will be liberated first, and there are plans for ward breakdowns to make sure the necessary leaders come in to provide that security, improvised explosive devices are removed, the water supplies are working and the place itself safe. It will take time, and this needs to be an Iraqi-led process, but the international community, through the United Nations Development Programme, is working very hard to make sure it is a success.
Martin Docherty-Hughes (West Dunbartonshire) (SNP)
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr Tobias Ellwood)
On 5 October, I issued a press statement condemning the announcement of the proposed settlement in Shiloh. In September, I met Defence Minister Lieberman and raised our concerns about settlements, and made it clear that unless they form part of a land swap anyone living there must live with the knowledge that they will one day have to move. That was accepted by Defence Minister Lieberman, who is living in one of the settlements himself.
Martin Docherty-Hughes
Does the Minister not therefore agree with me that a pillar of liberal democracy and the peace it brings is the rule of law, and that by reactively legalising illegal settlements on Palestinian land the Government of Benjamin Netanyahu continue to undermine democracy and progress to a lasting peace in the middle east?
Mr Ellwood
The hon. Gentleman touches on a process in which these illegal settlements become legal, and we have raised concerns about this.
The settlement of Shiloh is significant because it allows an extension of the settlement area east of Ariel, which essentially, between Nablus and Ramallah, cuts off or breaks the west bank from the River Jordan all the way to green-line Israel. That means effectively ruling out the possibility of a two-state solution.
Mr Philip Hollobone (Kettering) (Con)
Will Her Majesty’s Government use the opportunity of the centenary next year of the Balfour declaration to be bold and launch a peace initiative of their own to solve all these issues of settlements, security and the whole Israeli-Palestinian conflict?
Mr Ellwood
As I mentioned in the Westminster Hall debate on the Balfour declaration, we will be announcing plans as to how we will mark the year. It is also the anniversary of the mandate for Israel and Palestine and the withdrawal of Britain from the area. Also, we should not forget that it is almost 25 years since the Oslo accords, and therefore there is more work to be done. This is an international effort; it is also an effort that requires the Palestinians and the Israelis to work together, and we stand ready to provide support and make this happen.
Helen Hayes (Dulwich and West Norwood) (Lab)
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr Tobias Ellwood)
The Foreign Secretary regularly discusses matters relating to the middle east peace process with the US Secretary of State. At the UN General Assembly in September, I attended the ministerial meeting with other foreign leaders, and this issue came up when I spoke to John Kerry this Sunday evening.
Helen Hayes
The US election result has created a new sense of urgency in relation to the Israel-Palestine conflict. Will the Foreign Secretary set out what he is doing to secure a new UN resolution before 20 January, and beyond that date how the Government will be seeking to ensure that genuine progress is made towards a two-state solution and real and lasting peace for Palestinians and Israelis?
Mr Ellwood
For all the reasons I have spelled out before, there is a sense of urgency: the people of Palestine, and indeed the people of Israel, want this to happen. However, we have to wait for the new Trump Administration to embed itself, and we also make it clear that of course there is merit at the right moment in a balanced UN Security Council resolution which sets out the parameters for a workable, viable settlement leading to that two-state solution based on the clear and internationally agreed parameters, but it must command the full support of the Security Council.
Alistair Burt (North East Bedfordshire) (Con)
Mr Ellwood
My right hon. Friend is wise in what he says. We need to ensure that we grasp this opportunity. President Abbas is actually somebody we can work with, and we should remember that he will not be there forever. What will happen after him is not clear, and we need to ensure that we can work towards a two-state solution, but I want to make it clear that as things stand at the moment, the situation looks very bleak indeed.
Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)
Does the Minister agree that a resolution can be helpful only if it leads to direct negotiations between Israelis and Palestinians? Does he agree that it is most unhelpful that the Palestinian Authority has recently named a fourth school after Salah Khalaf, the person who masterminded the murder of 11 Israeli athletes at the Munich Olympics?
Mr Ellwood
I have commented on this matter before, and I absolutely agree with the hon. Lady that this is just inciting hatred and taking us away from the direction we want to go in. It is important that we should be able to get back to the table. We touch on these matters, but they are highly complicated. The role of Hamas in relation to the Palestinian Authority needs to be observed and considered. The other Arab nations can help in that regard. The difficulty is that the position that Prime Minister Netanyahu’s current coalition is working towards is also a consideration. The support of the United States is also critical. These are difficult matters, and I hope that, on the Balfour declaration anniversary next year, we will not be looking back 100 years. Instead, I hope that it will be a marker, and that we will be able to look forward to moving in a positive direction.
James Morris (Halesowen and Rowley Regis) (Con)
Does the Minister agree that the central principle in the middle east peace process has to be direct talks between the Israelis and the Palestinians in order to reach a two-state solution? Does he also agree that those negotiations need to take place on the basis of no preconditions?
Mr Ellwood
I absolutely concur with my hon. Friend. However, there are some Israelis who believe that the Palestinians will never accept the Israelis’ right to live in peace in a Jewish state and that they are teaching hate and glorifying terrorists. They think that the west bank will simply be turned into Gaza. On the other side, there are Palestinians who believe that the Israeli Government will never give them the state that they are working towards. We need to bury those myths. That is not what the people of Israel or the people of Palestinian actually want.
Margaret Ferrier (Rutherglen and Hamilton West) (SNP)
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr Tobias Ellwood)
I met my counterpart, the Foreign Minister Khalid al-Khalifa, this weekend, and our ambassador in Manama raised the case of Ebrahim Sharif on 16 November. We will continue to monitor the case very carefully indeed.
Margaret Ferrier
The US State Department has defended freedom of expression and explicitly called for the charges against Ebrahim Sharif to be dropped, whereas the Foreign Office has merely expressed concern. Does the Minister believe that such prevarication will convince the Government of Bahrain to drop those charges?
Mr Ellwood
The hon. Lady touches on a matter on which I feel I am developing a relationship with the Scottish National party. The United Kingdom and the United States have different relationships with Bahrain in terms of the style, the approach and the strategy that we use to influence countries in the Gulf and to advance the democratic process. We have a closer relationship with Bahrain, in which we can have frank conversations. We might not have put out a press statement on this matter—we might not have made the headlines in that sense—but I can assure her that we are having frank conversations with the aim of improving policing, the rule of law and democratic rights. This is happening; the hon. Lady just does not see it all the time.
Toby Perkins (Chesterfield) (Lab)
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr Tobias Ellwood)
I want to do it. [Laughter.]
Sir Alan Duncan
Let the little guy get a word in for once!
Throughout the election period, our embassy in Washington engaged both campaigns across the breadth of our policy interests, including NATO.
Toby Perkins
I agree with the Foreign Secretary that we should encourage all NATO allies to spend 2% of their GDP on defence, but will the Minister take this opportunity to send a message to President-elect Trump and to President Putin that article 5 is sacrosanct and not in any way conditional on our allies’ spending levels?
Sir Alan Duncan
I confirm that we strongly support the leaving in of article 5 as the bedrock of NATO and support NATO as the bedrock of European and wider defence interests.
Geoffrey Clifton-Brown (The Cotswolds) (Con)
Does my right hon. Friend agree that the Russians’ stationing of new ballistic missiles in Kaliningrad is curious given that it will probably unite NATO members, the United States in particular, around article 5?
Sir Alan Duncan
NATO is taking necessary and proportionated steps—balanced with dialogue—to strengthen defence and deterrents in response to Russian belligerence. At Warsaw, NATO announced an enhanced forward presence, which my right hon. Friend the Foreign Secretary has already referenced today, in Poland and the Baltic states. The UK will lead in Estonia, providing an infantry battalion of 800 troops from May of next year.
Fabian Hamilton (Leeds North East) (Lab)
May I come back to article 5? The principle that an attack on one NATO country is an attack on all is the cornerstone on which the alliance is built. At a time when the Baltic states are rightly concerned about Russian expansionism, that principle is now more important than ever. Will the Minister make it clear today that article 5 is an inviolable right for all NATO members, not something that is contingent on how much they spend on defence?
Sir Alan Duncan
I can repeat my having said just that. July’s NATO summit demonstrated the commitment of all allies to article 5, and I can confirm that again today.
Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)
The Secretary of State for Foreign and Commonwealth Affairs (Boris Johnson)
The Government remain committed to the nuclear deal with Iran, and we look forward to working with the new Administration in the United States to ensure that it is a success.
Gerald Jones
As the Foreign Secretary may know, people sometimes say things during election campaigns that are falsehoods or exaggerations in order to win. Can he provide any assurance that that was the case when President-elect Trump called the agreement with Iran
“the worst deal ever negotiated”?
Boris Johnson
I am not going to get into a commentary on the election campaign that has just taken place in the United States. All I can say is that we in this Government think that there is merit in the deal. There has been a considerable increase in trade with Iran since sanctions were lifted—a 40% increase in UK trade. Deals have recently been announced by Lotus and Vodafone, so we should be positive about our engagement and keep the thing on the road.
Liz McInnes (Heywood and Middleton) (Lab)
The agreement with Iran was hard won and hugely important both to remove the threat of Iran gaining nuclear weapons and to start a process of normalising relations with Tehran. Even those who originally opposed the deal, such as Prime Minister Netanyahu, now urge President-elect Trump not to tear it up. Can I press the Secretary of State to join those calls today and make it clear that the deal must continue to be honoured by all sides?
Boris Johnson
I repeat the point that I just made. We believe in this deal. We think it is good. We are making progress. As the hon. Lady will know, we recently reopened the UK embassy in Tehran. Ambassador Nicholas Hopton is now in post and doing a very good job—although if other people want to volunteer for that post, I suppose they are always welcome to do so. He is using that opportunity to develop our relations with Tehran, which will be of increasing importance in the years ahead. That is a point that we will make to our friends in Washington and worldwide.
Stuart Blair Donaldson (West Aberdeenshire and Kincardine) (SNP)
The Secretary of State for Foreign and Commonwealth Affairs (Boris Johnson)
My immediate priority is to build a strong relationship with the incoming US Administration with the aim of making progress on our shared goals at every level of the international agenda. Foremost among them are vanquishing Daesh, responding to the crisis in Syria and standing firm against the challenge from Russia.
Stuart Blair Donaldson
According to figures released last week, Scotland has taken over a third of the Syrian refugees in the UK to date. However, the UK Government plan to take only a third as many as Sweden by 2020. How does the Foreign Secretary explain to his counterparts in Europe the UK’s shirking of its responsibilities?
Boris Johnson
I must reject the hon. Gentleman’s assertion that this country is not doing enough to help the people of Syria or the region. As he will know fine well, this country is the second biggest global donor to the response to the humanitarian crisis in that region, and we can be proud of our record in giving humanitarian support there, and in offering sanctuary and refuge here in the UK.
Maria Caulfield (Lewes) (Con)
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr Tobias Ellwood)
This is an important point. President Sisi is very conscious of the challenges that Egypt is facing from its own extremists, and Britain is providing support on that. In the longer term, there will be plans for the border to reopen. Unfortunately, many of the tunnel systems were used to smuggle in to Hamas equipment that was being used against Israel, but the strength of the relationship between Israel and Egypt is allowing them to co-ordinate things to make sure that that is curtailed.
Chris Law (Dundee West) (SNP)
Boris Johnson
As I repeatedly told the House, we may be leaving the EU but we are not leaving Europe, and we are certainly not leaving the EU for a small time to come. In that time, we are fully paid-up members and it is my view that we should take part to the full, including in such cultural co-operation as the hon. Gentleman describes—and we will do so. We will also continue to take part in such European cultural ventures beyond our exit from the EU.
Sir Edward Leigh (Gainsborough) (Con)
Mr Speaker
Until the hon. Gentleman named the name, I thought he was about to make a job application.
Boris Johnson
It is wonderful to hear of a senior French politician, who is married to a British wife—[Interruption.] A Welsh wife, indeed. I hesitate to blight Monsieur Fillon’s chances by offering him my congratulations or my support at this stage.
Dr Philippa Whitford (Central Ayrshire) (SNP)
Mr Ellwood
May I just confirm whether this is a Bedouin camp that is inside green-line Israel—
Mr Ellwood
It is. The rules are different, depending on whether or not Bedouin camps are in the west bank or in Israel proper. Nevertheless, the necessary support measures must be given to those people if they are going to be moved. I visited a Bedouin camp the last time I was there, and I will be looking at this particular announcement and making a statement on this later today.
James Duddridge (Rochford and Southend East) (Con)
Boris Johnson
As hon. Members will know, the UK played a crucial role in bringing an end to the conflict in the former Yugoslavia. As my hon. Friend knows well, there are people across that region who look to us for encouragement and support, and we will be hosting a western Balkans summit here in London in 2018 to try to encourage further stability and confidence building in that region.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Alok Sharma)
As the hon. Gentleman will know, this Government have done an enormous amount in tackling tax evasion, and, as a result, have collected enormous amounts of funds. Ultimately, these matters are for the Treasury, and I am sure that he will have the opportunity to put those questions at Treasury questions.
Kevin Foster (Torbay) (Con)
Boris Johnson
As my hon. Friend will know, the Secretary of State for the Environment, Food and Rural Affairs has been taking the lead in Hanoi in urging the international community to take tougher measures against elephant and rhino poachers. The figures are heartbreaking. In the late 1990s, there were 1.2 million elephants in the world. In Africa, the figure is now down to 300,000. In fact, it has gone down 120,000 since 2010. It is a catastrophic loss for Africa and for the world, and the UK is leading the fightback. We will be holding a summit on the conservation of endangered wildlife in London in the next couple of years.
Margaret Ferrier (Rutherglen and Hamilton West) (SNP)
Boris Johnson
We are very honoured that our Prime Minister is the first female Prime Minister to be invited to attend the GCC in the Gulf. It emphasises the very strong relations that we have with that area. This Government are doing everything they can to satisfy themselves of the compliance of Gulf countries, notably of Saudi Arabia, with the principles of international humanitarian law.
Bob Blackman (Harrow East) (Con)
Following the decision of the Indian Government to withdraw the 500 and 1,000 rupee notes, what efforts has the Minister made to ensure that British citizens of Indian descent are able to exchange their money?
Alok Sharma
As my hon. Friend will know, it is for the Indian Government and the Reserve Bank of India to define what is Indian legal tender. However, I can say that the Foreign and Commonwealth Office has updated its travel advice, advising British nationals travelling to India how to act in this matter, and we advise those nationals to monitor the situation closely.
Tom Brake (Carshalton and Wallington) (LD)
What is the Foreign Secretary doing to secure the release of Nazanin Zaghari-Ratcliffe?
Boris Johnson
I can tell the right hon. Gentleman that the Foreign Office is in regular contact with the Iranian Government at all levels. The matter has been raised by the Prime Minister with President Rouhani, and by me with Foreign Minister Zarif. My hon. Friend the Member for Bournemouth East (Mr Ellwood) has only recently had meetings on that very subject. The matter is of the utmost priority for this Government, and we are doing our level best to resolve it.
Martin Vickers (Cleethorpes) (Con)
Talks on the future of Cyprus have broken down without agreement. As one of the guarantor powers, can the Minister advise what the Government will do to try to influence the situation and to enable the talks to continue?
The Minister for Europe and the Americas (Sir Alan Duncan)
It is an exaggeration to say that the talks have totally broken down, but they have stalled for the moment, and we are giving every possible support that we can to enable the talks to continue in the hope that they can yet reach a successful conclusion for the reunification of the island.
Ann Clwyd (Cynon Valley) (Lab)
Will the Minister assure us that the UK will continue to assist in the gathering of evidence for war crimes and crimes against humanity in Syria, so that, eventually, those responsible for these terrible atrocities will be brought to book?
Boris Johnson
I can reassure the right hon. Lady, who I know has campaigned on this issue for many years, that the initiative that we started in September at the UN General Assembly with the Belgians and other countries continues to work well. We are gathering the evidence that we need, and I am confident that in due course we will bring Daesh operatives to justice.
Sir Hugo Swire (East Devon) (Con)
All countries of the EU, with the exception of the United Kingdom, have resumed direct flights to Sharm el-Sheikh, which are so vital to the Egyptian economy. What more do the Egyptian Government have to do to persuade the Government to resume direct flights?
Boris Johnson
This has been a very difficult matter. As the House will know, the Egyptian Government are strongly desirous of our resuming flights to Sharm el-Sheikh. Unfortunately, we are not yet able to do so. Perhaps the best I can say is that consultations and work are still going on between our two Governments and between our security services to give the UK Government the reassurance that they need.
Ian Austin (Dudley North) (Lab)
In South Africa, black people were not able to vote, all political opposition was outlawed, and different races could not even get married. In Israel, there is freedom of movement, assembly and speech, all governmental institutions are integrated, and all citizens can vote, so is it not a disgrace and an insult to the middle east’s only democracy and to the black people who suffered under apartheid to hear Israel described as that, as we have heard a former Minister do this afternoon?
Mr Ellwood
The hon. Gentleman makes two separate points, and we need to consider both distinctively. I will be visiting South Africa in the new year and I will be looking at some of the election processes that take place. We are supportive of both countries, but in the case of Israel, it is a democratic country in a very tough neighbourhood and Britain stands by our friendship. We are an ally of Israel and long may that continue.
Jeremy Lefroy (Stafford) (Con)
What discussions have the Government had with their counterparts about the very dangerous political crisis in the Democratic Republic of Congo?
Mr Ellwood
I visited the DRC during the summer, and I pay tribute to the work that my hon. Friend has done in that regard. As in other parts of Africa, there is a president who does not want to honour the constitution and wants to stay on longer. We request that he recognises the constitution and stands back. We need the electoral commission to complete its work so that there is an updated electoral register and fresh elections can take place. We hope that happens soon.
Simon Danczuk (Rochdale) (Ind)
My constituent, Helen Veevers, faces allegations in Kenya that she conspired to poison her father. She is concerned that she could be the victim of police corruption in that country. Can the Minister reassure me that the Foreign Office is making representations and will keep a close eye on the situation?
Mr Ellwood
The hon. Gentleman will be aware that this is a very delicate case indeed. We are providing consular support. I do not believe it is in anyone’s best interests for us to expand any further on the details. I would be more than happy to meet the hon. Gentleman directly after Foreign and Commonwealth Office questions to say what more is happening.
Several hon. Members rose—
Mr Speaker
I am sorry to disappoint remaining colleagues, but demand today has been exceptionally high. We must now move on.
Petition
(8 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text
Nic Dakin (Scunthorpe) (Lab)
I rise to present the petition of several hundred residents of Scunthorpe county constituency.
The petition states:
The Petition of residents of Scunthorpe County Constituency,
Declares that there is strong opposition on the grounds of smell, noise, vermin and pollution to planning application WD/2016/1556 which has been submitted to North Lincolnshire Council proposing to build a waste transfer station on Sunningdale Road, Scunthorpe. The petitioners therefore request that the House of Commons urges North Lincolnshire Council to refuse planning application WD/2016/1556, which seeks to build a waste transfer station on Sunningdale Road in Scunthorpe, on the grounds of smell, noise, vermin and pollution.
And the Petitioners remain, etc.
[P001981]
Organ Donors (Leave)
Tuesday 22nd November 2016
(8 years, 1 month ago)
Commons ChamberRead Full debate Organ Donors (Leave) Bill 2016-17 View all Organ Donors (Leave) Bill 2016-17 Debates Read Hansard Text
A Ten Minute Rule Bill is a First Reading of a Private Members Bill, but with the sponsor permitted to make a ten minute speech outlining the reasons for the proposed legislation.
There is little chance of the Bill proceeding further unless there is unanimous consent for the Bill or the Government elects to support the Bill directly.
For more information see: Ten Minute Bills
This information is provided by Parallel Parliament and does not comprise part of the offical record
Louise Haigh (Sheffield, Heeley) (Lab)
I beg to move,
That leave be given to bring in a Bill to amend Part 8 of the Employment Rights Act 1996 to make provision about leave for persons donating body organs for transplant; and for connected purposes.
I start by sending my thanks and, I am sure, the thanks of the whole House to the nurses and medical staff who make up the NHS Blood and Transplant service and the staff who run the NHS organ donation register. It is a relatively small team in the grand scheme of things, but it is thanks to their effort and their utter brilliance that thousands of lives are saved each year which may otherwise have been lost, and it is thanks to their ingenuity and dedication that last year organ donations in the UK reached a record high. The difference they are making to families whose loved ones have been given a new chance at life often goes unsaid.
I would also like to take this opportunity to note the work of hon. Members, including the hon. Members for Burton (Andrew Griffiths) and for Montgomeryshire (Glyn Davies), who have put the issue of organ donation firmly on the parliamentary agenda in recent years.
Organ donation is improving year on year, in part due to small changes such as the option for someone to sign up when they renew their driving licence. Last year alone, that method saw an extra half a million people register to become potentially life-saving donors. These are small changes that are making a huge difference. However, as the NHS Blood and Transplant service has said, there is an awful lot of work to be done not only to raise consent figures—currently at 62%, despite evidence suggesting that over 90% of the public would give their organs in death—but to encourage families to have that difficult conversation about what they would do if the unthinkable happened.
Family refusal after the death of a loved one is, sadly, the single biggest barrier to organ donation. Of course, it is completely understandable and natural that, in the aftermath of a life-changing loss, all that people want to do is to preserve what is left behind, but if 80% of families consented 1,000 more lives a year could be saved and 1,000 more families kept together. So I would like to take this opportunity gently to urge families to have that conversation, to find out their loved one’s wishes and to tell them theirs, because the chances are that, if the unthinkable happened, their loved one would want to save a life.
While much of the focus is rightly dedicated to those brave families who have made that difficult decision, living donors should also be hailed for their selflessness in giving a kidney, part of their liver or bone marrow to save the life of someone they may never even have met. It is living donors for whom my Bill would guarantee legal rights they have so far not enjoyed.
Six thousand people nationwide are currently going through the utter agony of waiting for the call that could save their lives, but, year in, year out, the availability of those organs never matches need. Living organ donors are playing their very significant part in bridging that heart-breaking gap. Last year alone, over 1,000 of them donated part of their liver or a kidney, and many more donated their bone marrow.
The criteria for organ donors mean many are often of working age and in work. It hardly needs saying, but giving an organ is an enormous commitment, and if someone is an employee, the time needed off work may give them pause for thought. The NHS advises that living donors can expect to need up to 12 weeks’ recovery time. This will vary from person to person, and depending on what job they do, but the point is that this is a very serious commitment for any would-be donor.
People have to weigh up whether they can afford to take that time off if their boss insists they take it unpaid and if they have to wait for any compensation to come through from the relevant NHS trust. They have to weigh up whether they can make the commitment to be out of work for that length of time. They are also always worrying in case their position or their terms and conditions are not quite the same on their return as when they left. That uncertainty is unacceptable. It is putting barriers in the path of people becoming life-saving donors. Currently, the law has nothing to say.
The issue was brought to my attention by a man who told me he had donated bone marrow to an anonymous blood cancer patient. He was allowed just three days off work—unpaid—to cover the time in hospital. He felt pressured to return, and he was accused of “making himself sick” by his employer. That is just one example, but it tells us of the pressures faced by workers who may want to donate.
Any and all barriers standing in the way of living donors must be dismantled. The lack of legal employment protections, which is holding back these potential life-savers, is significant, and it can be easily corrected by Government. That time out of the workplace may completely deter young people, in particular, who have the highest likelihood of donating high-quality bone marrow.
That is why my Bill will guarantee living organ donors the right to paid time off to allow them to recover, safe in the knowledge that they will not be financially penalised and that their job will be waiting for them when they return. An employee will not be checking their phone, worried they may get a call off the boss, or rushing back to work because they are worried they should be there. Instead, they can have the time off that they need to get better and that they so deserve for having saved a life.
The Bill will also guarantee that employees’ terms and conditions and their rights are the same on their return as when they left. In an age where workers feel increasingly insecure in their jobs, and where, at the sharp end of the economy, unscrupulous employment practices are rife, these legal guarantees could make the difference between donating or not. We are already chronically short of donors, and we should be clearing every conceivable barrier put in the way of these potential life savers. I am delighted that major businesses such as my own former employer, Aviva, and the DIY retailer, Wickes, back my call. It is fantastic that a cross-party group of MPs, including the Chair of the Health Committee, is supporting it as well.
Each donation is an astonishing story of bravery in its own right and a life-changing moment for the individuals and families who benefit from that generosity. As work gets increasingly precarious, employees must rely on the protections in law that guarantee their rights. These guarantees will not only bring peace of mind but help to increase the number of living donors from 1,000 and bridge the gap between availability and need. Crucially, this will send a clear signal from Government, and from this House, that if you are prepared to give an organ to save a life, the law will back you every step of the way.
Question put and agreed to.
Ordered,
That Louise Haigh, Steve McCabe, Will Quince, Jim Shannon, Catherine West, Ms Margaret Ritchie and Dr Sarah Wollaston present the Bill.
Louise Haigh accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 20 January 2017 and to be printed (Bill 96).
Opposition Day
(8 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text
Education and Social Mobility
(8 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
16:14 - The House divided: - Ayes: 263 / Noes: 310 - Question accordingly negatived.
Mr Speaker
We now come to the Opposition day motion on education and social mobility. I inform the House that I have selected the amendment in the name of the Prime Minister. I should advise the House that a very substantial number of Back Benchers have applied to speak—no fewer than 28, if memory serves. Realistically, I imagine, the debate will not run beyond 4 pm or, at the latest, 4.30 pm. Of course there is no time limit on Front-Bench speeches. Front Benchers tend to take significant numbers of interventions, perfectly properly, and that is favoured by the House, but I am sure that those on both Front Benches will wish to tailor their contributions in the light of what I have said.
Angela Rayner (Ashton-under-Lyne) (Lab)
I beg to move,
That this House believes that every child throughout the UK must be given the opportunity to reach their full potential; further believes that there is no evidence that additional academic selection in the school system will improve social mobility; and calls on the Government to instead concentrate on providing the best education possible for all children.
Thank you, Mr Speaker. I hope to be brief but substantive in my comments. I start by thanking the emergency services across the UK who helped many of our constituents during the floods yesterday, particularly my constituents and businesses across Tameside and Oldham.
It should be the duty of all Governments to provide the best education for every child. Today we call on the whole House to show that it shares this commitment. Only last Wednesday, we heard that Britain has a “deep social mobility problem”; that for this generation of young people, in particular, it is getting worse, not better; and that this is the result of an unfair education system, a two-tier labour market, an imbalanced economy, and an unaffordable housing market. That is not an accusation from the Opposition, but the conclusion of the Government’s own Social Mobility Commission. The commission made many recommendations on how we can offer the best start in life for every child— but, crucially, new academic selection was not one of them.
James Berry (Kingston and Surbiton) (Con)
Will the hon. Lady inform the House of precisely how many grammar schools she visited as shadow Education Secretary before deciding to oppose the policy in the Green Paper and lay this motion?
Angela Rayner
As a parent, as a school governor, and as a Member who used to represent trade union members, I have visited many grammar schools. My contribution to this debate will be based on fact and evidence. I hope that the hon. Gentleman will look at the facts and evidence and vote accordingly. In fact, the Social Mobility Commission offered a clear recommendation to abandon any plans for further academic selection. It did so because it knows that social mobility is facing a crisis and that further academic selection is simply not the answer; in fact, it will only entrench the problem.
Mike Wood (Dudley South) (Con)
Could the hon. Lady explain why it is right for my constituents to be able to go to a grammar school in Birmingham but not to be able to go to a grammar school in Brierley Hill, because there is no existing provision there?
Angela Rayner
In my contribution, I hope to explain exactly why we need to move away from selection and towards inclusion in our education system.
The conclusions of the Social Mobility Commission will find much support in this House, not just among Opposition Members but, I hope, among Government Members as well. We still have not heard from the Prime Minister whether any of the recommendations will be adopted.
Ian Austin (Dudley North) (Lab)
Before we have to listen to the sixth-form debating points from Conservative Members, does my hon. Friend agree that what they ought to do is to set out the evidence for this policy? They should tell us where these schools will be, how many of them there will be, how much the policy will cost, how these schools will select their pupils, where the resources will come from, what the pupils will learn and how the schools will differ from existing ones.
Angela Rayner
I absolutely agree with my hon. Friend. There are clearly many questions to be answered about the evidence for such a policy.
I want to give the Education Secretary the chance to end this uncertainty in our school system. Can she tell us which of the commission’s recommendations she will be accepting, and whether the Government have rejected the recommendation on schools, in particular? The challenges that we face as a country go much further than this one misguided policy.
Gloria De Piero (Ashfield) (Lab)
Last year in Ashfield 66% of children from disadvantaged backgrounds did not get five A* to C GCSEs. We are the 13th lowest constituency at sending 18-year-olds to higher education. That is the real scandal, is it not—not the grammar school proposals?
Angela Rayner
I thank my hon. Friend for her absolutely splendid intervention, because we know that increasing selection is not the answer to the crisis that is facing our school system.
Mr Stephen Hepburn (Jarrow) (Lab)
Is it not a fact that the demand for grammar schools is coming from wealthy parents who are seeing private education become more and more priced out of their reach, with fees of more than £21,000 a year? It is a fact that there are four times more children from privately paid prep schools getting into grammar schools than there are kids from state schools. Surely we should not let people get an elite education on the cheap, paid for by the taxpayer.
Angela Rayner
I thank my hon. Friend for his contribution. The report by the Social Mobility Commission that came out last week stated that the people who were finding it hardest to progress were not just the most disadvantaged, but those earning around £22,000 a year. Those are the hard-working families—the people who are just getting by—that this Prime Minister pledged to support on the steps of 10 Downing Street. I want to find common cause with Members from all parts of the House and all parties in making Britain a country in which every child gets an excellent education and the best start in life.
John Redwood (Wokingham) (Con)
When the hon. Lady goes to watch one of our best sports teams, does she think that it is a problem that its members were selected and given an elite education?
Angela Rayner
The right hon. Gentleman knows that this is a completely different issue. I say to him, as I say to all hon. Members from across the House, “Follow the evidence.”
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
Talking of excellence in sport, does my hon. Friend agree that we should celebrate the fact that Mo Farah, who grew up and went to a state school in my constituency, has succeeded on the world stage? The school that he attended is now suffering from cuts, which mean that it is referring more than 40% of its pupils for mental health support services.
Mr Speaker
He is also a staunch Arsenal fan, which makes him an even greater man.
Angela Rayner
I thank my hon. Friend for making that point. We need to make sure that every child, regardless of their background, makes the best progress in life. We know that selection is not the way forward.
Several hon. Members rose—
Angela Rayner
I am going to make some progress before I take any more interventions.
I want to find common cause, and I know that many Government Members agree with me that expanding academic selection is hardly the best way to ensure that every child makes the best progress. Members of all parties know that all the evidence tells us that providing an excellent education starts at the earliest point. Access to childcare and early years education is absolutely vital, not just in helping children, but in helping every family to fulfil its potential. Indeed, by the time they would take the 11-plus, children from the most disadvantaged backgrounds are already, on average, 10 months behind. The evidence shows that investment in early years is the best way to close the attainment gap between the most disadvantaged children and their affluent peers.
Lyn Brown (West Ham) (Lab)
Does my hon. Friend agree with David Cameron, who said:
“There is a kind of hopelessness about the demand to bring back grammars on the assumption that this country will only ever be able to offer a decent education to a select few”?
Angela Rayner
I find myself agreeing with the former Prime Minister, who was elected to make those contributions to the debate. That was the platform and the manifesto on which the Conservative Government stood, which they are currently rejecting.
I know from personal experience, as will parents from across this Chamber, the incredible impact that childcare can have, not just on children and their education, but on entire families. Leaving school at 16, with no qualifications and a newborn son, Labour’s Sure Start centres helped me to learn to be a better parent to my son. I know that I would not be speaking in this House today without those programmes, and that they have helped to offer my son the opportunities I never had growing up.
Chris Philp (Croydon South) (Con)
What would the hon. Lady say to parents in my constituency and in the rest of Croydon—where there are no grammar schools—who have to travel for miles and miles to an adjacent grammar school in either Sutton or Bromley? She is seeking to deny those parents choice, is she not?
Angela Rayner
I am seeking to ensure that every child has the best opportunities in life and a great start. I do not want the hon. Gentleman’s constituents to have to travel miles away from his constituency; I want them to have absolutely the best education possible, and selection does not provide that for every child.
Lucy Powell (Manchester Central) (Lab/Co-op)
My hon. Friend is making an outstanding opening speech. Does she agree that in this debate the point about choice is really a non-starter? The choice lies not with the parents, but with the school. The school gets to choose the kids; the parents do not get to choose the school. Invariably, the school chooses the children on their financial and social wellbeing rather than on anything else.
Angela Rayner
I absolutely agree with my hon. Friend, and I pay tribute to her for the outstanding work that she did when she was on the Front Bench.
Several hon. Members rose—
Angela Rayner
I am going to make some more progress.
The Social Mobility Commission talked about treadmill families, who are running fast but are stuck in the same place, and who are working hard but do not have anything to show for it at the end of the week. Childcare and early years intervention will do far more to address those problems than would a focus on new academic selection at age 11. Yet we have seen the closure of more than 800 Sure Start centres since 2010, the loss of around 45,000 childcare places and the closure of 1,000 childcare providers in the last five years.
There are similar challenges facing our existing schools. The Institute for Fiscal Studies has shown that our schools are facing the first real-terms cuts to their budgets in nearly two decades, just as demand for school places is growing. We already know the consequences: more staff leaving, more schools in disrepair and more courses being cut. The Department for Education has missed its teacher training targets for four years in a row, while more experienced teachers are leaving the profession in record numbers and half a million pupils are being taught in super-sized classes. It should be our mission to provide an excellent education for all children, and we know what is needed to provide that: high-quality early years education, and the best heads and teachers teaching the right curriculum to manageable classes in decent school buildings, with high standards and good behaviour.
Let me say to the Education Secretary and all Government Members that if they take serious action to make the changes our education system needs, I will be the first to support them, because education policy should not be about ideological dogma, but about looking at all the evidence and pursuing policies that will improve the lives of all children.
Anna Soubry (Broxtowe) (Con)
Does the hon. Lady agree that the academy programme has delivered considerable success? Will she give it her unequivocal support, and will she condemn the members of the National Union of Teachers who picketed the Kimberley School in my constituency when it had the temerity to break free of the local authority and establish an excellent academy?
Angela Rayner
Education—I hope we can agree on this—is not about the vehicle, but about the drivers. Focusing on the vehicle does not deal with the fundamental issues of collaboration, leadership and good teaching in our school system.
Several hon. Members rose—
Angela Rayner
I will make some more progress.
The purpose of today’s debate is to send a message that Members from all parties are committed to an evidence-based approach to education policy, not to pursuing the failed policy of academic selection. We know that such a policy is not the answer to Britain’s social mobility crisis, and the Government knew that, too, until very recently. Indeed, the former leader of the Conservative Party—the one who won an election—had explicitly promised not to do so: only just gone, but so quickly forgotten. Why has that pledge been ripped up by the new Prime Minister? The Education Secretary has said it is to help solve Britain’s social mobility crisis, but the evidence for that is scant. I will not recite this point at length, but that was conclusively demonstrated in the recent Back-Bench business debate, which focused precisely on the evidence, secured by my hon. Friend the Member for Wigan (Lisa Nandy) and the hon. Member for Stroud (Neil Carmichael), the Chair of the Education Committee.
Several hon. Members rose—
Angela Rayner
I am not going to take interventions on that point. I will make some progress.
We know that those from disadvantaged backgrounds are far less likely to get into selective schools, even if they are just as bright as their better-off peers, and we know that even if they do get in, the impact on their attainment is minimal at best. It is not just Labour Members who know it; dozens of the Education Secretary’s own Back Benchers know it. The greatest concerns are about the mistaken priorities revealed by this policy.
Several hon. Members rose—
Angela Rayner
I want to make some progress, because I will wrap up shortly.
In the consultation document launched in November, the Government have already pledged £50 million to help existing grammar schools to expand. The same Green Paper made a series of substantial, uncosted pledges to schools that want to become grammars or to academy chains that want to open them. Now, just this weekend, Government sources briefed The Sunday Times that there will be “tens of millions” more to help grammar schools to expand.
The idea that this is the way in which the Government should spend taxpayers’ money is simply baffling. When nurseries across the country are facing closure because the Government will not deliver the investment needed to deliver on their manifesto pledge to provide 30 hours of free childcare a week and our schools are facing deeper cuts in their budgets than at any time since the 1970s, why is this money being taken away from them?
Andy Burnham (Leigh) (Lab)
My hon. Friend is making an outstanding speech. Have we not seen the problem with Tory education thinking this afternoon? Government Members think that some types of schools are better than others and that some children deserve better opportunities than others. That is what is so entirely wrong with what they are arguing today.
Angela Rayner
Do you know what? That is the real rub: that is the difference between Labour Members and Government Members. We believe that teachers are invaluable in making sure that our schools are the best they can possibly be, rather than focusing on the vehicle in which those teachers and drivers take forward that mission.
We know that Members across this House agree that this is not the way we should spend school budgets. Members in the devolved nations will want to know the implications for their own school budgets, too. I know that many Government Members share the view of Labour Members that education is the key to social mobility, and that for all our differences on policy, they would not want the Government to waste the Department for Education’s budget on an ineffective vanity project. That must be the key test of every spending commitment made by the Secretary of State.
Tom Pursglove (Corby) (Con)
Will the hon. Lady provide some clarification? We have heard loud and clear her position on grammar schools, but is it also her position that the Government should close all the grammar schools that already exist?
Angela Rayner
Again, I reiterate my point that Members on both sides of the House have the absolute responsibility to make sure that the policies they introduce in this House for the education of all our children are in their best interests and are evidence-based. This must be the key test of every spending commitment made by the Secretary of State: will this money be spent on something that we know will improve the lives of children across this country, whatever their background? That is the point of our motion, and I urge all Members on both sides of the House to ensure that our collective endeavour is always for the best education for every child.
The Secretary of State for Education (Justine Greening)
I beg to move an amendment, to leave out from ‘potential;’ to end and add
‘shares the strong commitment of this Government to promoting and improving social mobility and building a country that works for everyone; notes that there are now more than 1.4 million pupils in England attending good or outstanding schools than in 2010; and welcomes the opportunity afforded by the Schools that Work for Everyone consultation to seek the widest possible range of views on how the Government can build upon these successes and awaits the outcome of the current consultation.’.
Social mobility matters hugely to this Government and, of course, to Members across this House. It is easy for us to say that where someone starts should not dictate where they finish, but the greatest challenge we all face is that, in reality, that still makes a difference, as it has done for generations. As last week’s Social Mobility Commission’s report tells us, just 5% of children on free school meals gain five good GCSEs; they are 29% less likely to take two or more of the facilitating A-levels that will help to keep their options open; and they are 34% more likely to drop out of post-16 education altogether. It is therefore no surprise that they are 19% less likely to go to university, and 47% less likely to attend a top Russell Group institution.
Siobhain McDonagh (Mitcham and Morden) (Lab)
Given the excellent case the Secretary of State is laying out, how can those statistics be changed by grammar schools when currently only 3% of kids on free school meals go to grammar schools?
Justine Greening
I will come on to that point, but as we already have grammar schools, it is quite right for us as a Government to set out the case for how we make sure that they play their full role in driving social mobility.
I have set out a number of facts about the prospects of too many young people from disadvantaged backgrounds in our country. None of these facts should be acceptable to us. They certainly are not acceptable to me or this Government. I believe that social mobility matters for several key reasons. First, it matters for individuals. I believe that the innate desire of people to do well is one of the most powerful forces for change in our country, and social mobility is about our country working with the grain of human nature. Secondly, social mobility matters for communities. Fundamentally, feeling that we all have an equal shot at success—having equal opportunity—is the glue that binds us together. Lastly, social mobility matters for our economy. Investing in people is a core part of how we raise productivity. Yes, we need to build roads and railways, but we are determined to build up people, too.
Jack Dromey (Birmingham, Erdington) (Lab)
How can the Government claim to be the party of social mobility when 800 children’s centres have closed and 29 nursery schools have closed in the past year alone? That is letting down a whole generation of two, three and four-year-old kids, because if they fall behind at that age, they will never catch up.
Justine Greening
Of course early years education matters. We are investing in not only improved but more childcare for parents around the country—for working parents, in particular—because we think that having a strong start is absolutely vital. As I was saying, this is about improving not just the prospects of individuals and communities, but the prospects of our country and its economy, and we have to build our country’s economy by building our people.
Justine Greening
Of course, this is not about additional secondary modern schools or a return to a binary system. The reforms over the last six years have given children and parents a more diverse offer and set of choices in education than ever before. It is now time to see how grammar schools can play a stronger role in our education system in the 21st century.
Lucy Powell
The Secretary of State is citing much of the evidence from last week’s Social Mobility Commission report about the challenge our country faces. Why will she not adopt in full the recommendations of that report on how to tackle those inequalities, rather than cherry-picking the little bits that she wants to bring to the House?
Justine Greening
The report, quite rightly, set out that we need a much longer-term programme of social reform. Alan Milburn talked about a 10-year programme. It also pointed to our focus on improving attainment in schools. The bottom line is that we will not make significant progress on social mobility until we focus on the areas of common ground, rather than the Opposition spending their entire time focusing on areas where they do not agree.
Several hon. Members rose—
Justine Greening
Let me make some progress.
I was setting out why the Government believe that driving social mobility matters so much. In reality, as challenging as it is for our country, no country in the world has managed to crack the issue of social mobility. That is because it is highly complex, many factors feed into it and improving social mobility is, as the Social Mobility Commission says, a long-term issue that needs a long-term approach, not to be treated like a political football for short-term political gain. If we are to make a difference, we must see social mobility as a generational challenge that we must tackle together on behalf of the next generation.
The difference may be that for us, fundamentally, social mobility is an agenda of levelling up opportunity for those who do not have it—something that, I hope, we can all agree is the right thing to do. Education is, of course, at the heart of how we do that.
Jeremy Quin (Horsham) (Con)
On that point, I congratulate my right hon. Friend on the support that is provided by the pupil premium. That £2.5 billion really has helped to narrow the gap in attainment.
Justine Greening
I am grateful for that intervention. Not only is that spending protected for the course of this Parliament, but we are working through the education endowment fund to ensure that we understand how that investment can have the biggest impact for disadvantaged children. I went to see a grammar school last week that has a high proportion of children who are eligible for free school meals and the pupil premium. We looked at what it is doing to improve the attainment of those young people.
Wes Streeting (Ilford North) (Lab)
To help build a consensus around our education policy, perhaps the Secretary of State could give us one piece of evidence that suggests that grammar schools would improve educational outcomes and social mobility for the most disadvantaged.
Justine Greening
We know that the education gap between children on free school meals who go to grammars and their better-off counterparts is closed during the course of their education. We know that disadvantaged children who go to grammars have a better chance of getting into university, including Russell Group universities, and that is because their attainment improves.
Education is at the heart of how we drive social mobility in our country, which is why the Government have had a programme of such radical reform over the past six years. The academies and free schools programme, which I noticed the shadow Secretary of State was not willing to support, has given schools the freedom to run themselves in the best interests of their children and local communities. The introduction of the EBacc has given more children access to a core curriculum to make sure that they keep their options open, not closed, as they make decisions about their future. Thanks to the hard work of teachers all over the country, 1.4 million more children are being taught in schools that are good or outstanding than in 2010. That means that 1.4 million more children are getting access to an education that will allow them to make the most of their talents.
Of course, this starts with early years education. Children must arrive at school ready and able to learn if they are to take full advantage of the education on offer, which is why we are introducing 30 hours of free childcare for the working parents of three and four-year-olds. It is also why we are looking at how we can improve the quality of the early years workforce even further. Teachers are crucial in improving attainment outcomes for our young people, which is why we are reforming initial teacher training.
Suella Fernandes (Fareham) (Con)
What does my right hon. Friend think about the independent study by ResPublica, commissioned by Knowsley Council, which concluded that in the second most deprived borough in the country, a grammar school would provide a much-needed incentive and raise the standards of education?
Justine Greening
I have seen that report. It shows that when people look at the evidence and are prepared to step away from political ideology, they see the reality that grammars can have a transformational impact in some of the most deprived communities in which we want to see the biggest changes.
Justine Greening
No, I will make some progress because I have given way to a lot of Members.
As I was saying, we want to improve teacher training. We have therefore started the teaching and leadership innovation fund so that the most challenged schools can build more capacity to have excellent teachers and leaders.
It is vital that the standards and quality of our technical education in this country mirror the excellence that we have been embedding in the academic routes. We have focused on academic routes, so it is time for us to focus similarly on improving technical education for young people. We will work hard to put technical and further education on a level footing with the academic route that other young people already take. Through the Technical and Further Education Bill, we are slimming down the system of qualifications and putting employers in the driving seat regarding how they are designed and delivered so that there are a smaller number of routes that are much easier to understand and lead directly to career pathways for young people.
We have also focused on apprenticeships so that young people get direct work experience as they learn. We plan to create 3 million new apprenticeships by 2020 and, for the first time, British business is investing through the apprenticeship levy to make sure that those apprenticeships are of a high quality. Yesterday, we had the Third Reading of the Higher Education and Research Bill, which will put in place a new teaching framework to drive up teaching quality, to make university outcomes more transparent than ever and, through the planned Office for Students, to promote equality of opportunity throughout our universities.
We have to recognise that one of the biggest challenges faced by the education system is the growing need for more good school places. Despite the progress that we have made, too many children still do not have a place at a good school. There are 1.2 million children in schools that Ofsted says are not good enough. That was why we published the “Schools that work for everyone” consultation, which asks important open questions about how we can use the educational expertise that exists in our country’s independent schools, faith schools, universities and selective schools. We cannot afford to leave a single stone unturned as we drive up opportunity.
Andy Burnham
The Secretary of State rightly spoke about building a consensus across the House on education policy, but I put it to her that that will be more likely to happen if the Government stick to their mandate on education. Will she read out the precise section of the Conservative party manifesto from the last election that gives her a mandate to lift the bar on the creation of new grammar schools?
Justine Greening
We talked about excellent school places and expanding the very best schools in our country, including grammar schools. I just do not think it is viable for the Labour party to say that it does not like the grammars that we have, but to be equivocal about whether it is still its policy to shut those grammars. I will give way to the hon. Member for Ashton-under-Lyne (Angela Rayner) if she wants to confirm the position. There is a gaping hole in the official Opposition’s policy on grammars. I do not think that it is tenable in a country that has grammars and selection for the Opposition to say they do not like that situation, but that they do not want us to take any steps whatever to see how we can deliver more strongly on social mobility through the schools already in place.
David T. C. Davies (Monmouth) (Con)
My right hon. Friend will surely be aware that we have had 18 years of Labour policies in Wales and, as a result, have lower education standards according to PISA, the OECD and Labour’s former education Minister in Wales. Does my right hon. Friend think we should take any notice whatever of what Labour has to say about education?
Justine Greening
No, I do not. The legacy of 13 years of Labour was disastrous for our youngest people, not just because of grade inflation, which gave millions of young people the sense that they had achieved grades although they were not at the level they needed to be, but—dare I say it—because under the previous Labour Government, youth unemployment went up by nearly 50%. If opportunity is about anything, it surely starts with the dignity of being able to have a job and a career.
Last week I was at Handsworth Grammar School, where around 25% of pupils are eligible for the deprivation element of the pupil premium. Those young people talked to me about how much they value the education they are getting. One student, who is planning to go to Oxford—[Interruption.] I am not sure precisely what that young man would say about the chattering from Opposition Members, but I think he would be extremely dismayed to hear the school that is giving him a transformational opportunity being talked down. His family had arrived in this country just two generations before. His grandparents arrived with nothing but the clothes on their backs. Within two generations of that, he is hoping to be able to go to Oxford. He talked to me about what the chance to go to a grammar school has meant for him, his family and his future prospects. It is levelling up, and that is what we want to do.
I hope that we all agree that the social mobility agenda is about more young people having opportunities and aiming higher, like that gentleman, not fewer. Asking in our consultation how we can make grammars more open to disadvantaged children is exactly what we should be doing.
Mark Pawsey (Rugby) (Con)
My right hon. Friend is speaking powerfully about the opportunities that grammar schools provide to children from very ordinary backgrounds. Does she agree that it is a real tragedy that we have not invested more in grammar schools? The existing ones in my constituency are under massive pressure from the children of parents living around my constituency, which restricts the number of places available for children in Rugby.
Justine Greening
My hon. Friend is right. It is simply untenable to say to parents who want more choice, and to children who otherwise would have a place in such schools, that they cannot have it. That is simply wrong. We should at least allow local communities to decide. It is not tenable to take the approach of simply saying to parents, “No, you can’t have them; we know better,” or of saying to a child, “You got the grades to be able to go, but you are not allowed to because we have decided.”
Several hon. Members rose—
Justine Greening
Let me make some more progress, as lots of Members on both sides of the House want to contribute to this important debate.
In the consultation we are asking how we can make grammars more open to disadvantaged children and ensure that the excellence that exists in grammar schools can play a stronger role in school improvement throughout the system, as that is also part of what we should be doing. We are also asking how, as has been seen elsewhere, grammars can play a role in lifting the schools around them and doing a stronger job. Many already work extremely hard to do that, and we want it to become the norm.
As we have just heard, selective and grammar schools are often hugely over-subscribed, so consulting on how we respond to that demand from parents and pupils is exactly what we should be doing. We cannot simply say that those parents and students are wrong. It is time to look at how we can use grammar schools to open up more opportunities to more people.
Grammars close the attainment gap between pupils from deprived backgrounds and their more advantaged peers. For the top-performing 25% of primary pupils, the gap in results for pupils on free school meals in grammar schools is significantly smaller than that in non-selective schools. Children in grammars on free school meals are twice as likely to get five good GCSE grades, and so twice as likely to secure a place at and to attend one of the top Russell Group universities, as their wealthier peers who attend comprehensives.
We will not fix the challenges of social mobility and opportunity by complaining; we have to take practical action. That is why at the very least we need to give local communities the choice. That is exactly what our consultation proposes and asks about. We have improved and are improving our school system and standards. Those communities that want to keep the status quo of their existing good and outstanding schools will be able to do so. There is much more to do, alongside the consultation, to ensure that every child has the education that they need and deserve.
We must recognise that some challenges that we face inside schools also require solutions outside schools. That is why I have announced the first six opportunity areas for parts of the country where social mobility is really stalling, but young people have huge potential that we want to unlock. We need to make sure that that happens.
Tom Pursglove
As a comprehensive-educated lad from Wellingborough, it is music to my ears to hear that the Government are committed not just to the academic but to the technical side of things, as that is so important. Does my right hon. Friend agree that it is also important to recognise in our education policy that different things work in different areas?
Justine Greening
That is quite right. The first six opportunity areas we picked are very different places— some coastal, some more rural and some more urban. That is because we recognise that those communities each face different challenges—sometimes slightly different; sometimes significantly so—in raising attainment. We know that we need to work not only inside schools with teachers and the headteachers leading those schools, but outside schools. We will have better careers advice and mentoring. We will work with the CBI, for example, and the Federation of Small Businesses on opportunities for work experience, traineeships and apprenticeships.
Wes Streeting
I am delighted that the Secretary of State has given way on that specific point because under the previous Labour Government the London Challenge achieved something very similar by doing exactly what she has described, alongside initiatives such as the education maintenance allowance, grants for the poorest students, a huge transformation of funding for teaching and school buildings, and freedoms for schools and teachers. Is she sure she has nothing to learn from that Government?
Justine Greening
I certainly do not think so in relation to the outcomes achieved for young people who left the education system having all too often taken exams that suffered from grade inflation and—critically, as we see from the report by Alison Wolf—having taken qualifications that employers simply did not value, but that those people had often been told to do because that was an easier route for the institution that they were in. There is lots to learn from that Labour Government, but clearly it is what not to do, rather than what to do.
Justine Greening
I will try to make some progress and finally conclude.
Opportunity areas are not simply about addressing the need for more good school places in all parts of the country. We want them to be in the vanguard of helping us to ensure that we learn how best to drive social mobility in very different places, to spread what works throughout England. Under this Government, further and higher education, schools and apprenticeships have been put back into one Department—the Department for Education. That means that we have never had a better chance to make sure that education, and opportunity as a whole, work to drive social mobility throughout our country.
Improving social mobility is our country’s greatest generational challenge. Its complexity means that change will not happen overnight—as I have said, no country has cracked how to drive great social mobility—but making the best possible success of Brexit, as this Government and this party are committed to doing, is why social mobility matters, and why education is at the heart of that agenda. In the end, it will be people who lift this great country of ours, which is why we have to make ours a country that works for everyone. The Prime Minister set out her intention and the intention of the Government. Now it is time for the House to do the same so that we can get on with ensuring that the education system becomes the driver of social mobility that it really can be. Young people get only one shot at their education, so we urgently need to get this right. That requires all of us to be prepared to work together so that, if at all possible, we can build a cross-party consensus on how we get it right.
Carol Monaghan (Glasgow North West) (SNP)
I begin by declaring an interest: I was a physics teacher and spent 20 years working in the comprehensive sector.
My father sat, and failed, the 11-plus exam. He ended up in the local secondary, St Roch’s, in an inner-city area of Glasgow. Pupils at St Roch’s were not expected to achieve. School was simply a holding area until they were old enough to enter the workforce. My dad set out on the path that was laid in front of him. Most of his classmates went on to work in the shipyards, but he went on to work in the Glasgow parks department, where he remained for over 40 years. He has some good memories, but work was simply something he did to provide for his family. There was no element of choice: you were grateful you had the job, and he was grateful.
By the time my siblings and I went to school, grammars had been completely abolished in Scotland. We also attended the local secondary, but now it was comprehensive and there were no preconceived ideas or restrictions placed upon us. My father watched with pride as one by one his five children went on to university—possible, of course, because we paid no fees and were awarded maintenance grants.
By coincidence, early in my career I taught in my father’s old school. It was, however, transformed. By now, St Roch’s was a comprehensive and a much happier place. The walls were a celebration of past pupils’ achievements—some academic, some business and some vocational—but the real difference was the expectation of achievement. Every young person entering the school was seen as a human being with potential and every young person felt the weight of that expectation. The real problem with selective education is not that we end up with good schools and poorer schools, and not that one set of teachers works harder than another; it is that whole swathes of our young people will be labelled—wrongly, of course—as having failed. With that, social mobility falls.
It might be argued that for those who have the intellectual maturity, or whose parents can pay for the tuition to pass the 11-plus exams, grammar schools offer a more sheltered experience, but the Government should be concerned with every single child. With grammar schools on the horizon, that is simply not the case.
Andy Burnham
Does the hon. Lady agree that the major flaw in the Secretary of State’s speech was that she could not bring herself to acknowledge that if she pursues this policy it will lead to the creation of more secondary modern schools? That is the truth that Government Members will not face up to.
Carol Monaghan
Absolutely. I actually think there was another flaw in the Secretary of State’s speech. Listening to her speaking in such glowing terms about grammar schools, I wondered why we do not just make every school a grammar. That would solve the problem.
Many secondary schools choose to set their pupils according to academic ability. However, the educational evidence for the benefits of setting is scant. Certainly when pupils are working on the same curricular content, the evidence is clear: mixed ability classes are far more successful in raising attainment. The most able pupils succeed in whatever class they are in. The least able pupils do a bit better in mixed ability. The massive advantage, however, is for the swathes of average attainers who, within a mixed ability class, have no ceiling placed on their ambitions. In fact, when the Government use one of their buzzwords, “aspiration”, it is indeed this large group of middle pupils who embody and can embrace that idea. Conversely, when decisions based on ability have been imposed on pupils, it sends out strong signals about what that particular group is expected to achieve. In other words, it is a self-fulfilling prophecy. Rolling this out on a much larger scale, as is being considered with the return to grammar schools, means that we have young people who have had decisions made on their future attainment before they even have a chance to attain.
The damage that that does cannot be underestimated. To be told at age 11 that you are not good enough is an incredibly difficult thing to overcome. Despite the best efforts of teachers, that labelling is a blow to confidence and self-esteem that can remain throughout a person’s life.
Chris Philp
Given what the hon. Lady has just said, will she join me in welcoming the Green Paper’s proposal to allow for transfers into and out of selective schools at ages 14 and 16, as well as 11?
Carol Monaghan
I would welcome very little of the Green Paper. I do not agree with selective schooling.
Mr Dominic Raab (Esher and Walton) (Con)
Does the hon. Lady think that eligibility to stay on at either a college or a sixth form based on the level of qualifications at GCSE should therefore also be abolished?
Carol Monaghan
I am not sure I understand the hon. Gentleman’s question. Students should be able to stay on in school as long as the school fits their requirements, and as long as the school is able to offer them something. That might not be what he asked, but I will move on.
I have received correspondence not from my constituents but from people living in England. They have shared their concerns about grammar schools. I will read out a section of a letter I received from a gentleman in England:
“As an 11+ failure…The sense of failure is still with me…so much so I find it hard in this letter to admit I went to a Secondary Modern School. Nearly all of my fellow pupils…came from poorer or deprived backgrounds—I cannot think of one who came from a well-off background. As children, we accepted our lot and it was made clear to us that our choices of work were limited after school…There was a small cohort of teachers who did their best for us despite (as I realise now) limited resources. However, the turnover of teachers was high, which did not bode well for continuity of education. There was no question of taking any exams for qualifications of any kind. University was unthinkable. Higher education…was closed off to us; we were in the rubbish bin.”
It is well known that young people’s thinking skills develop at different rates. Some at aged 11 will have advanced cognitive abilities. For others, it takes several more years for their thinking skills to mature. A number of years ago, I taught a young boy who had come from the primary school at age 11 with extremely poor literacy and numeracy skills. As time went on, however, he showed some talent for science. Despite all the original expectations placed upon him—not by teachers, but probably by the young boy himself—he managed to scrape by in his national exams and went on to university. He went on to achieve a degree in chemistry and then a PhD. He now travels the world as a chemical engineer. That is social mobility and it was achieved in a comprehensive school. That boy would not have come close to passing an 11-plus exam. I completely oppose selective education, which, thankfully, will not be introduced in Scotland.
Huw Merriman (Bexhill and Battle) (Con)
Is there not a tendency in this debate to send out a message that anybody who has gone to a secondary modern is failing? I went to a secondary modern school, as did the hon. Lady’s father, so I know how tough it can be, but we can succeed. Moreover, it is not a question of success or failure; it is about making the alternative schools as good as the grammar schools.
Carol Monaghan
I am extremely glad that the hon. Gentleman succeeded and made his way, but not every young person has the strength of character that he is displaying, so for many young people it causes major issues.
Huw Merriman
I made no point about whether I had succeeded or otherwise—many could argue, given I am here, that I have not succeeded—but we are in danger of going back to the past and seeing this as a question of either success or failure, when in fact it is possible to have a mix of schools and still see those who do not go to grammar schools thriving in successful schools. We should not talk that down in this House.
Carol Monaghan
We have swathes of teachers battling the labelling of these young people and working flat out to overcome the prejudices against them. It is not right that the Government should make life more difficult for them by continuing and, in fact, extending selective education.
I have a letter from a young person from High Wycombe. He writes:
“I currently attend a grammar school in High Wycombe… At the age of 10 I was put under a ridiculous amount of stress and felt at a disadvantage going into the 11+ as my family could only afford a fortnight of private tuition… The system makes 70% of kids feel second best”.
The social mobility agenda in Scotland is quite different. We are considering what positive steps we can take to increase social mobility, including the provision of 30 hours of early learning for all children, regardless of their parents’ work status. We also have the attainment fund, which I believe my hon. Friend the Member for Airdrie and Shotts (Neil Gray) will mention in his speech, and which has been used to target the attainment gap that exists in some areas.
John Redwood
Will the hon. Lady apologise to the excellent pupils and teachers in the comprehensives in my area who achieve great things alongside grammars, which can also recruit from my local area? She should not run those people down; they are doing a great job.
Carol Monaghan
As someone who attended and has taught in a comprehensive school, I think that these teachers and young people are doing some of the best jobs in the country—possibly far better than some in other situations.
There are some things that the Scottish Government have not done. They have not cut the education maintenance allowance, which allows young people from disadvantaged background to remain at school and achieve to their full potential, and maintenance grants are still available for our young people going to university. I want to give an example of something else that has succeeded in increasing social mobility. In Glasgow, there are areas of serious deprivation, and schools in these areas might have only one or two pupils planning on sitting the highest level of qualifications in Scotland—the advanced higher. It is unreasonable, or uneconomic, to run the course for one or two pupils, so these pupils—a group of 20 or 30 students—now come to Caledonian University, funded by the Scottish Government, the university and Glasgow City Council, to experience life on a university camps and to achieve their advanced higher qualifications. That is social mobility.
We support the Opposition motion. Social mobility definitely has to be increased, but grammar schools and austerity are not the way to do it. We have to start looking at what positive steps we can take.
Several hon. Members rose—
Mr Speaker
Order. On account of the level of demand, there is a requirement for the imposition of a time limit. We will begin with a six-minute limit on Back-Bench speeches.
Nicky Morgan (Loughborough) (Con)
All Members can agree that a first-class education is the greatest investment we as a country can make in our next generation. I have no doubt about the Secretary of State’s commitment to increasing social mobility, having heard her speak around the Cabinet table over the past few years. I think we can also all agree that post-Brexit it is more important than ever that all our young people leave education well skilled and well educated, particularly if we are to have a new immigration policy in the next few years.
We want excellent education everywhere. As I said at our party conference a couple of years ago, that “everywhere” is fundamental. What is missing from the Green Paper is that sense of a strong and consistent whole system. That might be because it only talks about schools, rather than some of the other issues facing our education system, such as the quality of teaching and the need for more great teachers and for announcements on fairer funding. That said, I was pleased to hear the Secretary of State talking about her commitment to the EBacc.
I should also recognise the Secretary of State’s announcements on opportunity areas. In the White Paper published earlier this year, we identified areas—the achieving excellence areas—that really needed attention, and last week the Social Mobility Commission picked that up. We have heard already about the ResPublica report on Knowsley commissioned by the Knowsley education commission, to which we should pay tribute for recognising the entrenched educational under-performance in its own area and the need to ensure that children and families have choice when it comes to schools.
For me, there are two tests for new schools policies. First, do they specifically tackle areas of underperformance? Secondly—this is at the heart of the debate on selection—is every child being offered an academic, knowledge-rich curriculum? I know that that knowledge-rich curriculum is also of fundamental importance to the Minister for School Standards.
We have to acknowledge that the Government’s Green Paper sets out the dangers of change in selective schools. Paragraph 4 on page 21states:
“while those children that attend selective schools enjoy a far greater chance of academic success, there is some evidence that children who attend non-selective schools in selective areas may not fare as well academically – both compared to local selective schools and comprehensives in non-selective areas.”
The Education Policy Institute published a report in September. It wrote:
“Analysis of educational performance across OECD countries has concluded that a higher proportion of academically selective schools is not associated with better performance of a school system overall, according to results in the international PISA tests taken by pupils at age 15 in 2012.”
I would like to hear more from the Minister about the evidence the Government are relying on in making the proposals in the Green Paper.
We talk about being a one nation Government, so our focus has to be on tackling those areas of the country where school underperformance is still entrenched, where families do not have a choice, where there are no good or outstanding schools and where the opportunity to travel outside the borough boundaries just does not exist. If the Government seriously believe that having more selective schools will raise standards across the board, they would have proposed introducing those schools only in pilot areas where there was underperformance, but the Green Paper talks about local demand being a driver. What if those areas most in need of higher standards opt out of having new schools? Given the inherent problems in the proposals, the Green Paper has to talk about mitigating measures.
My other concern is that the proposals will distract the Department and the Government from the issues really facing our education system. Let me again mention fair funding, which I know colleagues of all parties, and particularly on the Conservative side, take incredibly seriously as an issue that has to be sorted out.
The second test is whether we think all children can benefit from an excellent, academic, knowledge-rich curriculum, which I think is what our future workforce of the 21st-century needs. True social mobility requires that every child be given the same opportunity.
Andy Burnham
I am listening carefully to what the right hon. Lady is saying. Does she agree with me that this policy is a distraction, and that if we wanted to make the biggest difference to education in our country, we would do that by focusing on the 0 to 4 age group and ensuring that more children arrive in reception classes ready to learn, with the language and social skills that they need?
Nicky Morgan
The right hon. Gentleman is right in the sense that early education is, of course, critically important. One of the issues surrounding more selection is that the attainment gap is already wide by the time children get to the age of 11, and often even before they have reached primary school. The right hon. Gentleman has been a Secretary of State, and he knows that Departments can do more than one thing, so we can focus on early years at the same time as focusing on making sure that every child has an excellent academic education.
As I was saying, true social mobility requires every child to be given the same opportunity, and it is not for other people to make judgments about what children are entitled to. I will always remember my visit to a primary school in Lancashire, whose headteacher informed me that the children in her previous school, a city centre school, were only ever going to be assessed as “requires improvement”. If children are being written off by some even before they have reached the age of 11, that tells me that there is a problem and that it needs to be tackled first.
I will be honest: when it comes to knowing how to vote, I have struggled with both the motion and the amendment before us today. What is being proposed in the Green Paper was not in our manifesto. I really hope that Ministers will listen to the responses to the consultation and to what Members of all parties say today. Let me suggest that if the Government are determined to take forward these proposals, they must set out how the proposals will lift standards in the underperforming areas, and they must start with those underperforming areas.
Lucy Powell (Manchester Central) (Lab/Co-op)
It is a pleasure to follow the right hon. Member for Loughborough (Nicky Morgan). She and I have disagreed many times in the past, but I agree with much of what she has just outlined, and I hope that her successor is listening carefully to what she had to say. We do not have long so I shall try to canter through some of the issues as best I can.
Before we get into the meat of the debate, it is important to clarify what we all mean by social mobility. Too often in this debate, we talk about plucking the lucky few from the most disadvantaged to the very top, but that is not what the policy on social mobility needs to address. It is about economic and social progress for the many, not just for the lucky few. It is about making the distance between the rungs on the ladder shorter and pulling up the bottom rung altogether.
The challenges that we face in order to achieve that are, as many have said, deep seated and manifold, but they are particularly important in the world of work of today and tomorrow. Automation and digitalisation and the hollowing out of the low-skilled and many skilled jobs will mean that, for example, by 2022 there will be 9 million low-skilled people going after 4 million jobs, with a 3 million shortfall to fill the 15 million high-skilled jobs that will be available in that economy of the future. Those are the big challenges that our country faces today. The educational landscape needs to address those challenges, not hark back to the challenges of the ’50s and ’60s and the very different economy that obtained then by comparison with today. We thus need a coherent, whole and big bold strategy for tackling social mobility and narrowing the gap in educational disadvantage. As successive Governments have sought to do that, they have found that it is about dealing with the long tail of under-achievement—not, as this Government seem hell-bent on doing, creating an even more elite education for the already elite.
I see the Secretary of State shaking her head, so let me tell her that the Government could start by adopting in full the recommendations of her own Social Mobility Commission report, published just last week. If she did, she would get widespread cross-party support. There are three key areas set out in that report. I fully agree with them, and they have already been mentioned.
The first is about quality in the early years. I am afraid that when it comes to the early years, we are yet again seeing the Government not understand the policy question that they are being asked. Yes, they are putting more money into childcare—something that I very much welcome—but there are two reasons for investing in the early years: the first is to enable parents to get back into the labour market, and the second is to narrow the educational attainment gap that already exists for many by the age of five. To narrow that gap, we must have an absolute focus on quality, which must be available for the most disadvantaged children, not just for a few. The Government could be spending their money much more wisely in this area by driving up quality across the board.
We need a clear agenda as we go forwards, but I am afraid that many things have been going backwards under this Government. We need more support for parents through the Sure Start programme. We need quality provision most of all in the most disadvantaged areas, as we see with our maintained nursery schools and many classes in primary school, which are all under threat as a result of the new funding formula. We are seeing a levelling down, not a levelling up when it comes to quality in the early years. We could use the early years pupil premium much better. I say to the Secretary of State that she should leverage the extra money she is putting in to ensure that quality is at the heart of her strategy. All we hear about are working families and childcare, but that is not what the social mobility debate is about.
We need a pool of talented teachers everywhere, as we saw in the London Challenge, which was a fantastic achievement of the last Government. We need to see it rolled out to places such as Knowsley and the 10 most disadvantaged areas across the country—but that is not what is happening. Grammar schools will exacerbate the problems of getting quality teachers in the areas that need them most.
Sammy Wilson (East Antrim) (DUP)
Does the hon. Lady not notice the irony in mentioning Knowsley, where the Labour council’s own report said that the introduction of grammar schools would be transformative, especially for the working-class boys who were under-achieving?
Lucy Powell
That was not a recommendation that the council took on board. What we need is to get the quality teachers into the right areas. We know what works—we know it worked in London—and we need to see the London Challenge rolled out to the 10 worst areas where we know that most disadvantaged children are not getting the schooling they need. There is much more we can do in the post-16 area as well, as the Social Mobility Commission also said.
Let me deal finally with grammar schools. Let us quickly remind ourselves of the evidence. The OECD found that selective countries do less well than those that are non-selective. In England, the highest attainment gaps are in selective boroughs, yet the highest performing local authorities are comprehensive. In Kent, 27% of free school meal children get five A to C grades, whereas in London it is 45%. The tiny number of free school meal children who attend grammar schools is not comparable with the tens of thousands of free school meal children elsewhere. There are just 3,000 of them.
David Willetts described grammar schools as
“an arms race of private tuition for rich parents”.
The inequalities that we have described get greater and greater in this system. That is why the chief inspector of schools, the Fair Education Alliance, the Social Mobility Commission, the Education Policy Institute, the Sutton Trust, the headteachers’ unions, all the heads in Surrey, Ruth Davidson and many Conservative Members are all opposed to the reintroduction of grammar schools. If the Secretary of State wants proper cross-party agreement on driving up social mobility, she should take forward her own Government’s report every step of the way and agree with its recommendations on grammar schools. If she did, she would get a consensus in this House.
John Redwood (Wokingham) (Con)
There is a happy consensus well hidden in this debate. All parties in the House believe that education is of huge importance, and we all want the best possible education for every child in our country. We also accept that the state has the main obligation, because most children will need state finance and state support to secure that great education.
I pay tribute to Ministers for the fact that 1.4 million children are now being educated in good and outstanding schools. There is proof that work by successive Ministers, and, more important, by an army of heads and other teachers in state schools, is delivering better education throughout the country. However, there is still much more to do, and I hope that all the Labour Members who are so critical of current educational achievement in their own areas will work positively with their schools and local education authorities to try to achieve that better performance.
I was pleased to hear the shadow Secretary of State say that she wanted to look at the evidence, but she rather spoilt that by revealing that, although she has made grammar schools her “big thing” and tabled this motion, she has not actually visited any grammar schools since taking on the job. I think that it would have been a courtesy to the grammar schools that she is attacking to visit one or two of them before mounting her challenge today.
The Opposition’s argument is that selection is wrong because we may not select all the talented people at the age of choice, and that it is therefore unfair to give the advantage to those who are selected. Again, however, there is huge humbug on the Opposition Benches. When I asked the shadow Secretary of State whether she was upset by the fact that our elite sportspeople are usually selected at quite a young age for special training and special education, and that they are expected to achieve to a much higher level than the average and are given training and made to do extra work in order to do so, she did not seem to be at all upset.
Andy Burnham
That is a completely useless analogy. Education is about life. It is about the skills that people need to get through life—the basic literacy and numeracy. Sport is not about the entirety of life. That is why education is different, and that is why it is wrong for any child to be labelled second class at the age of 11.
John Redwood
The right hon. Gentleman simply does not understand. If a young person from a poor background becomes a top footballer, that is a transformational event in their life, and good luck to them. Why do the Opposition not understand that exactly the same arguments apply to art, ballet and music? We take the children who we think are going to be the most talented musicians, at quite a young age, and we give them elite special training so that they can play to the highest standards in the world.
Stella Creasy (Walthamstow) (Lab/Co-op)
I am glad that the right hon. Gentleman has mentioned football. The fact is that 13% of our national football team went to private schools, which is twice the national percentage of children who go to private schools. Does the right hon. Gentleman think that that might account for the performance of our national football team, and that we might be missing out on the talent that exists in the comprehensive sector? Does he not recognise that that is precisely the problem that we are discussing today? We are missing out on talent as a result of too narrow a focus.
John Redwood
I do not think that we will get a better team by training them less, and no longer giving them any kind of elite education. I think that Opposition Members are being very obtuse.
Let me try a different argument. The Opposition’s second argument against grammar schools is that in Buckinghamshire and Berkshire, where we have some good grammar schools, all the other schools must be suffering. Opposition Members write off and write down the many excellent comprehensive schools in areas that have access to grammar school places, in a quite unrealistic and unpleasant way.
I know my own area better than Buckinghamshire. We do not have any grammar schools in my constituency, but there are two excellent grammar schools just over the border in Reading, a girls’ school and a boys’ school, which take some of our brightest and academically most gifted pupils from the Wokingham area. Our comprehensive schools in Wokingham also contain great, academically gifted children. Those children, at the top of those schools, do not have to compete with the children at the grammar, and they go on to compete very successfully and get good places at elite universities. Opposition Members should not write off those schools, or pretend that they are some kind of failed secondary modern.
I am glad that my hon. Friend the Member for Bexhill and Battle (Huw Merriman) reminded us that there are some very good secondary modern schools whose pupils achieve great things. My hon. Friend himself achieved great things before coming to the House, and some will consider it a great achievement that he is in the House now. I think that that shows that no one should write off any whole category of school. As an Opposition Member pointed out in a more honest moment, what really matters in a school is the talent of the teaching force and the good will and working spirit of the pupils. The two play off each other. That can be found in a good comprehensive, and it can be found in a good grammar school.
The Opposition must understand that we are not trying to create a series of schools for failures. We want to have great schools for everyone. We believe that selecting some pupils on the basis of academic ability and giving them elite academic training can make sense for them, but it does not write off the other schools.
Ian Austin
I am not at all opposed to giving the brightest pupils an elite education. That is not why I am worried about grammar schools. I am worried about grammar schools because they do not solve the central problems that our education system faces. Michael Wilshaw has said that we have “a mediocre education system”. When it comes to the vast majority of pupils, we are falling behind out international competitors. In a modern economy in which the innovation sector is creating jobs at 30 times the rate of the rest of the economy, we need to exploit the talents of all our young people. That is why I am worried about grammar schools.
John Redwood
I opened my speech with exactly that comment. I think that that is common ground. However, selecting some people who are good at football or good at academic subjects does not prevent us from providing a good education for everyone else. If we want to have more Nobel prize winners in the future, we should bear in mind that they are likely to be attending the great universities in our country. Do we not want to feed those great universities with the best possible talent from our schooling system, and should not those talented people have been given an education that stretches them and takes them further along the road to great work before they reach the universities? The most successful people at university have often had an extremely good education beforehand. They are self-starters, and understand the importance of that.
John Redwood
I do not have time, and many other Members wish to speak.
We need to get the maximum number of talented pupils through at the highest possible level, so that they can achieve even greater things at the elite universities.
That brings me to my next problem with the Opposition’s arguments: they completely ignore the fee-paying schools. Some fee-paying schools in our country achieve enormous success academically. They have a double privilege, because they select bright pupils who also have rich family backgrounds. When the two are put together, the combination is explosively successful.
I do not begrudge people a great education if they come from a rich background. I did not come from a rich background myself, but I am grateful for the fact that those people can have a great education, and it is even better that they pay for it themselves as well as paying their taxes. I am not jealous. It must be a great problem to be against all kinds of elite education when we have those great schools with their double advantage. However, a grammar school gives people who are bright but did not come from a rich background an opportunity to compete better against the phenomenally successful elite schools in the public sector. As was rightly pointed out by the hon. Member for Walthamstow (Stella Creasy), some of our public schools dominate not only academically, but in the sporting world and in other worlds as well, which shows that their combination of resource and selection is very powerful. Surely we need more centres of excellence to which people can gain access without having rich parents.
I find it deeply disappointing that Opposition Front Benchers, having called a debate on this important subject, cannot confirm or deny that they wish to abolish the grammar schools that we have. I have one little tip for the Opposition. I was in opposition for all too many years, and I remember how difficult it was, but, as a shadow spokesman, I always found it helpful to work out my party’s position before challenging the Government on theirs. I needed to make sure that my party’s position on the topic for which I was responsible was sensible and also likely to be popular. I think that the Opposition have failed both tests today. It sounds as if the shadow Secretary of State wants to abolish the grammar schools, but does not have the courage to say so.
Let me issue a plea to the House. I ask Members to get behind the excellent grammar schools that we have, and to get behind the excellent comprehensives that we have. I ask them to understand that where comprehensives and grammars coexist, the comprehensives can do very well, and can achieve great things with their pupils. We do not have enough great schools, so let us not cripple those that we have. I certainly do not want to live in a world in which one has to be rich to go to an elite academy.
Mr Pat McFadden (Wolverhampton South East) (Lab)
Today’s debate is about how to ensure that every child, no matter what their background, is able to make the most of their life. As the world changes and the labour market changes, that becomes more important than ever.
Good education is the best possible route to opportunity. It is the liberator from circumstance, the opener of minds, the means by which children can change the course of their lives. Its value and power is not only for individuals; it is for the country as a whole. A well-educated country is a country better equipped to succeed in the modern world. It is not just about 11 players; it is about tens of millions of people. A country that neglects education does itself harm. It not only cuts off opportunity for individuals and leaves talent undiscovered and unnourished; it also disarms itself in the mission to make our country the best it can possibly be—so the stakes could not be higher.
There has been some progress. Last week’s Social Mobility Commission report pointed out that disadvantaged young people are 30% more likely to go to university now than many years ago, but despite this progress we still have a long way to go before we can say we have succeeded in our mission. Too many children still do not get the life chances they expect. Too many children are still held back by lack of ambition, and by the view that their background dictates that they could never make it. Too much discussion about the issue begins with the awful defeatist phrase, “These kids.” I believe these kids can achieve anything; I believe that children from any background can achieve as much as those from a better-off background given the chance and the platform. When that does not happen, we have lives unfulfilled, jobs which people cannot take up, resentment at feeling closed off from how the world is changing, and a country which is not making the most of its people.
It need not be like that; we have the power to change it, and in some cases people are already doing so. In my constituency, Holy Trinity primary school, Bilston, ranks among the top 10% of primary schools in England for work with disadvantaged children and is rated outstanding. Its Ofsted report speaks of a school where:
“School leaders and governors are relentlessly focused on securing the very best for their pupils”,
and where,
“from the moment they start in the nursery, children achieve exceptionally well, and this continues throughout the school.”
and all of this is done in a school where the percentage of pupils receiving the pupil premium is twice the national average and where about half the pupils are white British and half a diverse mix of other cultures.
Holy Trinity achieves this because of the fantastic leadership of its head teacher, Carroll McNally, great stewardship from its governors and a refusal to accept anything other than excellence in everything it does. It is an island of excellence, and we have other islands of excellence too, but for all pupils to achieve an excellent education we do not just need islands of excellence; we need a system of excellence, where the kind of performance we see at Holy Trinity and other schools like it runs right through the whole school system.
Do we have that? I am afraid we do not. In July of this year west midlands MPs received a letter from the regional director of Ofsted about the condition of secondary schools in the black country. It expressed concerns about “low standards and weaknesses” in the quality of provision for secondary-aged pupils in all four black country boroughs. The letter said pupils’ achievement by the age of 16 is poor in comparison with pupils elsewhere in the west midlands and nationally; secondary schools are too often failing to build on the success of pupils in primary schools; the gap between the GCSE attainment of disadvantaged pupils and their better-off peers is wide; and not enough has been done to address these failings over the years. I am pleased to say Wolverhampton has been improving fast, and is the fourth most improved authority in the country, but that is from a low base and there is still a long way to go.
I commend my hon. Friend the Member for Dudley North (Ian Austin), who has convened a meeting between black country MPs and the regional director for a few weeks’ time, and I hope this letter is a rallying call for everyone concerned with local education and everyone in a position of leadership to ask what we can do to improve the picture and create a system of excellence, not just islands of excellence.
We cannot be satisfied with the status quo; we ought to be passionate about changing it. The easiest thing in the world in politics is to be a megaphone for anger, but real leadership is not just about amplifying disaffection; it is about giving people a chance, not a grievance. An extension of grammar schools will not do that, but an improvement in all-ability schools for all children has a real chance of doing so.
Mr Graham Brady (Altrincham and Sale West) (Con)
I am pleased to follow the right hon. Member for Wolverhampton South East (Mr McFadden); I agreed with nearly everything he said until his last line.
I am particularly grateful for having the opportunity to speak in this debate given the inability of the shadow Secretary of State to answer the question put by my hon. Friend the Member for Corby (Tom Pursglove) as to whether a future Labour Government would close existing grammar schools, which is a matter of immense importance to me and my constituents, and those of the hon. Member for Wythenshawe and Sale East (Mike Kane), who is sitting next to the shadow Secretary of State on the Opposition Front Bench. I hope we will have an answer to that important question before the end of this debate.
Fundamentally this debate is about social mobility, of course, but it is also about who we believe should make choices in our society: do we believe the men in Whitehall and we in this House should be directing what is available for our constituents, or should we be listening to what they want? Wherever we have selection in our country—my constituents in the borough of Trafford are perhaps the best performing in the country—that system is immensely popular with parents. It is hard to find significant numbers of people who would like to change it because it works so well.
Sammy Wilson
Northern Ireland has nearly a quarter of the grammar schools in the whole of the United Kingdom, and its academic results are the best of all the areas in the United Kingdom. Does the hon. Gentleman agree that that reinforces his argument?
Mr Brady
I am delighted the hon. Gentleman raised that, and if I have time I will return to some of the excellent results from Northern Ireland later in my remarks.
There are those in this House who think that it is all right to have a choice of school or type of school for those who can afford to pay fees for it, and there are those who think that it is all right to have a choice of school for those who can afford to buy a house in an expensive catchment area. It is instructive to look at the results of that approach. In the borough of Trafford, which has excellent state education, only 5.2% of pupils go to independent schools; for Manchester the figure is 6.7%, and for Stockport it is 10.1%. However, although we are told that in London state education has been revolutionised, in Camden 29.8% of pupils go to independent schools. We should open up opportunity to people regardless of their ability to pay, and that is exactly what we do in those areas that offer selection in the state sector.
Trafford is outstanding not just because of its seven grammar schools, but because of the outstanding quality of its high schools. The persistent myth from the 1950s and ’60s that if we have grammar schools, we have sink schools is an utter nonsense and should be rejected. Knowsley and the report produced for it have been mentioned, including by my right hon. Friend the Member for Loughborough (Nicky Morgan), the former Secretary of State. What has not been mentioned is that one of the so-called secondary modern schools in my constituency—we call them high schools—Ashton-on-Mersey, which spawned The Dean Trust, a very good, effective multi-academy trust, is so good that it has been brought into Knowsley, which was looking for excellence from outside the authority. It is to the high schools in Trafford that people turn, which gives the lie to the nonsense about low attainment in such schools.
We should also reflect on some of the damning evidence about the degree of social segregation elsewhere in the system. The record of the last Labour Government was mentioned earlier. In 2010 the Sutton Trust looked at the 100 most socially selective schools in the country, and 91 of them were comprehensives, selecting by catchment—by postcode, and therefore the ability to buy a house in the catchment area.
Nicky Morgan
I pay tribute to my hon. Friend, who I know is a passionate advocate of grammar schools based on the experience of his constituency. One issue that has not been raised in the debate so far is that of ethnic segregation. Will he acknowledge that white British pupils make up 70.9% of all secondary-age pupils but only 65.9% of secondary-age pupils in selective schools? One of the arguments being made is that white working-class boys would benefit from more selection. Does he agree that that is not necessarily the case?
Mr Brady
I am grateful to my right hon. Friend for her intervention. Actually, those numbers are rising fast. An answer to a written parliamentary question that I tabled recently provided evidence that every single ethnic minority group, including white British, performs better in partially selective areas than in comprehensive areas and better still in wholly selective areas than in partially selective areas.
Mr Brady
I cannot, because I have used up my time for interventions.
If we look at A-level results, we see that eight of the top 10 local authorities are selective or partially selective. In Trafford, 35.8% achieve top A-level grades. GCSE results show that the national average for those achieving five or more GCSEs including maths at grades A* to C is 52.8%. However, seven of the 10 top-achieving authorities are selective or part-selective. I am not talking about grammar schools; I am talking about whole local education authority areas. This year in Trafford, 70.8% of pupils will get five or more A* to C grade GCSEs, with 75% getting those grades in subjects including English and maths.
Mr Brady
I will come to primary schools in a moment.
In Trafford, the participation level in higher education is 72%, and if we look at those going to the top third of higher education institutions, we see that nine of the top 10 authorities involved are selective or part-selective. When we look at students going to Russell Group universities, we see that seven of the top 10 authorities involved are selective or part-selective. As the hon. Gentleman will know, Trafford is the only authority in the top 20 to be located in the north or the midlands. Opposition Members who represent constituencies in the north or the midlands and who want to see more opportunities for their constituents would be wise to pay close attention to that statistic. He mentioned primary schools. The culture of aspiration runs deep in Trafford, and nine of the top 250 primary schools published in the Parent Power list in The Sunday Times are in Trafford. The second one in the list is Park Road Primary School in my constituency, which I am obviously delighted to be able to congratulate on its achievement.
The hon. Member for East Antrim (Sammy Wilson) asked about Northern Ireland, whose education system has been wholly selective for a very long time. If we look at the performance of the most effective selective systems there, we see that the percentage of children eligible for free school meals who achieve five or more A* to C grades at GCSE is 70%, compared with 45.6% for England. Northern Ireland’s figure is dramatically better. The figure for those in England achieving those grades in subjects including English and maths is 33%, as against 45% in Northern Ireland.
We need to look at how we can expand real choice, and expand the number of good schools of all sorts, as my right hon. Friend the Member for Loughborough said. We can no longer tolerate a situation where people are allowed a choice of good schools that can transform life chances only if they are rich enough to pay the fees or to buy a house in the catchment area of one of the top comprehensive schools.
Simon Danczuk (Rochdale) (Ind)
It is a pleasure to follow the hon. Member for Altrincham and Sale West (Mr Brady). I am also pleased that my hon. Friend the Member for Ashton-under-Lyne (Angela Rayner) initiated this important debate. She made an excellent speech. I am sure that the whole House will agree that education is the most powerful engine for social mobility that there is. It broadens horizons and opens doors, and it should be accessible to all. There is nothing more inspiring or transformative than people increasing their knowledge, realising their potential and changing their life circumstances. I owe my grandmother a debt of gratitude for pushing me to do well at night school and giving me a lifelong love of reading. Education later in life gave me the opportunities that changed my life, and I want others to have those same chances.
However, the Government’s Social Mobility Commission’s “State of the Nation” report shows that the engine is spluttering rather than firing on all cylinders. It concludes:
“The rungs on the social mobility ladder are growing further apart.”
Those words should be a call for action, yet the Government appear to offer only words. The action that we need should not be to fall back on the failed prescriptions of the past, such as trying to revive grammar schools. We need a future-facing overhaul to bridge the gap between education and employment. The traditional world of work is rapidly changing, but much of our curriculum hopelessly lags behind the pace of change.
If education is to be a powerhouse of social mobility, it needs to work in tandem with the demands of the modern economy. The Government seem to recognise that fact only in fits and starts. They launched a half-baked “year of code” initiative, which rightly drew a great deal of criticism, not least because its executive director did not even know how to code. Advisers were quitting, saying that they wanted nothing to do with it, and the Government have gone scurrying back to their comfort zone of 1950s Britain where privileged children learned Latin and grammar schools were the great hope. That is where we are now, and it is just not good enough. There is a wealth of evidence to highlight how ill prepared we are. An “Unleashing Entrepreneurs” study by OnePoll reveals that a lack of digital skills—or “digital poverty”—is causing the failure of far too many UK start-ups. But it is not just vital tech skills that we are failing to equip our children with. Failure to meet engineering skills demand is costing the United Kingdom £27 billion a year, according to Engineering UK.
The gap between the new world of work and education continues to widen. We need to start narrowing the gap between education and employers. A survey by the Gatsby Foundation found that in only 40% of schools did a young person have an encounter with an employer at least once a year from year 7 onwards. We can do better than that, and Labour—the party of work—recognises that education cannot exist in a vacuum. Unless education adapts to the changing employment landscape, we will be setting our children up to fail. With recent research by Oxford University and Deloitte suggesting that 850,000 public sector jobs could be lost to automation by 2030, it is clear that we should be preparing now for a brave new world. Let us hope that the Chancellor is able to rise to this challenge in the autumn statement and kick-start a vision of social mobility. If the Government do not act, those who are just about managing now—the JAMs—will soon become the LOTS: those who are left on the scrapheap.
If any vision of social mobility is to have a chance of putting down roots and being seen as credible, Parliament will need to start being seen as a proper, living example of social mobility. We have seen the reaction in America to the Clintons and the Bushes as the American dream of social mobility has withered away. People want their Governments to get real and to create a genuine stakeholder society where everyone has a chance to get on. In Britain, they want the British promise that hard work will be rewarded to mean something again. That is now the challenge for this Government.
Several hon. Members rose—
Mr Speaker
Order. I am sorry, but the time limit on Back-Bench speeches must now be reduced to five minutes with immediate effect.
Chris Philp (Croydon South) (Con)
It is a particular pleasure for me to speak in this debate, having attended a south London grammar school myself. I can say from personal experience that I would not be here were it not for that grammar school, so I feel an obligation to other youngsters growing up in south London who are from ordinary backgrounds such as mine to speak up when the opportunity arises.
I echo many of the things said by my hon. Friend the Member for Altrincham and Sale West (Mr Brady), in particular by highlighting the terrible unfairness in the system. The only way to be sure of an outstanding education is often to pay for it, either by going private, or by buying a much more expensive house in the catchment area of a good school. It is a disgrace that the only way to be certain of an academically elite education today is by paying for it.
I want to respond to a question that the hon. Member for Ilford North (Wes Streeting), my colleague on the Treasury Committee, posed to the Secretary of State. He asked for evidence that children from ordinary backgrounds do better in grammar schools. He asked for one piece of evidence, but I will give him two. First, in areas where at least 10% of pupils are selected, the GCSE grades of free school meal kids are seven notches better than those of equivalent children in non-selective schools. That is a seven-grade boost. Secondly, white male children—I think the previous Secretary of State mentioned them—who go to grammar schools have a 30% higher chance of going to university than those who do not.
Lucy Powell
Parents and teachers following this debate will have heard a Government Member say that the only way to guarantee an excellent education is to pay for it. The hon. Gentleman is rubbishing our excellent education system. The fact of the matter is that, yes, many parents want to select their children’s education socially, but if we flip the issue and look at the situation for free school meal children, the hon. Gentleman will find that progress in the comprehensive system massively exceeds that in the private sector.
Chris Philp
It is clear in my area of Croydon that parents who want a particular kind of academic education have to travel out of the borough to either Bromley or Sutton because the kind of education that they want for their children is not available. That leads me on to my next point about parental choice. If parents want a particular kind of education for their children, it is not for this House to deny them that choice on ideological grounds. We should be enabling choice.
By the way, no Government Member is suggesting a return to the system under the Education Act 1944. No one is proposing the reintroduction of secondary moderns. We propose a diverse system with a whole range of schools with different specialisms. We already have many different kinds of academies and free schools, and grammar schools have a place in that diverse system along with other types of school. Parents can then exercise choice over which school works for them. It is clear that when free school meal children go to grammar schools, they do significantly better than if they do not.
Wes Streeting
I am grateful to my Treasury Committee colleague for giving way. Part of the explanation for his last point is that, given the very nature of academic selection, the higher-attaining pupils from the poorest backgrounds attend those schools. The evidence base as a whole shows that if a pupil from a deprived background goes to a grammar school, they are less likely to do as well as their better-off counterparts, and the impact on the system as a whole is not positive. That is why every leading educational expert says that this is a bad policy.
Chris Philp
I refer my Treasury Committee colleague to the Education Policy Institute report that was published in September—it is quite recent, so perhaps he has not had a chance to read it—that found that the seven-grade advantage adjusts for prior academic attainment. Therefore, with the same level of attainment, a child on free school meals does better in a grammar school than they would if they went to a non-grammar school.
I have heard two objections to grammar schools from Opposition Members. There are two reasonable objections that one might make, so it is only fair to acknowledge them and try to respond. The first objection is that only 3% of grammar school pupils are on free school meals, whereas the figure for the population as a whole is 13%. It is reasonable for Members on both sides of the House to draw attention to that deficiency and to question it, but my answer to that challenge is that, by being inventive and creative, it is possible to increase that percentage radically. There is a fantastic example from the Schools of King Edward VI in Birmingham, which has increased its free school meal intake from 3% or 4% up to more than 20%, which is above the national average. That has been achieved through a series of innovative measures, including active outreach to primary schools in deprived areas, free help with tests for children from deprived families—one problem is that middle-class parents pay for coaching for their children—and bursaries for parents who are worried about the costs of uniforms, musical instruments or extra travel. By doing those things, the group has transformed its free school meal intake.
Nicky Morgan
My hon. Friend will be aware of the evidence given by Rebecca Allen of Datalab to the Education Committee that shows the negative impact on other grammar schools in that local area: they have lost more of their free school meal children. I think he needs to argue for an increase in the overall number of free school meal children if he wants his policies to work.
Chris Philp
I am arguing that grammar schools should do outreach, like those in the King Edward VI group, and ensure that the figure increases from 3% so that children from deprived backgrounds can get in and genuinely do well, which is not happening as much as it should. Wallington County Grammar School in my next-door borough of Sutton uses a slightly lower test threshold for free school meal children and has dramatically increased its intake from that group. I was happy to read on page 25 of the Green Paper that a number of the things that have worked in schools such as Wallington and those in the King Edward VI group will be conditions when existing grammar schools expand or new grammar schools open. By attaching those conditions, the Government will address the reasonable concerns that have been raised by Members on both sides of the House.
The second objection, to which the former Secretary of State just alluded, is that non-selective schools do worse in selective areas because the selective schools have in some way creamed off the best pupils. There is no clear evidence for that. There are reports from both sides giving both points of view. In 2008, the Sutton Trust found no such effect; another study found an extremely marginal effect. We have already heard—[Interruption.]
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. We will not have sedentary interventions and the waving around of documents. It is simply not done in here.
Chris Philp
Thank you for defending me so valiantly, Madam Deputy Speaker.
We heard from my hon. Friend the Member for Altrincham and Sale West how Northern Ireland is an excellent case study of where the entire education system, not just grammar school pupils, has done well. In conclusion, with the reforms in the Green Paper, the system can work and help children from deprived backgrounds to fulfil their potential.
Judith Cummins (Bradford South) (Lab)
I am grateful for the opportunity to speak in this important but, sadly, repetitive debate. I say that because this issue rears its head every time we have a Conservative Government. Just what is the Conservative party’s fascination with grammar schools? When it comes to social mobility, the Conservative’s response seems to be to resort to dogma. The return to grammar schools embodies retrograde thinking and a return to a system that benefits only a select few—if anyone at all. There is no evidence, no justification and no basis for the belief that selective education leads to improved social mobility. The House does not have to take my word for it; the Government’s own advisory body on social mobility, the Social Mobility Commission, says that grammar schools do not work.
Education is the single most important tool available to each and every Government to improve social mobility in this country. It is sad that this Government’s fascination with selective education means that any genuine dialogue about how we can improve social mobility is lost in the noise of Tory MPs calling for the reintroduction of grammar schools. This debate is repeated time and again with the same conclusion: grammar schools do not work. There is no easy way to improve social mobility in this country and anyone who believes otherwise is sadly deluded. Social mobility can be improved only through a tide of political will, a slate of complex interventions and, most importantly, through unwavering investment over the long term, not just in one Parliament.
I am proud that such political will existed under the previous Labour Government; what followed was funding to help all children, not just the select few who are educated in our private school system, to realise their potential. Under a Labour Government, school budgets increased year on year. Under this Government, according to forecasts by the Institute for Fiscal Studies, school budgets will fall in real terms by 8% in this Parliament. Under a Labour Government, education maintenance allowance was introduced to help children from low-income families to continue in further education, whereas under the Conservative party EMA has been scrapped, the further education sector has faced real-terms cuts of 14%, and maintenance grants in the higher education sector are set to be scrapped. That is a recipe for a social mobility disaster, undermining all the progress made in recent years to raise aspiration and improve life chances. At this time, my constituency needs more help, more investment and more long-term planning, not less.
In 2010-11, which was the last year of EMA, there were more than 8,000 recipients of it in the Bradford district. At that time, my constituency was ranked 64th nationally on the index of multiple deprivation. By 2015, however, Bradford South’s position had worsened to 41st, which points to an increase in need and suggests that even more young people would have benefited from EMA. As I have told the House before, my constituency ranks 609th out of 650 for the percentage of individuals with level 4 qualifications or above. Furthermore, when it comes to the percentage of individuals without any qualifications, Bradford South is 74th in our league tables. Having a grammar school will not change that.
The Government should take a step back, reflect on their record in government—their flawed plans and inadequate investment—and do the right thing: end their fascination with grammar schools; summon the political will to back a slate of complex interventions; and, most importantly, commit to investment over the long term.
Mr Dominic Raab (Esher and Walton) (Con)
I welcome the debate, in which there appears to be wide agreement about the stagnant state of social mobility in the UK but less agreement on the right way to revive it. We have an elephant in the room in this debate: the deep philosophical differences between those inspired by a meritocratic vision of society and those who take the egalitarian view. That situation is perfectly healthy and respectable. Of course people who take the egalitarian view will find the idea of meritocracy very hard to reconcile with their world view. That is lurking, and some Labour Members ought to be a bit more honest about it. People hold other objections, which I also recognise. I support the meritocratic vision of fairness, not only on moral grounds but because it can, unlike the egalitarian mirage, reinforce, not paralyse, a healthy, vibrant and competitive economy which creates the jobs, wages and tax revenue for our precious public services.
I wish to discuss the evidence on selection, because there is strong evidence in favour of it—if it is done in the right way. We see that in the existing selection we have within schools; in the independent sector; at 16, when pupils want to stay on to do A-levels; and when students go to university. The motion says there is “no evidence” that selection—or any further selection—will improve social mobility, but this is clearly still a contentious issue. I am not saying it is cut and dried, but there is compelling evidence in favour of selection here: the review conducted by Sir Chris Woodhead, the former chief inspector of schools in 2009; and the evidence I heard in 2013 from Andreas Schleicher when I was serving on the Education Committee. He did not give an unequivocal view one way or another, but he did say that there was evidence that supported selection, provided admissions were done on a clear and objective basis and there were opportunities for selection later on.
The Opposition motion is therefore clearly flawed, but I accept that an expansion of grammars needs to be done in the right way, with tests that are fair and objective, minimising the scope for coaching, and with grammars schools expanded beyond a middle-class preserve. There is a strong case for making sure that the first tranche are in urban or rural areas with high levels of deprivation and low educational standards, both to create a ladder of opportunity for bright kids from the council estate or the rural backwater, and to have a beacon of educational excellence in those schools.
There is a reasonable question as to the age at which selection should take place. I certainly agree with Schleicher and the OECD that there ought to be doors for selection at different ages, to make sure that we do not close off opportunities for late developers. It also goes without saying that this is not a zero-sum game: we can support grammars and still want to raise standards across the whole state education system, particularly for the most deprived areas. That is what we have seen happening under this Government—1.4 million more children are going to schools deemed “good” or “outstanding” than were doing so in 2010—particularly through policies such as the pupil premium, which was specifically designed to target the children in the most deprived areas and to make sure that no child was left behind.
I support the Government’s proposals, but the other note of caution I sound is that grammars are not a silver bullet; they are one piece in patiently putting together the jigsaw that will help to revive social mobility. I support the Green Paper’s proposals on harnessing the talent, creativity and innovation of the independent sector. Indeed, I would go even further, as I like the idea of the Sutton Trust’s work to open up all independent schools on a meritocratic and means-tested basis. That would massively widen their intake of youngsters from humble backgrounds.
Notwithstanding the great strides we have made on apprenticeships and vocational training, this country still has a massive hang-up with the technical route for people to make a success of themselves. Whether we are talking about vocational training or apprenticeships, we do not have the same parity of esteem as there is in countries such as France, Switzerland and Germany. I would like to see us do more on those non-graduate routes to the professions so that we create the ladders of opportunities for not only bright academic youngsters, but for bright but not necessarily bookish youngsters.
When I look at the Green Paper overall, and not just what it says about grammars, I share the inspiring ambition that the Prime Minister has set out to make Britain the great meritocracy of the world. This is only the first step, but a lot of people are talking a good game about social mobility without being willing to get behind it, will it and deliver the means to it. On the basis that this is a first step, it has my full support.
Ian Austin (Dudley North) (Lab)
We face two major challenges in education in Britain. First, we are rapidly falling behind other countries for basic numeracy and literacy—not just Finland and South Korea, as has been traditional, but now even Estonia, Poland, Slovakia and the Czech Republic. That is one reason why Michael Wilshaw recently told the Education Committee that we have a mediocre education system in our country. Secondly, with the innovation economy creating jobs at a much higher rate than the economy as a whole, and with jobs that require no skills or low skills disappearing at a rapid rate, we need to educate all our young people to a high standard.
However, as we have heard, last week’s Social Mobility Commission report shows that compared with children from the most advantaged areas, children from deprived areas are 27 times more likely to go to an inadequate school, more likely to drop out of education at 16, and 30% less likely to study A-levels that could get them into a top university. White working-class boys are even worse off. New research by the Sutton Trust shows that three quarters are being so badly let down that they are failing to achieve five good GCSE grades. Let us compare that with the situation for pupils from independent schools: just five public schools send more pupils to Oxbridge than 2,000 state schools—two-thirds of the entire state sector; and despite accounting for just 7% of school pupils, those from independent schools represent seven out of 10 High Court judges, more than half our leading journalists and doctors, and more than a third of MPs.
I want to see the whole country united around the mission of driving up standards and opening up opportunity for all pupils, but grammars can improve social mobility only if poor children are able to go to them. Analysis by the Education Datalab shows that poor children are much less likely to get in than their better-off peers. Poor children have already had a poorer start to their education by the age of 11, making it harder for them to get into grammar schools; but even where two children have the same scores at key stage 2, the poorer child is less likely to pass an entry exam and get into a grammar school. In fact, in areas with selective grammar schools the gap between rich and poor is greater than it is in areas without any grammar schools at all. Grammar schools also put a barrier between these pupils and some of the country’s most experienced teachers: the Education Datalab also shows that 54% of teachers at grammars have been in the profession for more than 10 years, whereas at a secondary modern just 41% have the same experience.
We should be doing the opposite. We should have better schools for every child, and we should expand the gifted and talented programme. Instead of using scarce resources on new grammar schools, we should focus on improving early years education and tackling stubborn levels of under-achievement in areas such as the black country, and areas across the midlands and the north. We should provide incentives and support to train experienced teachers, get them into schools with poorer children and help them stay in the profession. Anyone who visits a school that has been turned around or seen a dramatic improvement in results will know that it is impossible without the inspirational leadership that brilliant heads provide. We need new ways of identifying, recruiting and training a new generation of headteachers.
New grammars will not tackle the fundamental problems that our education system faces. They will not transform the quality of education for all pupils or tackle the social mobility crisis that exists in Britain. The policy will do nothing to tackle the chronic shortage of teachers—the teacher recruitment and retention crisis. It will not help to identify, train and recruit a new generation of brilliant heads, improve early years education, which is the key to giving every child a first-class start, or improve the status and quality of vocational education. It will do nothing about the funding crisis facing post-16 education, and the deepest cuts that the further education sector has ever seen. Those are the issues that the Government should address.
We should all agree that education is our No. 1 priority. Let us sweep aside this old party political dogma. Instead of using time, energy and resources on expensive and time-consuming structural changes for which there is absolutely no evidence, let us have a national debate about education and involve all the parties, employers, and the teaching profession. Based on the evidence, we can then work out how a modern education system should be structured and what young people need to learn for the modern economy.
Craig Whittaker (Calder Valley) (Con)
The recent state of the nation report of the Social Mobility Commission highlights the challenges that we continue to face when it comes to tackling educational inequality and improving social mobility. Thanks to the Government’s reforms since 2010, there are 1.4 million more children now attending schools that are rated “good” or “outstanding” compared with six years ago. Furthermore, £2.5 billion has been invested this year in the pupil premium, which is reducing the attainment gap between children from disadvantaged backgrounds and their better-off peers in primary and secondary schools. I say to the hon. Member for Bradford South (Judith Cummins) that that is having a much bigger impact than EMA ever did or ever would have. However, there is still far more to do. Children living in the midlands or in the north have a smaller chance of attending a good school than children in the south. Just 5% of children eligible for free school meals are getting those five A grades at GCSE, while white working class boys, as we have heard many times today, are less likely to go to university than any other group in society.
As has been mentioned earlier, it is vital that appropriate support is targeted at children of a young age, as we know that educational inequalities start before children reach school age. Indeed, a report from the Institute for Public Policy Research earlier this year stated that children from the north are already behind their southern counterparts by the age of five. From September next year, the Government will double the current entitlement of 15 hours of free childcare a week for all three and four-years-olds in England to 30 hours—part of a record £6 billion per year investment in childcare by the end of this Parliament. The introduction of the early years pupil premium has equipped providers with the flexibility to innovate to improve the quality of early years provision for eligible children.
I shall briefly mention one incredibly important group of young people whom we must consider as part of this debate—children who are looked after in the state system. Outcomes for our looked-after children in education are poorer than their peers, and the gap gets wider as the children get older. Although trends in the educational attainment of looked-after children are generally improving, these children are still far less likely than their peers to receive good GCSE and A-level results and, indeed, tend not to go to university. When we speak about social mobility and ensuring that a child’s background should not determine how far they can go in life, it is imperative that we remain mindful of looked-after children and the sometimes unique obstacles that they face.
All this is where we are in our current system. We can all agree that despite the improvements that have been made since 2010, there is still a shortage of good school places and adequate choice for parents when it comes to choosing the best education for their child.
There are two grammar schools in my local area: Crossley Heath and North Halifax Grammar School. Both schools provide an excellent education to children and have proved incredibly popular with parents across Calderdale for many years. Sadly, although they are popular with all parents, it is only those in middle-income or high-net-worth families that tend to access those schools because of the costs associated with preparation for entry—whether tuition or private school. This has been a big bugbear of mine for many years. If our local primary schools are serious about social mobility and about access to the right school place for each individual child, why do they not offer tuition to access grammar schools for those children who are capable and come from less well-off means?
It is not because the schools cannot afford to so—we have already heard how much they get from the pupil premium—but because they oppose the principle. Indeed, to the many Opposition Members who oppose selective education on principle, I would say that this discrimination is already an inbuilt part of the comprehensive system at present. Having a ban on grammar schools already causes an inbuilt discrimination against those without monetary means. Comprehensive schools also tend to be highly selective on wealth in other areas, as good and outstanding schools are disproportionately in well-to-do areas, and that is widely acknowledged.
Unfortunately, I do not have a great deal of time left, so I will be brief. In the interests of improving education standards and increasing choice for parents, there is a case for relaxing restrictions on selective education. That proposal, alongside other initiatives, will indeed increase social mobility.
Several hon. Members rose—
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. Such is the ferocity of this debate and the number of interventions, I am afraid that we are over-running and I therefore have to reduce the time limit to four minutes. I call Liz Kendall.
Liz Kendall (Leicester West) (Lab)
Many hon. Members have already said that the Government’s plans to expand grammar schools will increase, not reduce, social division. All the evidence shows that poor children are less likely to get into grammar schools, that poor children are more likely to fall even further behind their better-off peers and that the effects can be long lasting. Our opposition to grammar schools and to the Government’s proposals does not mean that we are in any way complacent about the achievement gap between poor and better-off children at school—far from it.
Labour Members understand the complex problems that face many children and families in our most deprived areas, but that must never be used as an excuse for tolerating failure or low expectations. We must be fearless champions of every child and always put their needs first.
Getting a great education is about more than our belief that everyone should have the chance to fulfil their potential. It must be at the heart of our response to globalisation, too. The world is changing faster than ever before. New technologies and markets emerge, and companies and jobs move, in what seems like a blink of an eye. This is opening up real opportunities for some, but it is also leaving too many people behind. Yet our response to global change cannot simply be to hold up a mirror to people’s anger and despair. That leads nowhere, and does not create a single job or opportunity. Neither should we try to kid people that we can somehow turn back the clock, because we cannot stop technological change or the huge changes we are seeing in China, India and elsewhere. As my right hon. Friend the Member for Wolverhampton South East (Mr McFadden) says, we must be the champions of a chance, not of a grievance. We should not shy away from change, but instead equip people with the skills, knowledge, chances and choices in life to make change work for them.
There are three priorities on which the Government should now focus, the first of which is early years. When poor children in my constituency start school up to 19 months behind their better-off peers, they play catch-up for the rest of their lives. They struggle to get five decent GCSEs let alone go to college or university or get a decent job.
Mr McFadden
I thank my hon. Friend for mentioning the early years. Does she think that, given the closures of Sure Start centres in recent years, the money devoted to this new policy would be better spent on early years intervention?
Liz Kendall
I completely agree with my right hon. Friend. There is nothing economically credible about paying more for problems that could have been prevented. Having a genuinely long-term economic policy means prioritising the early years. We should make it a national mission that every child starts school ready to learn. If the Prime Minister really wants a country that works for everyone, she should scrap the Government’s £1 billion inheritance tax cut for the wealthiest few and put that money into transforming early years services instead.
All the evidence shows that strong leadership and great teachers make the biggest difference in improving attainment in schools, particularly for disadvantaged children. For poor pupils, the difference between having a good teacher and a poor teacher is a whole year’s learning. Those pupils cannot wait and we should not let them. The Government should be focusing relentlessly on getting the best heads and teachers into the most challenging schools. New incentives should also be trialled, such as writing off a proportion of teachers’ student loans for each year that they teach at a particularly challenging school.
Ian Austin
Does my hon. Friend agree that expanding Teach First would be a good way of getting more high quality teachers into struggling schools?
Liz Kendall
Indeed. I have seen in my own constituency the huge difference that Teach First teachers make in the most challenging schools, such as Fullhurst.
The Government should look at trialling a new Help to Buy scheme for teachers who agree to move to areas with struggling schools. Both of these initiatives could be paid for by reforming the existing, expensive bursary scheme.
Finally, we must transform vocational education to equip people with the skills they need to succeed in the global economy. Britain has nowhere near enough apprenticeships of high enough quality, focusing on the skills that our country really needs. Two thirds of the apprenticeships created in recent years were only at level 2 or GCSE equivalent, and three quarters of them went to people aged over 25 who were already in work. This is in stark contrast to countries such as Germany, which has much higher levels of participation and where 90% of apprenticeships are three to four-year programmes at level 3 or higher.
If the Government are serious about tackling skills shortages and helping people cope with globalisation, they need to create up to 300,000 quality apprenticeships at level 3 or higher every single year. They should focus on areas with the biggest skills gap, such as science, technology, engineering and maths, help more small firms take part with minimal bureaucracy, and ensure that young people can move from vocational to academic qualifications—and vice versa—at every stage post-16.
When I visit schools in my constituency, I see the energy, hope and enthusiasm in the children’s eyes, but I know that the cards are stacked against them before they have even begun, in a world that is now so unforgiving of people without skills. It is my job—and all our jobs—to break down the barriers to their success. Expanding grammar schools is not the answer, and will do nothing to address the very real challenges created by globalisation. The Government must think again.
Suella Fernandes (Fareham) (Con)
I am a Conservative because I believe fiercely in aspiration. I believe, too, that it does not matter where people start in life, what their parents did or how wealthy their family is—people can achieve their dreams and improve their life through their own endeavours, dedication and an attitude of service and community. That, for me, is real compassion, and it is no more abundantly clear than in relation to the education policies and achievements of this Government and this party.
If we look at the evidence, we realise that the Opposition have no grounds to complain. When Labour left office in 2010, two in five children were leaving secondary school functionally illiterate or innumerate—two in five, in a country with some of the best schools in the world. That is unacceptable and a scandal. Employers had lost confidence in exams because of grade inflation, and kids were made to catch up when they got to university. Thanks to the bold reforms of structures and standards, progress has been made. The free schools movement has reinvigorated the teaching profession to inject innovation and allow teachers and schools to provide the standards they want in their community.
Prior to my election to Parliament, I co-founded and now chair one of the early free schools, Michaela community school, in my home town, Wembley. We are now in our third year of opening. It is a secondary school in a run-down part of London. Pupils come from a wide of range of backgrounds—40% are Afro-Caribbean, more than 50% are on the pupil premium, nearly half speak English as a second language, and one in five has special educational needs. One third of pupils start at Michaela community school with a reading age below their chronological age; many have been thrown out of their previous schools. However, our philosophy of an academically rigorous curriculum, high expectations and zero tolerance of poor behaviour has proved popular with children and parents in the area. Every child is treated as though they have the potential to get to Oxbridge, even if some enter with low attainment and poor behaviour. We have children who make five years’ progress in reading in one year. That is because of our invigorated teachers, innovation in teaching and the standards that we apply.
Our teachers recently published a book about what makes Michaela excellent. I am going to read a story about one of our pupils, Korey, who joined Michaela community school last September.
“He is black, has special educational needs and lives on an estate. His mother and grandmother were desperate. His father was absent. His primary school said that he was the worst-behaved child they had ever seen. We happily invited Korey into Michaela.”
We are a very inclusive school. My headmistress, Katharine Birbalsingh, explained to Korey’s mother
“how the school works, why we have silent classrooms with hard-working children, learning more than anyone would have imagined possible, even more than their counterparts at private schools.”
At Michaela we have
“silent and orderly corridors, and lunch halls that are free from bullying, our playground where children are able to be children. It works because we do not pander to every parental whim, making exceptions in order to ‘accommodate’.”
Helen Whately (Faversham and Mid Kent) (Con)
Does the school that my hon. Friend chairs focus on the quality of teaching, which we know is so important for high achievement in schools?
Suella Fernandes
Exactly. It is the quality of teaching that has made the difference to Korey’s life, for example. He is now one of our extraordinary successes. He has progressed in reading and numeracy and his behaviour is transformed. It is quality of teaching and high expectations that make the difference to our children.
Julie Cooper (Burnley) (Lab)
Does the hon. Lady agree that quality teaching need not take place within the confines of a grammar school, and that it can take place in a quality comprehensive?
Suella Fernandes
Quality teaching is what makes the difference. Empowered heads, impassioned teachers, high standards and rigour—that is what is working in our schools. That is why we have seen progress. I pay tribute to my hon. Friend the Minister for School Standards because he has focused relentlessly and tirelessly on phonics, for example. Since the phonics test was introduced in 2012, we have seen thousands more children achieving the basic requirements in literacy, enabling them to enjoy reading. We have seen the introduction of the EBacc, an academically rigorous curriculum that is raising standards for thousands of children around the country. That is what makes a difference, and it is the Conservative party that is standing up and calling out low standards.
In our schools’ structures and standards, the Conservative party has made a massive difference in trying to remedy the failings of the Labour party in education. On grammar schools, Labour has got it wrong again. What parents like about grammar schools and what pupils cherish in those schools is exactly the point made by my hon. Friend the Member for Faversham and Mid Kent (Helen Whately)—high quality teaching, high standards, zero tolerance of bad behaviour and the cultivation of an environment where studying is valued and confidence is engendered. That is what works in schools. Why does the Labour party want to curb that and restrict a whole generation of children from accessing excellent schools, excellent teachers and innovation in our schools? The Opposition should be ashamed of themselves and they should support this policy as much as they can.
Stella Creasy (Walthamstow) (Lab/Co-op)
The question that we are all trying to answer today is, “If you are talented, can you succeed in modern Britain? And why does it matter if you can’t?” We should be unashamedly selfish about social mobility. Living in a country where more people can achieve their potential means that they are more likely to do things which help us all, whether they invent new forms of energy or become doctors, entertainers or even MPs. When brains, not birth, form the basis of achievement, we all benefit. That is why it matters that social mobility is stuck in Britain. It is wasting the potential to change the world.
In my short contribution today, I want to take up the challenge posed by my hon. Friend the Member for Bradford South (Judith Cummins), who spoke about the repetition in this debate, and offer the challenge that focusing on schools and education is not enough. We also have to address the divisions in access to finance and networks, which continue to hold back too many in our country. Bluntly, we have to address the fact that it is the bank of mum and dad—and all that it offers in terms of cash and connections—that increasingly makes a difference to social mobility in our modern world, and that we miss a trick if we do not think about those things.
We should make no mistake: education too often drives outcomes, and money and privilege have a big hand in that, as many Members have already set out. That is not just about academic talent; it is also about creative talent, and the same patterns are clear in acting and sport, although with the possible exception of music. Surely, however, our answer to young, bright children cannot be that we think they should go on “The X Factor”—we know they have the X factor.
Instead, we have to understand the barriers they face in this post-Brexit, low-growth world, where constant, disruptive technological change means they will hold seven different jobs in their lifetime—two of which have not yet been invented. If we do not address those barriers, too many children will not get those opportunities. It is in that environment that we need to understand how access to finance makes a difference. Housing has come to dominate not just catchment areas, but families’ options for subsidising their children, whether that is remortgaging and starting up a business or being able to help their children go to university.
This is also about understanding how, in today’s disruptive world, the bank of mum and dad can be the difference in terms of taking the leap between one career and the next. With half of all today’s students chasing careers that will be made obsolete by technology and automation, we cannot afford to ignore this challenge.
Where previous generations fought to ensure that their children could advance up the career ladder, the next generation will thrive only if it can access multiple livelihoods. Many ladders are being taken away just as they are being created. Our new elite will be those with not just the money to start again, but the contacts and the confidence to get their foot in many doors.
In the face of such uncertainty about traditional career paths, one great hope for us should be the entrepreneurship among our young adults. However, what do we have to offer those young entrepreneurs? Whether someone is educated at university or wants to start a new business or to go into further education, the bank of mum and dad offers not just money but contacts and networks, in a world where access to internships and unpaid experience all too often defines outcomes.
That is why it is time for us to think again. It is time to ask how we ensure that not just 50% but 100% of all 18-year-olds can take out a loan for the pathway they want to take. It is time to ask how we can make sure every child can access that educational work experience or internship opportunity, not just those with the parents who can get them in the door or who can pay for them do that work. It is time to ask why on earth the last Government got rid of the child trust fund and to bring it back in time to help the next generation of children to move forward.
Michael Young talked about a meritocracy. That is why grammar schools are such an outmoded way of thinking. The future will be about the many different doors we want children to be able to walk through and about making sure that the bank of mum and dad is open to every single young person, not just the few.
Several hon. Members rose—
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. I am afraid we have to reduce the time limit to three minutes.
John Glen (Salisbury) (Con)
For me, social mobility is one of the most fundamental objectives of an education system and a Government—it runs deep in my veins. Last week, I had to give a tribute to my father, who recently died of mesothelioma. Without his commitment to my education, as somebody who, like my mother, left school at 16, I would not have had the opportunity to break free from a pattern of manual work, work in service or growing plants, as he did.
Each morning when I leave my flat, I see a framed letter from King George VI in 1943 to my great-great-aunt Maud, who worked as a maid in Buckingham Palace. I regard the fact that, in three generations, members of my family can move from being maids to Members of Parliament as a function of the social mobility that should exist in our country. Before it is suggested that, somehow, being a Member of Parliament is the summit of human achievement, let me say that I certainly do not believe that that is the case.
What I do believe is that education is about choices. I want to address the core motivation that may exist in the minds of those who sought this debate—that grammar schools somehow restrict social mobility to a chosen few, consigning children who go to non-grammars to a future without such opportunities. It is my contention that education is not about the type of school, but about instilling a fundamental belief in the value of hard work. It is about access to high-quality teaching for all and about rigorous standards in education, whatever the type of school. It is also about parental support and encouragement—something we have not heard much about today.
My father passed his 11-plus and he got some O-levels, but whereas his parents fundamentally did not see the point of further study, his grandsons see a very different focus, as my sister and I try to take advantage of every learning opportunity. So let us conceive of education and social mobility not simply as a function of school type. Let us value the framework that surrounds school attendance—the teaching, resources and esteem.
I also want to challenge the notion of stigma—the belief that, if one does not pass the 11-plus, one is consigned to a different life trajectory. It is said by some that such a child is labelled a failure. That is not my experience, looking at the eight secondary schools in my constituency.
Stephen Crabb (Preseli Pembrokeshire) (Con)
My hon. Friend makes an important point about 11 not being the cut-off point that defines a child’s future. Does he support the proposal, which some colleagues have referred to, that there should be multiple entry points into any new grammar schools?
John Glen
Absolutely. I totally welcome that point. I welcome the value that we see in university technical colleges, studio schools, academies and the range of other options that exist. There is a lot of mobility between those schools and a lot of transferring to grammar schools at sixth form.
It is wrong to suggest that we should have targets for where children go when they leave school—a target of a certain number going to university. We need to work hard in the House to generate parity of esteem for apprenticeships, higher-level apprenticeships, vocational education and all types of higher education. We should enable movement to these different settings at different stages.
The fact that so many of Salisbury’s young people go to the grammar schools for sixth form is testimony to the enduring quality of those schools’ academic A-level offer. However, the fact that other young people choose the excellent free sixth form is a reflection of how it provides for the diverse needs that grammars do not provide for and of how grammars do not suit all children.
We need to recognise that social mobility is achieved by embracing the broadest possible range of options, by encouraging specialisms and diversity and by valuing the widest context for learning for our young people.
Siobhain McDonagh (Mitcham and Morden) (Lab)
Social mobility is an issue for the white working class. It is an issue that we have failed to discuss in this debate. Only 32% of working-class white British students receiving free school meals achieved the GCSE benchmark last year. That is compared with 44% of mixed-race students, 55% of Bangladeshi students, 42% of black Caribbean students and 47% of Pakistani students, all of whom were also receiving free school meals. That has happened because the educational attainment of white working-class students has improved much more slowly than that of almost any other ethnic group over the last 10 years.
I could take Members of this House to the grammar schools in Sutton, next to my constituency, and I could show them classes of young first and second-generation Tamil kids on free school meals. They are there because their parents understand the importance of education. They live the immigrants’ dream, which many Members of this House have shared and benefited from. However, our own white working-class kids are not getting the benefit. The issue is so much bigger than the type of school; it is about all social inputs.
We know from the Education Committee’s report into underachievement among white working-class kids that going to a good school disproportionately benefits poor white kids. There are schools out there doing a brilliant job and changing lives. I would like to suggest that, as in so many cases, Members have a look at the Harris academy chain in south London. Last year, about 56% of white British students nationwide secured five A to C GCSEs. However, at Harris Greenwich in 2015, 60% of white British students secured those grades. Just five years ago, the school—then the Eltham Foundation—was in special measures. However, now, under the excellent leadership of a strong principal, George McMillan, it has undertaken quite an unimaginable transformation. Harris Falconwood has a staggering 73% of white British students securing these grades. Yet again, the rate of success of this school is incredible. In 2008, only 17% of students achieved these grades, but under the leadership of principal Terrie Askew, the school is now judged “outstanding” by Ofsted.
These schools should be our ideals, regardless of whether they are mainstream, grammars or academies. I am enormously grateful to Lord Harris for his involvement in the schools in my constituency, but I am also grateful to all the people who lead and teach in our schools.
Helen Whately (Faversham and Mid Kent) (Con)
I feel keenly the importance of every child having a chance to succeed, never more so than when I visit schools in my constituency or drop my own children off at school and see bright faces in the playground or lined up with crossed legs in assembly, full of hope and potential. The question today is how we best nurture that potential and enable every child to make the most of their talents. From pre-school, through primary and secondary school, and on to further education, every stage is an opportunity. Indeed, at every stage there is also a risk that some children may do less well, relatively, but fear of difference in results must not drive policy, as I fear it does for some Opposition Members.
There is a clear consensus in the House about the importance of pre-school education and early years education—primary school. Progress is being made in these areas, particularly in the improvement of standards in primary schools, but there is more to be done, particularly so that children arrive at reception already having good language skills, particularly in their first language, which is not always the case.
Today we are talking primarily about selection. Opposition MPs have been attacking academic selection but, oddly, not any other forms of selection. They have not countered the points made about why they are so happy about selection for sports or arts, nor made it clear where they stand on existing grammar schools. They appear to have a pretty confused policy. I stand here representing a constituency in Kent where we have excellent grammar schools that are extremely popular with parents. I urge Opposition Members to listen to parents who like those schools and try to understand why.
Significant misinformation has been put out about achievement in Kent’s education system. Children in Kent achieve above the national average in their GCSEs. The system works well. Within that system, in particular, children from low-income families, on free school meals or in receipt of the pupil premium are doing especially well in our grammar schools. That enables those children to make up the gap between themselves and other children with greater advantages.
Suella Fernandes
Can my hon. Friend inform the House how many children who go to grammar schools go on to university, or to Russell Group universities?
Helen Whately
We know that children are much more likely to go on to Russell Group universities if they have attended grammar schools.
In Kent, an increasing number of children who have received the pupil premium are attending grammar schools, so Kent is working at widening access. I really welcome the points in the Government’s Green Paper on widening access so that more children have a chance to attend excellent grammar schools. One of the critical things is whether primary school headteachers support their pupils in getting into grammar schools. For primary schools that do so, that makes a huge difference; for those that do not, that is a real disadvantage to those children. I would like more schools to emulate our best primary schools, where children are supported to go to what is the best school for them. We also have grammar schools that favour in their admissions criteria children on low incomes. They are undertaking outreach to primary schools to make sure that children who have the right academic potential to do well in grammar schools get a place and can make the most of that potential.
Finally on the experience in Kent, I want to emphasise the cases where selective and non-selective schools are working very well together as part of a trust. An excellent example of that is Valley Invicta Trust. I encourage the shadow Secretary of State to come and visit so that she can see a comprehensive school and a grammar school in one go, and see the excellent results that both those schools are getting for their pupils.
Before I conclude, I should mention the importance, underlying all this, of high-quality teaching. What academies and grammar schools are doing so well is making sure that their teachers provide excellent teaching so that all the children who go to those schools can truly succeed.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
Thank you, Madam Deputy Speaker, for giving me the opportunity to speak in this vital debate, which goes to the heart of how we grow prosperity and share it for all.
We live in a divided nation, and the divisions are becoming deeper and more entrenched. Children in this country should feel that they have a society and a Government who are on their side, but poverty is on the increase and social mobility has stalled. I want to share a few perspectives from my constituency—to give a dose of reality about what life is like on the ground—and call on the Government to reverse their cuts to school budgets.
The lives of thousands of young people are being blighted by family poverty, and low educational attainment often flows from that family stress. Schools that can and should be engines of opportunity and mobility are themselves struggling, and now find themselves filling the welfare gap. I pay tribute to a number of schools in my constituency that have helped to research how we can come together as a local community much more so that we support them as they struggle, particularly Cranford Community College, Springwest Academy and Reach Academy.
The Social Mobility Commission’s report last week was a grim read, stating that
“Britain has a deep social mobility problem which is getting worse for an entire generation of young people”.
According to the commission, those born in the 1980s are the first generation since the second world war not to start their careers with higher incomes than their parents and immediate predecessors. We also know that more than a third of our young people nationally—it is the same in Hounslow in my constituency—are leaving school without the equivalent of five good GCSEs. That is a matter of shame for us all. It is the case for 900 young people in Hounslow alone per year.
My recent conversations with headteachers about the impact of benefits changes and rising family poverty are revealing consistent themes. A picture emerges of families struggling to make ends meet and not always being able to afford food, of children arriving at school hungry, of housing stress, of overcrowding in damp conditions that hampers children’s ability to study and parents’ ability to work, and of rising family debt whereby parents have to borrow money for school uniforms and shoes. Schools try to help. One teacher has told me that they hand out money for shoes two or three times a day.
There is no getting away from the fact that Government cuts are making life harder for families and schools. The choices made by this Government and by the previous Chancellor show that there can be no greater false economy than underfunding our schools. It is time that the Government did more than give us the rhetoric—time that they understood that the reality of the choices they make are having an impact on the lives and prospects of children across this country.
David T. C. Davies (Monmouth) (Con)
I have sat here for hours listening to one Opposition Member after another criticising Government policies and trying to offer a few policies of their own. The interesting thing is that not one of those Opposition speakers has mentioned the fact that for the past 18 years they have been implementing their policies in another corner of the United Kingdom, which I come from: Wales. On any reasonable comparison of the difference between the education systems in England and in Wales, England comes out on top, and I say that as an ex-Welsh comprehensive school pupil with three children currently going through the state system in Wales.
The comparisons are absolutely clear. Fewer teachers take time off for sickness in England than in Wales. More money is spent per head on pupils in England than in Wales. Children in England have a much better chance of getting into university, as a headline from the BBC made clear only a month or two ago: “Top grade A-level performance falls in Wales”. Pupils in England have a better chance of getting into the best universities and a better chance of getting a first-class honours degree than pupils in Wales.
Why is that? It is because in Wales Labour has followed the outdated policies that it tries to suggest that we impose in England. The Labour Government in Wales have scrapped testing. They do not like streaming or any kind of selection. They do not like classroom assessments, because they think that those assessments put teachers under pressure. They do not want to give parents the choice that my hon. Friend the Minister for School Standards wants to give them in England.
No one has to take my word for that; they can look at PISA reports—the independent OECD surveys of education systems around the world, including those in the United Kingdom—which clearly show that England is doing far better than Wales. Alternatively, they can look at Estyn reports, a recent one of which showed that Wales is lagging far behind England in areas such as English language. Even if people are not convinced by those neutral reports, they can read what former Labour Education Ministers in Wales have said. Leighton Andrews said
“we took our eye off the ball”,
while Huw Lewis issued an apology to the learners of Wales for the Welsh Labour Government’s failed policies. Labour Members like to promise a nation fit from cradle to grave, but as far as education is concerned, they have delivered a failure from the nursery to the bursary.
Chris Elmore (Ogmore) (Lab/Co-op)
Unsurprisingly, speaking as a fellow Welsh Member, I think that the hon. Gentleman is painting a rather bleak picture of the education system in Wales. He talks about Estyn, but does he not acknowledge that the Conservative-led county council for his own constituency was put into special measures by Estyn because of weak leadership? The quotes from Leighton Andrews and Huw Lewis are a considerable number of years out of date. Over the past five years, there have been improvements to GCSE and A-level results, and the gap has closed significantly because of underperformance in England and improved performance in Wales.
David T. C. Davies
I notice that the hon. Gentleman says that the gap has closed, but he does not say that Wales is doing any better than England. In actual fact, one of the headlines I referred to is only a couple of months old, so there are still many problems here.
In England, we have rejected the sort of left-wing, anti-selection, anti-testing, anti-choice dogma that Labour has followed since the 1960s, which is completely out of date. That is why we are delivering higher standards for pupils in England than for those in Wales. It is why Labour Members do not want to talk about their failures in Wales. It is why former Labour Education Ministers from Wales are having to apologise to their own constituents for their failures.
Members of the public know perfectly well that this Government can be trusted on the economy, on defence, on law and order, and on immigration, but there are still some people who think that Labour can be trusted more on public services. The reality is that we have put public services at the heart of our agenda, and we will continue to do so. We should loudly and proudly shout from the rooftops about the enormous successes we have delivered in education, health and other public services for the people of England.
Corri Wilson (Ayr, Carrick and Cumnock) (SNP)
The evidence about the adverse effects of poverty on educational attainment and achievement is undeniable. My constituency has one of the highest child poverty rates in Scotland. In some parts of my constituency, one in three children are living in poverty. Data from the 10-year study “Growing Up in Scotland” show that children living in poverty are much more likely than others to face social, emotional and behavioural difficulties, to be overweight and to have multiple other problems. All those factors will have an impact on their future attainment and achievement.
Poverty ruins childhoods and reduces life chances. I am proud that the Scottish Government are focusing on closing the attainment gap and that the First Minister has made education a priority. A higher percentage of entrants to Scottish universities are from our poorest communities. The gap in academic achievement between our 20% most deprived pupils and our 20% least deprived pupils has reduced. The gap between those from the most and least deprived communities in positive school-leaver destinations is narrowing. Part of that is down to the fantastic work of many of our universities and colleges, which are working on positive routes into higher education. I pay particular tribute to Ayrshire College, Scotland’s Rural College and the University of the West of Scotland, all of which have campuses in my constituency, for the efforts that they have made to encourage and support students in the transition between further and higher education.
In Scotland, we are far from complacent on this issue. More needs to be done, and more is being done. When we see the attainment gap starting long before children get to school, it is clear we need to focus on early learning and education. While the UK Government pursue their damning and divisive obsession with grammar schools, the Scottish Government are doing everything possible to ensure that each child has access to the same opportunities, no matter what their background is.
Angela Crawley (Lanark and Hamilton East) (SNP)
Does my hon. Friend agree that the education system in Scotland, which prioritises the ability to learn, not the ability to pay, enables more students to attend university because their tuition fees are covered by the Scottish Government, whereas the English system denies students that opportunity?
Corri Wilson
I agree 100% with what my hon. Friend says.
Our curriculum for excellence is combining academic excellence with the attitudes and skills for success, and it is giving young people the opportunity to gain vocational qualifications without being seen as second best. In Scotland, we are making progress on ensuring that every child has the ability to reach their full potential—from baby boxes to free university tuition, we are working hard to improve life chances and aid social mobility—but, ultimately, our efforts in the education system are tackling a symptom not the cause of inequality.
The Prime Minister has said that her Government are committed to fighting injustice wherever it arises. A substantial body of research shows that poverty has a devastating impact on the lives of young people across the UK. We live in a society where the rich enjoy the trappings of wealth and the poor rely on food parcels from charities. Far from fighting injustice, this Government are driving people further into poverty while offering to syphon off a few of the brightest poor kids for a place in their grammar schools and pretending that that is equality. A two-tier system is totally unacceptable.
Robert Jenrick (Newark) (Con)
In January, the ceremony to open the new £25 million Newark Academy was cancelled because the teachers were out on strike. On the same day, a window cleaner from South Leverton who came to my surgery said that he could not send his bright son to the local grammar school in Gainsborough, which is across the border in Lincolnshire, because he could not afford the £400 a year it would cost to get him there every day. This year, more than 50% of the children in my town are going to schools out of town, and they are the 50% who can afford to do so, not the 50% who might need that the most. It is no coincidence that Newark and Sherwood district is among the areas in the United Kingdom where social mobility is at its lowest.
The story of Newark secondary schools is a near-complete description of the failings of our state schools since the 1960s: the destruction of a successful grammar school, the Magnus, which had been established in 1531; the pre-emption of places at the good schools in neighbouring, better-off towns by articulate parents with the resources to work the system to their advantage and to afford the cost of travelling to them, given that such an option was not available in their own town; the flight of middle-class parents to Lincolnshire for grammar schools, for which demand was extremely high, but for which one needs £500 to £1,000 a year to bus one’s child to school; the tolerance of failure—or at least of consistent underperformance—and a great deal of complacency and hand wringing, with lines such as, “What do you expect? It’s only Newark”; and the gradual decline in aspiration and a pervasive culture of low expectations, including the kicking away of the ladder out of ignorance and poverty by neglect and complacency dressed up as egalitarian, progressive education policy.
Suella Fernandes
Does my hon. Friend agree that the culture of low expectations and the soft bigotry of a “prizes for all” culture is exactly what needs to be changed and what this Government are standing up against?
Robert Jenrick
I could not agree more with my hon. Friend.
In Newark, social inequality is not the problem, but the symptom of a real malaise. The condition of the town’s education has been allowed to reach an appalling level. Having diagnosed the problems—the lack of a choice of school, an unwillingness to intervene, and an unwillingness to embrace selection in any form, even when parents are crying out for it—there are many solutions. In my town, armed with a range of tools, we are starting to make progress under this Government, and I am convinced that we have finally turned the corner.
We intervened to remove the sponsor of the Newark Academy, which was not working, and brought in the No. 1 school in the county to run it, thanks to Conservative policy. In September 2017, we will open a new free school in Newark, of which I have the pleasure of being a governor. It will be committed to the highest standards of education, discipline and character formation, and to repatriating children from across the county whose parents have had to send them away. The diocese of Southwell and Nottingham, which runs the other school in the town—the Magnus—has now increased its commitment to driving up standards as a result of the competition and choice that we are now putting into the system. The apprenticeship levy is forcing a long-overdue conversation between the employers in the town and the schools.
The common thread that runs through all these policies is parental choice. Parents in my town want the choice to send their children to the school that suits them and their needs, rather than being told by others that only the privileged few who can afford the bus fare or the fees at a private school deserve it.
John Pugh (Southport) (LD)
I do not want to repeat the many excellent points that Members have made. If you will excuse me, Madam Deputy Speaker, I will indulge in a moment of pedantry.
The subject of the debate is “social mobility”, and that is not a one-way ticket; one can go up or down. There was a lot of social mobility during the great depression, most of it downwards, and the happiest societies are not necessarily those with the greatest levels of social mobility.
I have noticed that many people who bang on about social mobility are rather quiet on the subject of social inequality. The assumption must be that any level of social inequality is acceptable as long as there is some social mobility. I have a problem with that assumption, even if it is very comforting for those who have wealth and privilege to hang on to. It is easier to call for the wider distribution of opportunity than the wider distribution of wealth, even when there is evidence that societies without vast differences in wealth are happier. People who have read “The Spirit Level” by Richard Wilkinson will be mindful of that point.
The vast differences in wealth between individuals in modern society are growing, as we see if we examine the wage ratios between those at the top and bottom of most businesses and compare them with what they were in the ’50s, ’60s and ’70s. It is hard to believe that that is due to super talent. Regardless of this debate, we should all worry if hard work cannot result in a decent standard of living for the less talented in an affluent society—people are struggling in the gig economy, with no security and poor housing prospects, and some are living hand to mouth—even if there is some prospect of social mobility.
Education, however good, cannot make us all talented and cannot give us all the same life chances. I am sure the right hon. Member for Wokingham (John Redwood) agrees with that. Sometimes, education is not sufficient even to improve children’s life chances. Often we need cultural changes that go beyond the child—changes in the community, parents and society. Housing, economic growth, low crime rates and local empowerment are all key determinants of mobility and social aspiration in any area. Education by itself is rarely sufficient.
That is probably why, despite the many schemes in places such as Knowsley and the many millions that are spent on education there—I think that one scheme cost £157 million—we have failed to produce improvement across the board. Yes, Knowsley is at the bottom of the league for educational achievement, but it is also second bottom for deprivation. There is a connection somewhere.
We have heard in this debate that the magic ingredient we need for Knowsley is a grammar school. Middle-class tiger parents will not cry about working-class kids, as is the case in other areas. I have heard it said that Knowsley has never had a grammar school, but that is false. It did pioneer comprehensive education, but I had the privilege of going to a grammar school in Knowsley—Prescot Grammar School. The grammar school recipe has been tried, but it did not move the dial notably.
Kwasi Kwarteng (Spelthorne) (Con)
I am very grateful to you, Madam Deputy Speaker, for calling me towards the end of this interesting debate.
I have noticed that there is a gaping hole at the centre of the Opposition’s case on grammar schools. If grammar schools are based on a good principle, why would Labour oppose extending them? And if they are based on a bad principle, why is it not committed to abolishing them? Surely, if it is a good idea, a cap or ban is a crazy way to proceed if we want to widen opportunity and choice. If it is a bad idea, why should we allow grammar schools to exist? Why should we allow the existing grammar schools to continue providing a bad education, if indeed they are bad schools and it is a bad principle? It cannot be the case that the number of grammar schools in this country as of 2016 should be fixed in aspic for ever more and never increase. That would be a very illogical way to proceed.
Secondly, I want to pick up on the idea of elite education. My right hon. Friend the Member for Wokingham (John Redwood), who I am glad is in his place, made the point that everyone in the House is happy to see elite soccer teams, musicians and gymnasts educated in private facilities, private schools and even some state schools on a selective basis, yet when it comes to a broad education, somehow it is a taboo issue.
The other issue raised was the fact that we have independent schools. Even if we abolished every single grammar school in the country, we would still have a system in which private schools could be attended by very wealthy—and often very talented—people, accentuating existing differences and inequalities.
Labour’s position is entirely incoherent. It has not given a single indication of what it wants to do with grammar schools. Does it agree with them in principle, or is it against them? If it is against them, why does it not have the courage to say publicly that it will abolish them?
The proposals in the Green Paper are actually quite mild. No one is suggesting that we go back to the 1950s or some sheep and goats, be all and end all 11-plus. Rather, we are saying that there should be diversity of provision. People should be able to access selective education not simply because they can afford to but because they have the abilities and aspiration to do so. We want a diverse system from which all children can benefit.
Neil Gray (Airdrie and Shotts) (SNP)
I declare an interest at the start, in that my wife is a primary school teacher. I shall focus the majority of my brief contribution on education as a key social enabler.
The Scottish Government are embarking on an Administration-defining mission to close the attainment gap between the most and least affluent school pupils. Nicola Sturgeon’s Government are to allocate £750 million during the course of the Scottish parliamentary term through the Attainment Scotland fund and focus on improvement in the key areas of literacy, numeracy, and health and wellbeing.
That is a welcome intervention, but, in terms of education policy, most crucial in narrowing the attainment gap and realising social mobility will be the Scottish Government’s support for local authorities on teacher numbers and retention. The Scottish Government have a good record on that front. In 2006, 16,000 primary 1 children were being taught in classes of 26 or more; as of 2015, that was down to 657. That is very important for me, as a recent report highlighted that and Shotts has, in some areas, 32% of children living in poverty.
The End Child Poverty figures should shame us all and serve as a big wake-up call to North Lanarkshire Council, which failed to maintain teacher numbers last year, despite having some of the highest levels of child poverty in Scotland. I encourage the Scottish Government to keep pressing local authorities on the number of teachers and classroom assistants in employment, so as to help those areas, such as Airdrie Central ward in my constituency, that have such high child poverty ratios.
It is important for us to get it right for children as early as possible, as highlighted by Action for Children. That is why recent and planned childcare interventions up the road are so important, on top of the childcare plans outlined by my hon. Friend the Member for Glasgow North West (Carol Monaghan). Every nursery in the poorest local areas will have an additional qualified teacher or childcare graduate by 2018. It was also recently announced that childcare funding will change to follow the child, a very welcome intervention. In another welcome development, every child born in Scotland will receive a baby box—a box of essential items to help level the playing field in the very first days of their life—starting next year.
If we are serious about improving social mobility and helping people along, however, the UK Government must do more in other areas. I hope tomorrow’s autumn statement will see greater investment in good quality affordable and social housing. We should also expect plans from the UK Government on how they hope to overturn the stagnation in average wages since 2009.
Education policy can help children out of poverty to some extent, but we cannot expect teachers to fix everything for us in this regard. The real win will come when this Government commit to addressing the causes of child poverty: low incomes, poor housing, social security cuts and insecure work.
Huw Merriman (Bexhill and Battle) (Con)
To me, the conundrum seems to be how we break the grammar school system’s current status as perhaps the preserve of the middle class while at the same time not going backwards to what I would call the apartheid system that used to be in place.
I refer to that because I failed my 12-plus, as it was, and went to a secondary modern school. In my small town there were two schools, the Royal Latin School and the secondary modern, divided by one hedge. Siblings were unable to talk to each other across the hedge, because the grammar school head refused to countenance it. Pupils at the secondary modern left school at 16—they were told by their teachers that there was little point in going on to do A-levels, because why would someone like them pass A-levels? I ignored that advice and I am glad I did. I would certainly not vote for a return to a grammar school system that took us back to those days.
Equally, we have the huge problem of grammar schools being the preserve of the middle class. My constituency in East Sussex borders Kent. In my daughter’s primary school in East Sussex, a quarter of the class moved over to the grammar school, leading to a brain drain from East Sussex. Only those parents who can afford to pay the increase in house prices will see their children go to the grammar school which, while based on ability, is catchment-based. Entrance to another school is based on pure ability, so only parents who can afford the tuition, rail fare or prep school fees to have got their children to the school in the first place will be able to enjoy it. I therefore maintain that the current system does not work.
Should we stick or should we twist? I was surprised by the Opposition spokesperson’s speech. I expected the Opposition to state that the system does not work at all and that it should be abolished. If they wish to continue with the status quo, they will inadvertently support this middle class preserve. Perhaps somewhat reluctantly, I welcome the shift in the Government’s approach towards the expansion of grammar schools. The situation in relation to social mobility is so bad that something has to be done.
I spent the past couple of days reading research from the past 50 years. It is completely inconclusive on which system, comprehensive or grammar, is better. What is undeniable, however, is that our social mobility statistics are so bad that something must be done. Those on the Government Front Bench must reflect on whether creating more grammar schools, and perhaps taking us back to towns with a choice of two schools, means inadvertently moving back to a situation in which the choice is either success or failure. There must be success for all, regardless of entrance tests.
Justin Madders (Ellesmere Port and Neston) (Lab)
Last week, in my capacity as the chair of the all-party group on social mobility, I attended the launch of the Social Mobility Commission’s annual report. What I heard amounted to a damning indictment of the status quo: for too long, we have been too ready to accept that those from poorer backgrounds will proportionally do worse; for too long, we have allowed privilege and connections to override ability and potential; and for too long, we have deluded ourselves that economic growth translates into increased prosperity and opportunity for all. Let us invest in our children in their early years and let us have a school system that offers opportunity for all, but let us not kid ourselves that that will be enough if we continue to have a country where access to opportunity is completely closed off to huge sections of society.
The all-party group on social mobility is currently conducting an inquiry into access to the professions. Our report is due out soon. We saw many similarities between the evidence we heard and the commission’s findings. One such area was internships. Too often, internships are not just a way to get a foot in the door but the only way to open the door at all. They have become a further compulsory step into many professions, but by their very nature they exclude many. We found that too often these placements are determined by existing connections. Be it a family or a business contact, the foot in the door is often available only to those who know someone on the other side of it.
Another area where we found the evidence remarkably consistent was in terms of the aspirations our young people have. They need role models, mentors and inspirers, people from their community who have been there and done it and who can say to them, “Yes you can be whatever you want to be.” For too many, however, that is simply not on the radar.
The evidence I heard during the inquiry persuaded me that it is simply not enough for us to encourage companies to do more. We need to develop a culture in which social mobility is on a par with protected characteristics in terms of career prospects. We rightly challenge when we see minority sections of society not getting an equal opportunity, so we should do the same here. We cannot allow the situation to continue where background is likely to be the biggest factor in determining chances of success in life.
I would like the largest companies to publish data every year on how many people they have recruited from the most disadvantaged backgrounds, and, crucially, how those people have progressed within that company. We need a commonly agreed, publicly available record of how individual companies are doing. Only then will we see the big change in attitudes we need. Among advanced nations, the UK stands alongside the United States in having low social mobility. We need only to look across the Atlantic to see where ignoring these issues over successive generations leads. We should be in no doubt that we are heading the same way. I feel it when I speak to people in my constituency—the anger, the frustration, the hopelessness—who see the lack of opportunity around them and fear the same or worse for their children. Automation and artificial intelligence are going to narrow the opportunity gap still further in the coming years. We need to act now before it is too late.
Mike Kane (Wythenshawe and Sale East) (Lab)
We have had a good debate this afternoon. It is clear that the Government’s obsession with new grammar schools is simply a rehash of failed policies from the past—policies not fit for purpose in the digital age of the 21st century, as pointed out by my hon. Friends the Members for Manchester Central (Lucy Powell) and for Rochdale (Simon Danczuk). As my hon. Friend the Member for Bradford South (Judith Cummins) said, these proposals are pure dogma.
This grammar school policy shows that the Government have no answers to the challenges facing our schools. While they waste time and energy on new grammars, they have nothing to say about falling school budgets, the crisis in teacher recruitment and retention, and the lack of good school places. Instead, they would segregate our children: a first-class education for the privileged few, a second-class education for the rest. The hon. Member for Glasgow North West (Carol Monaghan) gave a passionate personal testimony about her father, who failed the 11-plus, while my right hon. Friend the Member for Wolverhampton South East (Mr McFadden) explained, in an excellent speech, that policy should be designed for the tens of millions, not the few.
Mike Kane
I always like to debate with my constituency neighbour, and it was great to have him visit Sale Grammar School in my constituency just the other week. I regularly go to speak to the children there. The Government are currently nationalising and privatising the system at the same time. As the hon. Gentleman will remember from the debates in the mid-1990s, we would introduce a system of subsidiarity back into our education system, so it would be up to local people to decide; we would not have a nationalised system.
Mike Kane
I need to make progress. [Interruption.] I have answered the question.
Ministers have provided no evidence of how extra grammar schools will increase the social mobility of our young people—an issue more pronounced in the midlands and the north, as the hon. Member for Calder Valley (Craig Whittaker) rightly pointed out. I could not agree more. Let me be clear: citing evidence about access to Russell Group universities is a complete red herring and a corrupt use of the statistics that fails to compare like with like. Let me provide some evidence instead, from the Government’s own chief inspector. Sir Michael Wilshaw has said that in Hackney the attainment gap between those eligible for free school meals and their colleagues is 14%. In Kent, which retains a selective system—I see the hon. Member for Faversham and Mid Kent (Helen Whately) in her place—the gap is 34%. In Kent, just 27% of pupils eligible for free school meals get five good GCSEs, compared with 45% in London.
The Institute for Fiscal Studies has said that
“those in selective areas who don’t pass the 11-plus do worse than they would have done in a comprehensive system”.
Research by the Education Policy Institute has shown that, once the data are controlled for prior performance, grammar schools do not actually improve results, even for students from disadvantaged backgrounds.
The issue of grammar schools has divided the Conservative party. Many senior MPs have come out against the plans. The Minister is currently having to work with an ex-Minister who did not want it and now has to work with a Secretary of State who does want it but is under orders from the Prime Minister; and the former Education Secretary, who spoke eloquently, does not believe in it. My constituency neighbour, the hon. Member for Altrincham and Sale West (Mr Brady), whom I have just debated with, needs to remember that Trafford has an excellent primary school system. I taught many of his children, I will have him know, which is why he has such good results in his constituency—and the primary system is not selective.
Turning to social mobility, my hon. Friend the Member for Feltham and Heston (Seema Malhotra) said that this will be the first generation since the second world war to be less well off than their parents. The Government have failed to build an education system that provides opportunity for all. Under this Government, the system is mediocre and falling behind, as my hon. Friend the Member for Dudley North (Ian Austin) pointed out. They are increasingly obsessed with structures rather than with what matters most—the quality of education for our young people.
We have seen scandal after scandal in our multi-academy trusts, and the Government cannot get to grips with the structures they are putting in place. There is no governance—no effective governance—in the system, as the Department for Education creaks under the strain. The Government are not tackling the key challenges facing our schools system—declining budgets and chronic shortages of teachers and places. They have failed to invest in our young people at every stage of their education. Schools are facing their first real-term cuts since the ’90s. Spending on further education has been cut time and again, while student debt continues to rise.
Government education policy has amounted to nothing more than a series of roadblocks to aspiration, opportunity and social mobility. The impact of those regressive policies is clear to all but the Government themselves. When Labour left office, 71% of state school students went on to university; last year, it fell to 62%, down from 66% the previous year. We Labour Members remain fully committed to ensuring that all our young people are given the opportunity to succeed on whatever educational path they choose, and that their opportunities are based only on what they aspire to—not on what they can afford. We will be fearless champions for every child, as my hon. Friend the Member for Leicester West (Liz Kendall) pointed out.
Figures published only last week by the National Association of Head Teachers showed that for the third consecutive year there is a real problem with recruitment across all roles—from teachers to senior leaders. Overall, a very high proportion—80%—of posts were difficult to recruit, while 62% of posts were filled only with a struggle and respondents were unable to recruit at all to an average of 17% of all posts. Recruitment difficulties for the main middle leadership roles in schools are pronounced. For posts carrying a teaching and learning responsibility or special educational needs co-ordinator responsibility, only 17% of roles were filled with ease.
High housing and living costs remain a serious barrier to recruitment in London and the south-east, but the cost of living is becoming increasingly problematic nationally. There has been a 7% rise in school leaders citing this reason for the problems they face. Difficulties in recruitment this year have meant that 41% of responding schools have had to cover lessons with senior leadership staff, distracting from school improvement, while 70% have had to use supply teachers at high cost.
Mike Kane
I must make more progress.
I mentioned funding earlier. According to the National Union of Teachers and the Association of Teachers and Lecturers, England’s schools are experiencing, as I said, the largest real-terms funding cuts for more than a generation. In real terms, schools will lose a huge amount of money, rising to £2.5 billion by the year 2020, and 92% of schools will have their funding cut. The average cut for primary schools will be £96,500, going up to £290,000 for secondary schools. [Interruption.] The Secretary of State chunters from a sedentary position, but there is a website where she can see the figures for herself. Budgets were protected only in cash terms, rather than in real terms, meaning that the schools budget is at the mercy of rising pressures, pupil numbers and the impact of inflation. On top of the figures I have just given, schools are now worried about being further punished with the fair funding formula that the Government have yet to consult on. The Minister has refused to guarantee that no school will lose out. All this amounts to chaos and confusion.
I want to thank all those who have contributed to the debate. I have not agreed with all Members, including the right hon. Member for Wokingham (John Redwood) and the hon. Members for Croydon South (Chris Philp), for Esher and Walton (Mr Raab), for Fareham (Suella Fernandes), for Airdrie and Shotts (Neil Gray) and for Bexhill and Battle (Huw Merriman). I would like to thank my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders) and I also wish him a happy birthday, as I am sure does the whole House.
We heard from my hon. Friend the Member for Walthamstow (Stella Creasy), and from the hon. Member for Salisbury (John Glen). I am sure that the whole House will join me in wishing the hon. Gentleman’s family all the best following the loss of his father to mesothelioma: I was sorry to hear about it. We heard from my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh), and from the hon. Member for Monmouth (David T. C. Davies), who always seems effectively to run down his own country. Finally, we heard from the hon. Member for Ayr, Carrick and Cumnock (Corri Wilson) and the hon. Members for Newark (Robert Jenrick), for Southport (John Pugh), and for Spelthorne (Kwasi Kwarteng).
We have a Government Front-Bench team that requires special measures. We have a Government who are failing on selection, failing on social mobility, failing on the recruitment and retention of teachers, failing to provide enough good school places, and letting our future generation down badly.
The Minister for School Standards (Mr Nick Gibb)
Improving social mobility has been the driving force behind our reforms of the education system over the past six years. Thanks to those reforms, and the tireless work of hundreds of thousands of teachers, there are now 1.4 million more good or outstanding school places than there were in 2010.
The Government have given greater powers to teachers and heads to deal with disruptive behaviour. We have learnt from the successful Mathematics Mastery teaching methods of the far east. We created the Education Endowment Foundation to promote the use of evidence-based teaching practice. We have rewritten the curriculum at both primary and secondary levels to raise expectations of what children can achieve, and the focus on the Ebacc has halted the drift from the important core academic subjects—a drift that was particularly marked in areas of disadvantage. We have removed more than 3,000 so-called equivalent qualifications that too many children from disadvantaged backgrounds were being misled into taking instead of GCSEs.
We have improved the quality of technical qualifications, and have promoted and increased the importance and status of apprenticeships. There have been 624,000 apprenticeship starts since May 2015. We have revolutionised the teaching of reading in primary schools. Longitudinal studies have shown that systematic synthetic phonics give children a flying start with their reading, writing and spelling, and as a result 147,000 more year 1 pupils are on track to become fluent readers this year than in 2012.
However, despite improved teaching practice and a growing number of good school places, there are still too many parents who do not have the choice of a good school place for their child. In 65 local authority districts, fewer than 50% of pupils have a good or outstanding school within 5 km of their homes. As the Prime Minister reminded us on the steps of Downing Street,
“If you’re a white working-class boy, you’re less likely than anybody else in Britain to go to university.”
According to a recent Sutton Trust report, white British boys on free school meals
“have now been either the lowest or second lowest performing ethnic group every year for a decade.”
It is because of that continued injustice that we are consulting on a range of measures to increase the number of good school places and serve communities that have yet to benefit fully from our education reforms. We want the education system to help build an even more meritocratic Britain, and we want to use the knowledge and expertise of this country’s world-leading universities and independent schools to benefit our school system. We want to remove the restrictive regulations that are preventing more children from going to high-quality faith schools, and we want to end the ban on the opening of new grammar schools.
As Philip Blond said when he introduced the recent ResPublica report on Knowsley,
“Reintroducing grammar schools is potentially a transformative idea for working-class areas”.
We know that grammar schools are vehicles of social mobility for the pupils who attend them, almost eliminating the attainment gap between pupils from disadvantaged backgrounds and their peers. Pupils in grammar schools make significantly more progress than similarly able pupils. Progress 8 shows an aggregate score of 0.33 for grammar schools, compared to a national average of 0. Ofsted has rated 99% of grammar school places good or better, and 82% outstanding. In a school system in which more than a million pupils are not being given the education that they need and deserve, it cannot be right to prevent the creation of more good and outstanding selective school places. As was pointed out by my hon. Friend the Member for Bexhill and Battle (Huw Merriman), the key is to make the alternative schools just as good, and that is what we are doing.
Nevertheless, we recognise that grammar schools can do more to promote social mobility. The Social Mobility Commission has said that young people are six times less likely to go to Oxbridge if they grow up in a poor household. In the north-east, not one child on free-school meals went to Oxbridge after leaving school in 2010. Yet of the state school pupils securing a place at Cambridge in 2015, 682 came from sixth-forms in comprehensive schools and 589 from grammar schools; in other words, almost as many come from the 163 grammar schools as come from all the 11-18 comprehensive schools put together. And we know that disadvantaged pupils from grammar schools are almost twice as likely to go to a top Russell Group university as those from more affluent comprehensive schools.
The Government are committed to ensuring this country works for everyone, not just a privileged few. With strict conditions applying to grammar schools, including ensuring more bright pupils from disadvantaged backgrounds are admitted, we will boost social mobility in Britain. That objective was at the centre of excellent speeches by my hon. Friends the Members for Croydon South (Chris Philp), for Esher and Walton (Mr Raab), for Calder Valley (Craig Whittaker), for Fareham (Suella Fernandes) and for Salisbury (John Glen)—and my condolences on the recent death of my hon. Friend’s father.
We also heard great speeches from my hon. Friends the Members for Faversham and Mid Kent (Helen Whately), for Monmouth (David T. C. Davies), for Newark (Robert Jenrick) and for Spelthorne (Kwasi Kwarteng). But the hon. Member for Glasgow North West (Carol Monaghan) let the cat out of the bag when she said the SNP’s view is not just against grammar schools, but against setting and streaming by ability within a school, not a view that lies within mainstream opinion, and which explains why attainment gaps have widened in Scotland.
I listened carefully to my right hon. Friend the Member for Loughborough (Nicky Morgan), just as I learned to do in the two years when she was my boss at the Department for Education, and she is right that we have to tackle underperformance wherever it exists and ensure every child is being offered an academic, knowledge-rich curriculum. I can assure my right hon. Friend that we will take on board and take seriously representations made about the policies in the consultation documents, including those relating to selective education.
My hon. Friend the Member for Bexhill and Battle (Huw Merriman) made the point in an intervention that it is about making the alternative schools just as good as the selective ones, a point also made by my right hon. Friend the Member for Wokingham (John Redwood), who pointed out that grammar and comprehensive schools can coexist with both delivering a very high academic standard, as we see in his constituency.
Since 2010 more pupils have benefited from a core academic curriculum, increased numbers of pupils have a good or outstanding school place, and parents have a wider choice of the type of school for their children, but these opportunities have not yet been spread widely enough. We want to create a meritocracy where every child has access to the education that will take them as far as their talents allow. That is why our consultation document “Schools that work for everyone” is looking at every possible way to provide new good schools, particularly in areas serving the 1.25 million pupils in schools that need to improve.
I worry about those 1.25 million pupils; for them the time is now, which is why we need to do even more than we have been doing over the past six years to improve educational standards for them. I worry about the Social Mobility Commission finding that not one pupil eligible for free school meals in the north-east went to Oxbridge in 2010. I worry about the so-called missing talent—highly able pupils from disadvantaged backgrounds who leave primary school with standard assessment tests results way above the average but who achieve significantly less well than similarly able but more advantaged pupils. Nationally, 78% of level 5 pupils go on to achieve the EBacc, but for level 5 pupils from disadvantaged backgrounds that figure is just 52%.
So I say to the Labour party, “You should worry too. You should be as concerned as we are. You should be looking at every option. You should be asking how we spread the excellence we see in outstanding schools to every part of the country. You should be more concerned about the education these children are receiving than the virtue-signalling that lies at the root of what the Opposition do and say.”
If Opposition Members really care, they will look at the proposals in the consultation document and take seriously the suggestions on how to eradicate inadequate school provision wherever it exists. We will take seriously the responses to that consultation. We will listen to people’s views and understand their concerns, but we will do so on the clear understanding that our joint endeavour is to promote social mobility and ensure that a child’s one chance of an education is not sacrificed on the altar of political posturing.
Question put (Standing Order No. 31(2)), That the original words stand part of the Question.
National Health Service Funding
(8 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
19:00 - The House divided: - Ayes: 213 / Noes: 306 - Question accordingly negatived.
Madam Deputy Speaker (Mrs Eleanor Laing)
I advise the House that Mr Speaker has selected the amendment in the name of the Prime Minister.
Jonathan Ashworth (Leicester South) (Lab)
I beg to move,
That this House notes with concern that the deficit in the budgets of NHS trusts and foundation trusts in England at the end of the 2015-16 financial year was £2.45 billion; further notes that members of the Health Committee wrote to the Chancellor of the Exchequer about their concerns that Government assertions on NHS funding were incorrect and risked giving a false impression; and calls on the Government to use the Autumn Statement to address the underfunding of the NHS and guarantee sustainable financing of the NHS.
I begin by reminding the House that, six years ago, the then Conservative leader promised to
“cut the deficit and not the NHS.”
The previous Chancellor, the right hon. Member for Tatton (Mr Osborne), told us that he would “properly fund public services” and that
“investment in public services would come before tax cuts.”—[Official Report, 27 November 2006; Vol. 453, c. 837.]
Robert Flello (Stoke-on-Trent South) (Lab)
Will my hon. Friend give way on that point?
Robert Flello
My hon. Friend is most generous. He might have missed something. Did the Chancellor not say that he would wipe out the deficit by 2015?
Jonathan Ashworth
My hon. Friend is eagle-eyed, and I congratulate him on reminding us that the Government should have balanced the books by 2015, and that they completely failed on that pledge.
Then the new Prime Minister made this promise:
“We will be looking to ensure that we provide the health service that is right for everyone in this country.”—[Official Report, 7 September 2016; Vol. 614, c. 333.]
Fine words, but it is by their deeds that they shall be known. What did we actually get? An NHS that is going through the largest financial squeeze in its history. Far from protecting the NHS through the years of this Tory Government, NHS spending will represent an average annual increase of just 0.9%—a decade of barely any increase in spending despite an ageing population with increasingly complex needs.
Jonathan Ashworth
I will give way in a few moments.
By 2017, NHS spending per head will level out, and, head for head, by 2018 NHS spending will be falling under this Conservative Government. Trusts ended last year in deficit for the second year running—they were £2.45 billion in deficit and they are reported to be heading for a deficit of around £670 million at the end of this financial year.
Helen Goodman (Bishop Auckland) (Lab)
Is this the explanation for the secret plan in County Durham to cut the number of beds for frail elderly people by 20%?
Jonathan Ashworth
My hon. Friend makes a very important point. I will be coming on to those secret plans as I develop my speech.
We will be spending less on the NHS as a proportion of GDP than our European neighbours such as Germany, France and the Netherlands. The NHS maintenance budgets have been repeatedly raided, with billions that had been allocated to capital routinely being switched to revenue to plug gaps.
Jonathan Ashworth
I will give way in a moment.
The maintenance situation has got so bad that the NHS faces a backlog of £5 billion in repairs.
Jonathan Ashworth
I will give way in a moment. The former Education Secretary needs to calm down, Madam Deputy Speaker.
Public health budgets, which fund projects to tackle teenage pregnancy, excessive alcohol consumption, sexually transmitted infections and substance misuse and to provide anti-smoking interventions, will have been cut by 9.7% by the end of this Parliament. That is a completely false economy leading to greater demands on the acute sector. As my hon. Friend the Member for Worsley and Eccles South (Barbara Keeley) so brilliantly outlined last week, the adult social care budget has been slashed.
Sir Simon Burns
I am so grateful to the hon. Gentleman. The House would take him somewhat more seriously if he pointed out that, by 2019-20, the real-terms increase in spending on the health service will be £10 billion. During the last election, his party promised to increase spending in this Parliament by only a quarter of that— £2.5 billion.
Jonathan Ashworth
The right hon. Gentleman was the Minister who took the Health and Social Care Act 2012 through this Parliament, and who wasted £3 billion on an unnecessary top-down reorganisation. He should be apologising to the House, not making those comments.
Several hon. Members rose—
Jonathan Ashworth
No, I want to make a bit of progress.
We are seeing unprecedented cuts to social care, which means that the number of people aged over 65 accessing publicly funded social care will fall by 26%. UK public spending on social care is set to fall to less than 1% of GDP by the end of this Parliament.
Just yesterday, Baroness Altmann, the former Conservative pensions Minister who was appointed last year to great fanfare by David Cameron, said that we are “sleepwalking into a crisis” and that the NHS will not be able to pick up the pieces of a “broken system”.
Jonathan Ashworth
I have given way to the right hon. Gentleman. [Interruption.] He can check Hansard tomorrow.
Gloria De Piero (Ashfield) (Lab)
Does my hon. Friend agree that when funding is cut, our hospitals seek to raise cash in other ways, such as the unacceptable level of car parking charges at our hospitals—charges which the Government promised before the last election to clamp down on?
Jonathan Ashworth
My hon. Friend is running a brilliant campaign on that. I hope that when the Minister responds, he will reply to that point.
Jonathan Ashworth
I shall make a little progress because many other Members want to speak and I want to give them a chance.
The scale of the financial pressures engulfing the NHS are such that the chief executive of NHS Providers, Chris Hopson, said recently:
“The gap between what the NHS is being asked to deliver and the funding it has available is too big and is growing rapidly.”
The King’s Fund said, with respect to the NHS deficit, that
“it signifies a health system buckling under the strain of huge financial and operational pressures.”
In the most damning assessment of the Government’s handling of the NHS, the National Audit Office concluded today that financial problems in the NHS
“are endemic and this is not sustainable.”
Even the former Health Secretary, Andrew Lansley, said that
“in 2010 we knew we had to implement a tight budget squeeze for five years, but we never thought it would last for ten.”
David T. C. Davies
Surely the hon. Gentleman has seen the report from the Nuffield Trust on the four health systems of the United Kingdom, which shows very clearly that there is only one part of the United Kingdom that has seen a real-terms cut in NHS expenditure, and that is Wales under a Labour Government.
Jonathan Ashworth
There will be a cash injection in Wales in 2017, whereas spending per head in the English NHS will be levelling out and then falling in 2018.
Joan Ryan (Enfield North) (Lab)
In Enfield we are short of 84 GPs going forward and we have just had a hospital crisis at the North Middlesex hospital, where there were not enough doctors for our A&E to be safe for patients, yet the only thing we hear about is the sustainability and transformation plan locally which, as far as we can see, is not only secret but about taking £22 billion out of the NHS.
Jonathan Ashworth
My right hon. Friend is right and she is a brilliant campaigner for the health service in Enfield. The points that she makes about the staffing crisis in the NHS are well made. I hope that the Secretary of State will respond to her.
Things are so bad for the Health Secretary that even the NHS chief executive told the Health Committee that
“2018-19 will be the most pressurised year for us…will have negative per-person NHS funding growth.”
Those were the chief executive’s words. Will the Health Secretary sit up and listen, and respond to the chief executive, or will we get what we saw in the Sunday newspapers—briefing against him? We heard that the Government are “gunning for” Mr Stevens and are going to “fix” him. I hope the Secretary of State will repudiate that briefing when he responds to the debate and distance himself from it.
The only people who do not appear to accept the need for more money for the NHS are the Prime Minister and the Secretary of State. We anticipate what the Secretary of State will tell us from the Dispatch Box. The right hon. Member for Chelmsford (Sir Simon Burns) alluded to it and I will now answer his question. The Secretary of State will not only tell us that we have a generous, munificent Conservative Government who have given the NHS the money it asked for, but persist with the fiction that the NHS is receiving an extra £10 billion. However, we all know—and I suspect that the Secretary of State knows, because he now distances himself from the figure when he does interviews—thanks to the Health Committee and others that this £10 billion claim is bogus. It is a claim universally derided and discredited, apart from in the drawing room of 10 Downing Street.
Jonathan Ashworth
It will be a pleasure to give way to the former Education Secretary.
Michael Gove
The chief executive of the NHS, whom the hon. Gentleman has just mentioned, welcomed that additional £10 billion and said that it gives the NHS the extra headroom we need. Will the hon. Gentleman repudiate his criticism now and make it clear that he associates himself with the chief executive of the NHS in welcoming that £10 billion of extra funding?
Jonathan Ashworth
The chief executive’s comments to the Select Committee speak for themselves. Talking of repudiation, when are we going to get £350 million a week, or were the Tories typically saying one thing before the people voted and something completely different after they had had their say? That is what the ex-Education Secretary should be telling us.
Let me remind the House what the Health Committee said. I see the hon. Member for Totnes (Dr Wollaston) in her place, and she said:
“The continued use of the figure of £10 billion for the additional health spending up to 2020-21 is not only incorrect but risks giving a false impression that the NHS is awash with cash.”
She is sitting only a little further down from the right hon. Member for Surrey Heath (Michael Gove). Perhaps he can have a word with her if he disagrees.
The Secretary of State hopes we do not notice that he is stretching the timeframe over which he presents this funding allocation. He hopes we do not notice that NHS spending has been redefined by the most recent spending review. He hopes we do not spot that he is cutting billions from public health budgets and other Department of Health funding streams—a £3 billion cut. But we have noticed.
Jonathan Ashworth
In a few moments.
We have spotted the Secretary of State’s conjuring act because we have seen this Tory trick before—robbing Peter to pay Paul. The result of this trick is cuts and underfunding, more pressures flowing through to the frontline, and, as the NAO said,
“Financial stress…harming patient care”.
In all our constituencies we see ever-lengthening queues of the elderly and the sick waiting for treatment. Across the board, we see the worst performance data since records began.
Jonathan Ashworth
What world is the Secretary of State living in? Half a million patients have waited for four hours or more in A&E in the past three months—the worst performance for this time of year for more than a decade—and he says it is nonsense. Some 350,000 of our constituents are waiting longer than the promised time for elective treatment—some have been waiting more than a year—and he says it is nonsense. Delayed discharges from hospitals are at record levels, and he says it is nonsense. The number of people waiting for 12 hours or more on trolleys has increased by over 700% since 2011-12.
Anna Soubry (Broxtowe) (Con)
Will the hon. Gentleman tell the House why it is that, after 12 minutes, he has yet to praise all our hard-working doctors, nurses and other health professionals? Why is he constantly talking down our great NHS, including the hospitals in Leicester?
Jonathan Ashworth
I praise the hard-working staff in the NHS every day of the week, but I rather suspect that staff in the NHS will have more sympathy with the position I am outlining than with the right hon. Lady’s position, not least when, according to surveys, 88% of NHS staff think that the NHS is under the most pressure they can remember, and 77% think that there is less access to resources, putting the quality of patient care and clinical standards at risk. That, I say to her, is what NHS staff are saying.
Mr Jackson
Perhaps I can just allow the hon. Gentleman to break off from reading his press release. I think we are moving towards a consensus on this issue, in that we do need to integrate acute clinical care and adult social care, and I understand that. In that vein, why was it that, in 13 years, when there was significant demographic change, the Labour Government failed to bring forward a better care fund or a precept for social care?
Jonathan Ashworth
It beggars belief! We tripled investment in the NHS, and the hon. Gentleman and his hon. Friends voted against every penny piece. When we left office, we had the best waiting times and the highest satisfaction levels on record. That is the difference between a Labour Government and a Conservative Government on the NHS.
Henry Smith (Crawley) (Con)
Can the hon. Gentleman explain, then, why the Labour Government closed the maternity and accident and emergency departments at Crawley hospital?
Jonathan Ashworth
Well, reconfigurations are always going ahead. [Interruption.] If Conservative Members are so concerned, I look forward to the hon. Gentleman campaigning against the STPs for his area, when they are published in a few weeks.
Several hon. Members rose—
Jonathan Ashworth
I am going to make a bit of progress, because I am aware that Members want to speak.
We have seen what the reality of six years of Tory underfunding and cuts in our NHS are all about, and there are more stealth cuts to come, which will add further pressures. For example—these are small things, but they all add up—cuts to the Care Quality Commission mean that it will increase its fees for NHS hospitals, other trusts and other providers. Some trusts will have to pay over £100,000 as a result of these cuts. Reductions in education and training tariffs will put more pressures on trusts and on the frontline. In the House the other week, we debated how cuts to community pharmacies will lead to increased demands on the NHS.
Only last week, news slipped out about the privatisation of NHS Professionals. A body that makes a profit for the NHS and ploughs that back into the NHS is going to be privatised, and that profit will presumably go to private companies.
The combination of all these cuts and privatisations, the utter failure to deal with the crisis in adult social care, and the lack of planning for an ageing population with complex needs will directly lead to greater demands on the NHS, bigger cuts, and deficits across the board. It is in this context that the NHS is also expected to find £22 billion of so-called efficiencies and to redesign services across England completely as part of the sustainability and transformation process.
Where sustainability and transformation plans are about transforming services in the interests of patient care, reversing fragmentation and ensuring more collaboration in geographical areas, we will consider them carefully. We will want to look at every single STP to see whether those plans are genuinely jointly owned, and whether they tackle the crisis in social care, guarantee better access to care for the long term, and are transparent and financially viable. What we know so far, though, is far from reassuring, because we can see from the 19 or so STPs that have been published that the ground has shifted. It has become obvious that what began as a project to transform services for patients and build up community services is now more about closing the financial gap:
“Of course, the driving force behind STPs is the emergence in the last two financial years of substantial deficits.”
Those are not my words, but those of Andrew Lansley just a few weeks ago. The STP areas that we have seen so far have been racking up shortfalls of about £10 billion that can be filled only by cuts to hundreds of beds, closing hospitals, downgrading A&Es, downgrading maternity wings and withdrawing treatments.
Helen Jones (Warrington North) (Lab)
Does my hon. Friend agree that proposals to downgrade A&E in an area such as Warrington, which is surrounded by motorways as well as containing many people who suffer from health deprivation, is a recipe for disaster? If people have to travel further for emergency care, that will not improve their care in any way.
Jonathan Ashworth
My hon. Friend is extremely knowledgeable about the health service and has been campaigning vigorously on the STPs. She is completely right. We will see hospitals merged in the Merseyside area and in London, hospitals lost in Durham, and efficiencies found by changing staffing levels. In fact, the STP for Cheshire and Merseyside, the area that she represents, talks enticingly of
“Exploration of a Factory Model”.
Doesn’t that sound nice?
With cuts to services and rock-bottom staff morale, we have the Sports Direct approach to the NHS, with the Secretary of State playing the part of Mike Ashley. The public deserve better than this bargain basement approach. Scaling back the acute sector while not investing in the community sector simply does not work. The Prime Minister might have ruled out extra funding—
Michael Gove
I have listened with great interest to the hon. Gentleman. He has spoken eloquently of his concerns about the NHS, but has not, in the course of 18 minutes, put forward a single positive policy or explained where a single penny of additional funding would come from. He has secured the time for this debate, so would he at least put forward a positive policy for the NHS, or a suggestion as to where the money should come from?
Jonathan Ashworth
The right hon. Gentleman really does have a brass neck. We still do not know when we are going to get the £350 million from him, but next time he intervenes perhaps he will tell us.
Rosie Cooper
Perhaps the right hon. Member for Surrey Heath (Michael Gove) would like to tell me how cutting the A&E at Southport and Ormskirk hospital and giving local community and acute services to Virgin Care can be a positive story for the NHS.
Jonathan Ashworth
This is exactly the sort of point that we are making; my hon. Friend is absolutely correct. That is why we need to look carefully at all these STPs. Of course, we do not know much about them at the moment, because all we see is glossy brochures that tell us that everything is going to be all right and not to worry. We want transparency. The Secretary of State should insist that every single STP is published and that we have the details of the cuts that will be made in our communities.
Jonathan Ashworth
I give way to my right hon. Friend the former Chief Whip.
Dame Rosie Winterton
Is not one of the problems with local planning the recruitment of GPs and the lack of GPs locally? Would it not help if we were to amend the Health and Social Care Act 2012 so that clinical commissioning groups and NHS England could provide directly salaried GPs instead of being prevented from doing so, as is the case at the moment? That is a practical example of something that would save money and increase the local provision of GP services.
Jonathan Ashworth
My right hon. Friend is absolutely right. Morale among GPs is at an all-time low. She identifies another problem that has emerged because of the 2012 Act. I hope that the Minister will respond to her important point.
Jonathan Ashworth
I will give way to my hon. Friend, but then I will not take any more interventions.
Helen Jones
Is my hon. Friend aware that the Cheshire and Merseyside group has not only refused to publish details about the STP, but refused my Freedom of Information Act request for information about the meetings that were held on the STP and who was present at them? Does that not simply give rise to suspicion that this whole process is being driven by cuts rather than the need to improve care?
Jonathan Ashworth
My hon. Friend is absolutely right. I will now make a bit of progress because I know that other Members are anxious to speak.
The Chancellor should respond tomorrow to the growing body of evidence that the NHS has not been given the money that it needs. Tomorrow, we need an end to the scandal of crumbling hospitals. Tomorrow, the Chancellor must put right the Government’s greatest betrayal on adult social care. Tomorrow, the Government must deliver the long-overdue investment that our NHS needs.
Jonathan Ashworth
What sense does it make to carry on cutting inheritance tax, capital gains tax and corporation tax, at a cost of billions to the Exchequer, while at the same time failing to fund our national health service or to give social care the money it demands? The Prime Minister lets the CBI know that she is prepared to give away billions extra in corporation tax, but she tells us that there is no more money for the NHS. The Chancellor will be prevented from acting tomorrow not by financial constraints, but by the ideological constraints that the Government have placed on themselves. It is time to give the NHS the funding that it needs. I commend the motion to the House.
The Secretary of State for Health (Mr Jeremy Hunt)
I beg to move an amendment, to leave out from “House” to the end of the Question and add
“welcomes the Government’s investment, on the back of a strong economy, of significant additional funding and resources each year for the NHS during the 2015 Parliament; notes that this settlement was frontloaded at the specific request of the NHS in NHS England’s own plan to deliver an improved and more sustainable service, the Five Year Forward View; and further notes that the NHS will receive a real terms increase in funding in each year of the Spending Review period, while the Labour Party’s Manifesto at the last election committed to only an extra £2.5 billion a year by 2020, far less than the NHS requested.”.
As I did in last week’s debate on social care, I start by recognising the fantastic work done by NHS staff up and down the country. This autumn, I met a mental health nurse who told me how she had had to cope with the pressure of one of her patients throwing himself off a bridge the day after a consultation. I am sure that all Members have stories of the incredible dedication of NHS staff—not just people doing their jobs, but people putting their heart and soul into their work, staying late, going the extra mile, and sacrificing home time and holidays to be there for patients. As I did last week, I also recognise the 50,000 NHS staff from EU countries, including 26,000 low-paid staff, who do a brilliant job. Today we have heard concerns about funding, A&E—
Paul Farrelly (Newcastle-under-Lyme) (Lab)
Will the Secretary of State give way?
Mr Hunt
I will give way in a moment, but I just want to finish this sentence, if I may.
We have heard concerns about funding, A&E performance, waiting times and morale, and I want to answer them all. There are many pressures in the NHS, but I also want to recognise some successes, because one of the things that is most damaging to morale is not giving credit where it is due.
Paul Farrelly
Can the Secretary of State explain why he has made scores of redundancies in north Staffordshire? In my 15 years as an MP, I have never seen the local NHS in such a meltdown, with a scorched-earth policy of cuts and closures, and more to come with next year’s still-secret STP. When will the Government realise that pressures on social care and the NHS are such that those services are unsustainable without decent further funding and investment?
Mr Hunt
As the hon. Gentleman knows, those things would certainly be unsustainable if we had followed the Labour party’s investment plans at the time of the previous general election. If he wants to know what is happening to staff, let me tell him that in the period I have been Health Secretary, we have got 5,000 more doctors and 10,000 more nurses. That is what happens when we have a Government who are prepared to invest in the NHS.
The shadow Health Secretary talked about A&E—he is right to say that we are not hitting the target, and we are doing something about that—but he did not tell the House that, since Labour left office, we have recruited 1,200 more doctors for A&E departments, which is a 25% increase, including a more than 50% increase for consultants. Every day, we are seeing 2,500 more people within four hours.
Dr Rosena Allin-Khan (Tooting) (Lab)
Will the right hon. Gentleman give way?
Dr Allin-Khan
I am a junior doctor in A&E, of which the right hon. Gentleman speaks, and I can say that morale is at an absolute all-time low. We have a recruitment and retention crisis in A&E. We are losing all the fantastic staff whom we have been able to recruit because this Government are not recognising and accepting the fantastic workforce on our A&E frontline. All the doctors are leaving.
Mr Hunt
With respect, the hon. Lady might be on the wrong side of the House, because I started my speech by recognising the brilliant work done by doctors and nurses, something that the shadow Health Secretary conspicuously failed to do. Let us look at her own hospital: since 2010, St George’s has—[Interruption.] I do not know whether she is interested in hearing my response to her intervention. Since 2010, her hospital has had 884 more nurses and 240 more doctors, and her CCG had a £10 million funding increase this year.
Dr Allin-Khan
I thank the right hon. Gentleman for allowing me to speak again. I shall refer at length to St George’s hospital in my speech, but it is very unfair of him to bring it into this debate. It is because of this Government that St George’s hospital is operating at a £50 million deficit. It is because of this Government that we are now in special measures. It is—
Madam Deputy Speaker (Natascha Engel)
Order. The hon. Lady is hoping to catch the eye of the Chair later in the debate. As it is, there will be a five or four-minute time limit, so Members who intervene must do so very briefly and not very frequently. If they do not do so, I am afraid that they may not be called to speak.
Mr Hunt
The shadow Health Secretary also did not talk about cancer. In 2010, we had the lowest cancer survival rates in western Europe. Since then, we have referred for cancer tests 2,200 more people every day, and 100 more people are starting cancer treatment every day. The cancer charities say that this is saving 12,000 lives a year. On mental health, he did not mention the fact that we are treating 1,400 more people every day, with record dementia diagnosis rates.
Mr Jackson
Would not Opposition Members be a little more straightforward and honest about the wider context if they admitted the demographic challenge that this Government face, as they would have faced? The number of over-60s will increase by 50% in the next 15 years. Should they not also admit that the private finance initiative was an appalling millstone—£64 billion —to bequeath to this Government? That has had an impact on frontline care.
Mr Hunt
My hon. Friend is absolutely right to raise that point. People will be astonished to hear Labour Members wasting their time talking about a privatisation of the NHS that is not happening when they were responsible for PFI, the worst possible privatisation that has done such enormous damage.
Another point that the shadow Health Secretary did not mention was the quality and safety of care in our NHS that Labour left behind. The Francis report revealed massive problems—short staffing, a culture of denial and cover-ups—and they were not just at Mid Staffs but, as we now know, at Basildon, Morecambe Bay and many other trusts. Since we have been in office we have changed that. We have put 31 hospitals into special measures, which is more than 10% of hospitals across the entire NHS, and we have recruited record numbers of doctors and nurses.
I want to tell the House about one hospital that was put into special measures. Care was unsafe at Wexham Park in Slough—so much so that fewer than half the hospital staff were prepared to recommend the care provided there to their own friends and family—but it has gone from having six of its eight clinical areas rated as requiring improvement or inadequate, to having all eight of them rated as good or outstanding. It has come out of special measures, as have 15 hospitals in total, and we should all commend the staff who have worked incredibly hard to turn around those hospitals.
Jenny Chapman (Darlington) (Lab)
The right hon. Gentleman has the nerve to talk about the inheritance from a previous Administration, when what we inherited in 1997 was people dying on waiting lists of more than 18 months for heart operations.
Mr Hunt
I have often from this Dispatch Box been prepared to praise some of the achievements of the last Labour Government. They did bring down waiting times, but they did not focus on the quality and safety of care.
What we now know from the CQC’s new regime, which has just finished its first round of inspections, is that 56% of our hospitals are good or outstanding. One could say that it is disappointing to know that 44% of hospitals are not, but to those who would use that as a political weapon I say this: we are the only country in the world brave enough to set up an independent inspection regime, and if we want to have the safest, highest quality care, the first thing we need to know is where it is good and where we need to improve it. I thank the chief inspector of hospitals, Professor Sir Mike Richards, for his outstanding work in raising quality.
Joan Ryan
The right hon. Gentleman talks about the inspection regime, but I think I am right in saying that it was not something he and his Government introduced. The Care Quality Commission was introduced by a Labour Government, as far as I am aware. As I know from North Middlesex hospital, hospitals end up in special measures because they are underfunded and under-supported, and cannot get the doctors they need.
Mr Hunt
The right hon. Lady is right that the Care Quality Commission was set up by the last Labour Government, but it did not have independence from the Government in its inspection reports. When we legislated for that, Labour tried to vote it down. We got it through and changed the inspection system, and it is working extremely well.
I want to move on to the substance of the debate, which is about the funding of the NHS. I congratulate the hon. Member for Leicester South (Jonathan Ashworth) on his courage—indeed, his chutzpah—in confronting the issue of funding, despite inheriting a Labour policy to cut NHS funding by £5.5 billion a year by the end of the Parliament. He is right that there has never been greater financial pressure—we have had the financial crisis in 2008, the deficits and the growth in demand from the ageing population—but he must accept that that makes it all the more extraordinary that Labour wanted to cut the NHS budget in 2010 and to cut it from the current levels in 2015. I simply say that we could, as a Government, have chosen to cut NHS funding from this year’s level by £1.3 billion, as under Labour’s plans, but we would have had to lay off 11,000 doctors or 40,000 nurses.
Andy Burnham (Leigh) (Lab)
The problem with the Conservatives’ script is that they talk about NHS funding, but they completely neglect social care. There can be no debate about the fact they have cut social care every year for the last six years, taking support away from half a million older people, many of whom are now trapped in hospital beds. Greater Manchester says that it has a shortfall of about £80 million in social care; the figure is £1 billion nationally. Has the Secretary of State raised this issue with the Chancellor? Has he made an emergency bid for funding? Will there be more money for social care this year?
Mr Hunt
That is not the problem with our script; it is the problem with the right hon. Gentleman’s script, because as shadow Health Secretary he sanctioned a policy that would have given the NHS £1.3 billion less this year, and at the last election the then shadow Chancellor said he would give not a penny more to local authorities, whereas we are seeing social care funding go up by £600 million this year. More money is going into the NHS and the social care system under a Government who are committed to funding them both.
What is especially wrong with the argument made by the shadow Health Secretary, whom I welcome to his place for his first Opposition day debate, is his suggestion that the Government have not honoured their promises to the NHS. What did the independent commentators say at the time of last year’s spending review? Simon Stevens, whom he quoted, said
“our case for the NHS has been heard and actively supported.”
NHS Providers, which he quoted, said it was
“a good settlement for the NHS.”
The King’s Fund, which he quoted, said it was
“a good settlement for the NHS”.
In fact, because of the Government’s commitment to the NHS, we are spending 10% more on it as a proportion of GDP than the OECD average—that is more than Norway, Finland, Korea, Australia and New Zealand.
Sir Simon Burns
Does my right hon. Friend agree that without that investment since 2009-10 to last year there would not have been the 1.6 million more operations within the NHS that benefit all our constituents?
Mr Hunt
My right hon. Friend is right. I congratulate him, because he was part of the shadow Health team that persuaded the then shadow Chancellor and Leader of the Opposition that we needed to make that investment, thanks to which the NHS is doing 5,000 more operations every single day.
Michael Gove
My right hon. Friend has been very gracious in taking interventions from all sides, and also in citing independent voices. Has not the independent King’s Fund also pointed out that the sustainability and transformation plans that he is overseeing are the “best hope” of securing long-term improvement for both health and care in this country? Does he agree that the Opposition should pay rather more attention to those independent experts, rather than repeating their own press releases?
Mr Hunt
My right hon. Friend is right that just occasionally we should listen to experts—but only very occasionally. In the spirit of listening to experts, and as the Leader of the Opposition is here, I will tell my right hon. Friend something else the King’s Fund has said that he will agree with, which is that
“claims of mass privatisation were and are exaggerated.”
Let us not go chasing down rabbit holes.
The result of this Government’s commitment to the NHS is that real-terms spending per head has gone up by 4.6%, which is double the rate in Scotland and three times the rate in Wales. The hon. Member for Leicester South also mentioned the National Audit Office. He did not mention that the numbers quoted in the NAO report are last year’s figures. He chose not to mention this year’s numbers, which were published last week. They show that 40 fewer trusts are in deficit. Yes, a year ago, half of trusts were missing their financial plans, but now 86% are hitting those plans.
The latest figures, from Friday, show that the deficit will fall 73% from last year, and even lower than the year before. Why is that? It is because of a sustained effort by the NHS to tackle the problem. [Interruption.] The Opposition do not want to hear this, but the truth is that the NHS is gripping the very problem the shadow Health Secretary called a debate on. Agency spend, one of the biggest challenges, is on track to go down from £3.7 billion to less than £3 billion. The rates paid for agency nurses are down 18% on a year ago, and for locum doctors they are down 13%. Our procurement changes are on track to save half a billion pounds. The money we raise from international visitors is up three times, from £84 million to £289 million.
Keith Vaz (Leicester East) (Lab)
It is important that we focus not just on the level of spending but on where we spend the money. With long-term conditions such as diabetes, is it not essential to focus on preventive work, which in the long term will save the national health service a huge amount of money?
Richard Drax (South Dorset) (Con)
I congratulate my right hon. Friend on the calm and dignified way he is dealing with this debate, as compared with the Opposition. May I put in a plug for local community hospitals, not just in my constituency but right across the country, and how vital their retention is for good quality care in the future?
Helen Goodman
Since the Secretary of State thinks community hospitals are so important, will he guarantee that the Richardson in Barnard Castle will stay open?
Several hon. Members rose—
Mr Hunt
I will make some progress, but I will find time to give way to hon. Friends who I know want to come in.
I want to pick up on a particularly extraordinary comment made yesterday by the shadow Health Secretary. He said:
“aggressive efficiency targets have contributed to deficits”.
That is a curious thing to say, first because his own spending plans would have meant £5.5 billion more efficiencies. If he thinks our plans are aggressive, I just wonder how he would describe Labour’s approach. Secondly, I know we are all Corbynistas now, but basic economics suggests that efficiency plans do not increase deficits, but reduce deficits. That is what we need to do in the NHS, because we want the money to go to patient care.
There is another danger in the shadow Health Secretary’s argument, a trap that is very easy not just for him but for many commentators to fall into: the suggestion that this is a uniform problem across the NHS that it is powerless to grip without further Government intervention. The reality is that there is huge variation across the system. The deficits at good or outstanding trusts are five times less than the deficits at other trusts. If all trusts had the same financial performance as the good or outstanding ones, we would have a surplus of nearly half a billion pounds. Half the deficits are from just 22 trusts. We see this variation on a very specific level. For example, the amount paid for a pair of surgical gloves, which are very important to all hospitals, is £1.27 in some hospitals and just 50p in others. As for waiting lists, of 1,000 people who are waiting more than a year for their treatment, which is unacceptable, there is just one person from an outstanding trust who has been waiting that long. Some 93% are from trusts that require improvement or are inadequate. This is why we have a huge programme to support and improve those trusts and deal with the challenges they face.
Alex Chalk (Cheltenham) (Con)
On financial management, does the Secretary of State recognise that in Labour-run Wales agency staff spend has increased 60% in the past year? That compares with the tough measures taken in England to crack down on wasteful spending.
Andy Burnham
The Secretary of State is trying to blame hospitals for the deficit, but the point is that the spend on agency staff has ballooned in England over the past six years. The reason is that the Government, and their predecessor, cut nurse training places and left hospitals in the grip of private staffing agencies. It is therefore simply not fair of the Secretary of State to stand at the Dispatch Box and blame hospitals for a problem of the Government’s making.
Mr Hunt
I am not blaming hospitals. We are supporting hospitals to deal with the problem. The root cause of the problem, set out in the Francis report, was hospitals covering up bad problems. We said no to that and said that we were going to sort it out by having more nurses on our wards. That is why, in the four years that I have been Health Secretary, we have had 10,000 more nurses on our wards.
Simon Hoare (North Dorset) (Con)
Does my right hon. Friend agree that the public are finally starting to see through the usual Labour smokescreen that is high on rhetoric and low on alternative solutions, with very patchy and poor delivery when Labour is given the chance? My right hon. Friend’s approach to the health service—a quiet delivery of change and proper funding—is what the public are looking for.
Mr Hunt
It is noticeable that the two potential solutions we have heard have been from Opposition Back Benchers—the right hon. Member for Leicester East (Keith Vaz) and the former shadow Chief Whip, the right hon. Member for Doncaster Central (Dame Rosie Winterton)—and not from the Opposition Front Bench. My hon. Friend makes an important point.
The shadow Health Secretary is right to hold the Government to account for the funding of the NHS and the social care system, but it is a big mistake to distil all issues around the NHS into the simple issue of money. That subcontracts the responsibility for safe, high-quality care to politicians. If we are going to be the safest and the best quality system in the world, that has to be everyone’s job, everyone’s focus and everyone’s commitment—politicians, yes, but managers, doctors, nurses, porters, healthcare assistants and every single person working in NHS.
On the way forward, we first need to move to accountable care organisation models and the “Five Year Forward View”, including the STP process. The shadow Health Secretary called STPs “secret plans”, but in fact 28 of the 44 have been published and the rest will be published before Christmas. Many in the House, on both sides, objected to the Health and Social Care Act 2012 because they felt it did not do enough to support integrated care. Well, now we have a process that is bringing together the NHS and the social care system, acute trusts and primary care, at a local level. That is a big prize and we should support it, not try to make political capital out of it.
Robert Flello
In Stoke-on-Trent, the CCGs sit on the STP group. We have still not seen the report, but we have seen an executive summary. When the STP group suggests one thing, the CCG undermines it by closing community hospitals and cutting community beds. They are not working together; they are working against each other.
Mr Hunt
That is exactly what we need to sort out. We have the STP process to stop people doing their own thing, instead of having a co-ordinated, well-planned strategy. If we stick with this process, embrace innovation and technology and retain a relentless focus on safety and quality of care, in this Parliament we will see a million more people accessing mental health treatment every year; 5,000 more doctors working in general practice and a transformation of services through GPs; a new four-week cancer waiting time standard that will save 30,000 lives a year; more failing hospitals turned around; the weekend effect tackled; more doctors and nurses; and an NHS staying true to the promise made to patients in 1948 that safe, high-quality care would be there for everyone, regardless of income. That is what this Conservative Government will deliver, and I urge the House to support the amendment.
Several hon. Members rose—
Madam Deputy Speaker (Natascha Engel)
Order. Before I call the SNP spokesperson, I must inform hon. Members that, including her speech, we have calculated, generously, that every speaker will have five minutes, but we will probably have to go down to four minutes at some point.
Dr Philippa Whitford (Central Ayrshire) (SNP)
Does that include five minutes for me also?
Madam Deputy Speaker
Obviously the hon. Lady has no speech limit, but the speech limit has been calculated with her mind. I am just saying that the longer someone speaks for, the less time everyone else will have.
Dr Philippa Whitford (Central Ayrshire) (SNP)
Okay, well that is fairly disappointing, given what I have prepared.
UK-wide, the NHS faces sustainability issues. One of the key issues is the increase in demand from an ageing population and the increasing complexity of those demands. The way to tackle that demand is through public health and social care that ensures that those people do not end up in the most expensive place. Secondly, we have a lack of staff, both nurses and doctors. The lack of training nurses has been referred to. We also face the threat of losing some of our staff from the EU. The third threat to sustainability is money, but the money is the one we can fix, because money is a decision; the others will take a decade each to fix—by training more nurses and doctors, preventing illness and finding better ways to look after an ageing population.
As I have said in the Chamber before, I welcome the idea of STPs, because they should mean a return to place-based planning and integration and a move away from fragmentation and competition. The problem is, however, that they have to be based on patient-centred care, whereas, according to what is leaking out, they are being discussed on the basis of budget-centred care. We heard in the Health Committee that the STP groups were being given a figure that they had to meet by 2021 and then were working back from that. That will never work.
If we want to decrease inefficiency and increase efficiency we need to target the inefficiencies in the system, not just take an axe to the whole thing. When hospitals or GPs run out of money and take urgent action, it will be poorly thought out and immediate-survival action. We need to look at where the fat is and at the natural inefficiencies in the system, and some of that comes down to the lack of integration. STPs are a great opportunity but an opportunity we will look back on as missed if we do not do it properly.
The Secretary of State says that there is no privatisation in the NHS, but there certainly is marketisation and outsourcing. I graduated in 1982, so I have lived through every single iteration from both sides and three Governments. In 1982, we were just skimped. Basically, the NHS got 5% of GDP and it dropped to 4.5% over the ’80s. Instead of increasing that to where it is now, what we had was constant redesign.
The first was the internal market and GP purchasing. A GP would refer to our clinic, but if I decided the patient was not surgical and I referred them to gynaecology, the GP would refuse to pay. What started to happen? Surgeons and clinicians began sending the patient back to the GPs, so that they would refer them. Of course patients fell through the cracks; some never got that second referral and things were missed.
After the purchaser-provider split, we started to change the whole shape. We went from 100 health authorities to 300 primary care trusts, even though the leaders of the PCTs earned the same money as the leaders of the health authorities. People were made redundant and transitional change was hugely expensive. In the mid-2000s, we went from 300 PCTs to 150—again with redundancy and transition. As we move on, we start to see the private finance initiatives. As has been said, the NHS has paid over £60 billion for £11 billion-worth of buildings. That was not an effective thing to do.
Eventually, of course, we come to the Health and Social Care Act 2012, which got rid of the 150 PCTs and replaced them with 211 clinical commissioning groups. This is described as “putting power in the hands of the GPs”, but following a freedom of information request I know that less than 18% of CCGs have a GP majority on them. Some 47% of CCGs do not even have a clinical majority, so the idea that CCGs give power back to primary care is, I am afraid, a complete fallacy.
What we have seen, I am afraid, has come from all Governments. It was the Labour Government who took the purchaser-provider split and introduced independent treatment centres, giving them block grants. All the talk about patient choice was not really patient choice at all: the GP had to send the patient to the ITCs for their hips, because it had already been paid for. To try to counteract that, we have seen payment by results, which was the forerunner of the tariff. What that did was increase activity, so it helped with waiting lists and waiting times, but what we now have is activity that is just growing and growing. Hospitals get paid for activity, not for whether that activity is right.
In Scotland, we abandoned trusts in 2004, and we abandoned primary care trusts in 2009. Let us look at our costs book, which publishes the costs of administration. This is not just the costs of the market; it deals with all the administration of the NHS. Ours has fallen from 7.6% in 2006-07 to 6.7% in 2015-16. When it comes to the Department of Health or NHS England, no one has any idea. A piece of work was done for the Department of Health in 2005, which estimated admin costs at that time as 14%. I suggest that the current market is an awful lot more complex than it was then.
I think some things can be done around procurement. In Scotland, our national procurement gives hospitals a choice of 9,000 items. The supply chain in England has 600,000 items. It is not limiting; it is not national procurement. Our logistics division, which delivers that, will pick items per ward and deliver them all the way from a central depot to that ward. That allows us to cut some of the costs, as suggested in the Carter review.
We absolutely need to keep agency prices down. It is important to try to keep staff on a staff bank rather than get them through agencies. Why are we not asking the bigger question? Why are nurses choosing to work for an agency rather than the NHS? Is it that they earn more money? Is it flexibility? Is it family-friendliness? Would it not be better to look at how we let them work, so that they work for us rather than feeling that they have to go and work in an agency? From the point of view of job quality and job satisfaction, they would all rather be in one place than be in a different place every week.
There are things that could be done. There could be a better use of community pharmacies, and a better use of community hospitals for “step up” and “step down” services. It is crucial that we fund social care so that elderly people are looked after in their own homes. I think that STPs have potential. However, I ask the Secretary of State not to go on and on with marketisation, given that no cost-benefit analysis has ever been carried out and there is no evidence of benefit from it. The NHS could save an amount that is estimated conservatively at £5 billion a year, and that would have a significant impact on the debt.
The right hon. Member for Surrey Heath (Michael Gove) suggested that we needed to bring solutions. I am offering the ones that I can think of from Scotland, and I recommend them to the Secretary of State.
Dr Sarah Wollaston (Totnes) (Con)
It is a pleasure to follow my hon. Friend the Member for Central Ayrshire (Dr Whitford).
I want to touch briefly on the importance of clear data, the current financial position, and the need to agree on a settlement for the future in this House rather than continuing to have such confrontational debates.
I can see how the £10 billion figure has been arrived at: by adding an extra year, starting from 2014-15, and by transferring budgets to NHS England. When the Secretary of State refers to the NHS, he is actually referring to NHS England. He is not including public health. He is not, for example, including Health Education England. However, it is crucial that they are considered. As my hon. Friend the Member for Central Ayrshire said, when we talk about transferring money from public health to the NHS England budget, we are cutting off our ability to control the increase in future demand. We face significant challenges, which we will not address unless we invest in those future services.
We sometimes talk about public health as if it were not frontline care, but it is. We are talking about, for instance, services to help people with addictions and sexual health services—really important costs for the NHS. There is also the challenge of the reduction in Health Education England’s £5 billion budget, £3.5 billion of which is spent directly on the wages of health service doctors who are undergoing training, but also delivering frontline services. Cuts to Health Education England cut us off from future sustainability, because that is the budget that trains, retains and sustains our existing workforce. This is all crucial to frontline services.
The other way in which the £10 billion figure has been arrived at is by changing the baseline from which we calculate real-terms increases. I would say that it has never been more important than it is now for the public to have confidence in the data that we use. Trying to return us to talking about total health spending is not trying to be awkward; it is trying to be honest with the public. It is difficult to argue that more funding for health and social care is necessary if a £10 billion increase has been claimed. It is important that we continue to use the same consistent baselines that have been used in the past, so that the public can see what has happened to total health spending.
I welcome the front-loading of the settlement, and I welcome the fact that the NHS has been relatively protected in comparison with other departments, but the scale of the increase in demand is extraordinary. When Simon Stevens talked about welcoming the increase that had been granted, he made it clear that it was dependent on a fair settlement for social care and a radical upgrade in public health, and those two aspects are lacking.
I think that both sides are correct. I can see how the Secretary of State has arrived at the £10 billion figure, but whenever that figure is used we should also present a figure that refers to total health spending in the way in which it has always been referred to in the past. I think that that would help to build the Secretary of State’s case for an increase in funding as we go forward.
Like others, I hope that we shall see an uplift for social care in the autumn statement, because the impact of social care on the NHS is now profound. There cannot be a Member in the House to whom it has not been made clear by people who come to his or her surgery that the state of the care system is in collapse and providers are in retreat. Even those who can afford to pay are finding it difficult to gain access to care.
Helen Goodman (Bishop Auckland) (Lab)
In my constituency there are some villages where no social care is available because none of the private providers can afford to deliver it. Does the hon. Lady, in her role as Select Committee Chair, know whether that applies in other parts of the country as well?
Dr Wollaston
We know it does, and the CQC report describes social care as being at a tipping-point; it is in a very fragile state and we owe it to all our constituents to try to come together to agree where we go from here. Many have proposed a royal commission to look at future sustainability, but we have had commissions: the Barker commission set out the options, and the House of Lords is looking at future sustainability and the range of options.
I urge colleagues across the House to try to agree, rather than having this continual confrontational debate. The best way forward would be for all parties in this House to agree that this is an enormous challenge. My personal belief is that we should stick with our current very equitable system of state funding of our NHS, look at the various options and agree between us that we need to address this. We cannot keep ducking it; we owe it to all our constituents to adopt a much more constructive tone to our debate.
We know that the current position is unsustainable, and that was reiterated in today’s National Audit Office report. We can continue to shout across the Chamber about how much is spent, but we know this will be a challenge whoever is in power, and I urge all colleagues to focus instead on a different approach. Yes, more can be done within the NHS, but I am afraid that the elastic is stretched far too tight for social care to make any more efficiencies. We now need to work together to see how we can fund this going forward.
Ms Angela Eagle (Wallasey) (Lab)
The NHS in Wirral is facing its gravest crisis, which is why I am grateful for the opportunity to speak in this debate. Cheshire and Merseyside’s so-called sustainability and transformation plan was published last Wednesday, and it is a piece of work that is shocking in its complacency, Orwellian in its use of language and potentially devastating in its consequences.
The Secretary of State has described these plans as open and transparent, but Wirral borough council has had zero involvement in the development of this plan. The first it knew about it was when it was posted on the NHS website last Wednesday.
I want to make three quick observations about the flaws in the STP process, which have become increasingly apparent as it has developed. The first concern is that the NHS has been starved of money and these plans are more about cutting the finances than reconfiguring the services. The second concern is that this has been a top-down process organised in a secretive way by the NHS. The third concern is that the extremely tight deadlines imposed on the process make it impossible to achieve any meaningful consultation or public buy-in.
The plans developed for Merseyside and Cheshire will affect services in Wirral. The plan was published on Wednesday. It confirmed that our local health services have been massively underfunded by this Government to the tune of £1 billion. But rather than providing the necessary resources to meet patient needs, the plan sets out massive cuts. It confirms the existence of entirely new meanings for some familiar words and phrases in the English language as well as elevating management gobbledygook to a form of high art.
In NHS-speak we now know that “sustainability” really means closing all deficits, and in Merseyside and Cheshire this means £1 billion of cuts; “openness and transparency” actually means developing these plans in secret and in total isolation from local partners; and
“the current acute configuration within this footprint is unsustainable”
is gobbledegook for mass hospital closures, mergers and the downgrading of accident and emergency services.
The report aims to make these huge savings by merging existing hospitals across the region, downgrading accident and emergency services and cutting access to maternity provision. It makes the heroic assumption that if care is provided closer to home, services will become cheaper and demand will go down. The report is silent on the future for Wirral acute services, despite its ominous observation that there needs to be a review to
“determine future options for hospital reconfiguration”.
Wirral health trust’s annual report has let the cat out of the bag, however, by confirming that the merger of Arrowe Park hospital, the Countess of Chester hospital and parts of Clatterbridge hospital are being considered. This threatens to leave Wirral devoid of any acute services and to leave my constituents with increasingly difficult journeys if they are to access any acute care at all. It is a fact that Wirral local authority has had zero opportunity to be involved in the development of the plans despite the NHS planning guidelines for STPs asking those NHS managers developing them to
“engage with local authorities and other partners in their development”.
It is a fact that this process has been the opposite of transparent. It is also a fact that the proposals contained within it are unacceptable.
The NHS needs more funding urgently. The STP process must be slowed down so that there can be meaningful consultation. The Government should end the top-down planning in secret and open up the process to involve the public and patients in their local communities, as well as other statutory authorities and staff. That is why I have launched a petition to ask the Government to press the pause button on these plans so that they can be properly considered by patients, the public and staff. It can be found at www.savewirralnhs.com. Please visit and sign the petition. Together we have to fight to save Wirral NHS.
Several hon. Members rose—
Madam Deputy Speaker (Natascha Engel)
Order. Following that public service announcement, I must reduce the time limit for Back-Bench speeches to four minutes.
Andrew Selous (South West Bedfordshire) (Con)
I want to make five constructive proposals to help NHS funding. The first relates to prevention, which we have not heard nearly enough about in the debate so far. It is wholly unacceptable that a third of our children are obese by the age of 11. We have learned today that many children typically consume the equivalent of a bathful of sugary drinks every year. We also know that England and Wales are ranked at D minus in the global fitness matrix, and that Scotland is ranked at F.
If we could get these things right early on in our children’s lifetimes, we would be in a much stronger position. One way of doing that would be to extend the excellent work of St Ninian’s primary school in Stirling, which has pioneered the use of the daily mile. All the children run—if they cannot manage that, they walk—a mile at some point each day. This has had dramatic results: not one of the school’s 57 children is overweight, and there has been a significant reduction in coughs and colds. The exercise has helped to develop the children’s social, emotional and mental wellbeing as well as their physical wellbeing. The idea has been taken up across the Netherlands and Belgium, and I would like to see a lot more of it across our own country.
Secondly, we need to do a huge amount of work on health literacy in relation to self-care. I commend to Members the report from the all-party parliamentary group on primary care and public health, which came out in March this year. It showed that there were 3.7 million visits to A&E and 52 million visits to GPs for self-treatable conditions in 2014. It is estimated that if we could deal with that by persuading people to go to the appropriate place, we could save the NHS more than £2 billion a year.
My third point relates to gatekeeping in our hospitals. I commend the initiative taken in Fife in Scotland, where having senior consultant input in A&E has led to a reduction of 30% in acute surgical admissions. My own local hospital, the Luton and Dunstable, has introduced a similar methodology for patients with acute conditions, and that is also bearing fruit.
My fourth point relates to quality, which we have not heard nearly enough about today. I urge Members to look more fully at the work of the Getting it Right First Time initiative, which the Government have now spread across 18 medical specialties. It started in orthopaedics, and the Government estimate that it will save £1.5 billion a year. This is about not only a financial saving, but better outcomes for patients, who may have undergone the wrong operation or received poor-quality care and had to have significant revisions. That project is getting data from across the country. For example, the rate of return for another procedure within 90 days following oral and maxillofacial cancer surgery varies from 8.33% in some hospitals to over 80% in others. That degree of variation is simply unacceptable. If we can get a higher level of quality, that can lead to much better outcomes for patients and the NHS saving money, too.
Finally, enhanced recovery programmes, such as the advanced transfer team in South Warwickshire, have led to significant increases in productivity with better outcomes for patients. We need to see much more of that across the country.
Siobhain McDonagh (Mitcham and Morden) (Lab)
The “South West London Five Year Forward Plan”, published last week, states its intention to save a staggering £828 million by 2020—a contribution to the attempted national saving of £22 billion by 2020. However, that draft sustainability and transformation plan, published by the south-west London partnership, does not shed much light on how it will actually be managed other than by reducing A&E attendance by 40% in three years. That is a totally implausible aim that has not been achieved by any health system in the world—let alone one so strapped for cash.
That unsustainable ambition brings us to the long-standing proposal, which has so often been denied, to reduce the number of acute hospitals in south-west London from five to four or even—God help us—three. The five acute hospitals are St George’s, Croydon, Kingston, Epsom and St Helier, whose closure I have been fighting for 18 years. Of those five acute hospitals, St George’s will rightly be protected from closure. It is also clear that Croydon university hospital or Kingston hospital are unlikely to close, which leaves just St Helier and Epsom, both of which have been under threat before. No amount of vaguely-worded statements from the partnership will change the fact that the intention is to close St Helier. The STP clearly states that the partnership needs to
“Review our acute hospitals to ensure that we meet the changing demands of our populations, and to ensure that acute providers deliver high quality, efficient care… we will need four acute hospital sites in south west London”.
It continues by stating that the partnership will
“undertake further work, including analysis of revenue implications on 3, 4 and 5 site options”.
Not only will one acute site definitely close, but commissioners are considering the closure of two sites. We know from the STP’s former iteration in 2011, the Better Services Better Values programme, that the closure of St Helier was the main recommendation. Despite that, however, colleagues on the Government Benches, including the hon. Members for Wimbledon (Stephen Hammond) and for Twickenham (Dr Mathias), have been taken in by the STP, peddling the myth that no hospitals will close.
When is a closure a closure? If A&E and maternity services, and all the associated diagnostic and other services, are removed, that is precisely a closure. I want to make it clear to the House, the Government, the partnership and, most importantly, my constituents that we have come together as a community before to fight the closure of St Helier hospital and will do it again. We will do that not only for those who use St Helier, but for those who use every hospital in south-west London. The closure of St Helier would mean the undermining of all those other hospitals.
Dr Andrew Murrison (South West Wiltshire) (Con)
I start by commending all the hard-working people in our national health service—doctors and nurses—for the increased activity in our NHS over the past several years. The NHS has never worked harder. We have never seen so many patients treated in our NHS and standards are certainly improving. However, we must face up to the fact that indices of mortality and morbidity that are amenable to healthcare are poor against reasonable international comparators. I am not satisfied by comparing the UK with the OECD average; I want to compare the UK with countries with which my constituents would wish it to be compared, such as France, Germany, Holland, Belgium and Denmark. I am afraid that our performance is behind the curve on such comparisons, and that is the challenge that we face.
Like my hon. Friend the Member for Totnes (Dr Wollaston), I am increasingly cautious about the £10 billion figure, so I urge my Front-Bench colleagues to provide clarity on it. We need to be clear about what it actually relates to. I commend the Government for spending this amount on our NHS, despite the opposition from Labour Members. If we are to have a collaborative and collegiate debate, we need some humility from them on this point, as Labour undoubtedly opposed such an amount at the last general election. However, we need to understand what the £10 billion is and what it is not. According to the Nuffield Trust, the King’s Fund and the Health Foundation, we are more likely to be talking about £4.5 billion. The reason for that, which was elegantly laid out by my hon. Friend, relates to which year we use to baseline, which year we use to base our prices on, and whether we include or exclude the money that has been removed from the public health function of local government and from Health Education England. I would contend, as I believe she would, that those moneys need to be included in the sum total for healthcare in this country, and I think that that is what our constituents would understand as the totality of healthcare. That alternative figure therefore seems to be more reasonable.
I am also worried about the £22 billion in savings on which Simon Stevens based his five year forward view. The National Audit Office report published today suggests strongly that this process is not likely to result in anything like £22 billion and that those savings are “untested”—that is polite speak for unachievable. We know that the deficit is being dealt with through a transfer from capital to revenue, and from the sustainability element of the sustainability and transformation fund. That is not sustainable in the long term. We want more transformation; we do not want to have to rely increasingly on the sustainability bit.
Tomorrow, we must look for a big cash injection to sort this out, but I submit that we then need a long-term commission—perhaps not a royal commission, as royal commissions take for ever and cost the earth—that will involve a debate about how we pay for our health service in the long term, given the pressures that we face. That might involve a hypothecated tax. The end to the triple lock could save £2.1 billion by 2020-21, and that money could then be hypothecated to the NHS in the interests of generational fairness, given that the elderly consume the largest portion of healthcare spend. We also need to look at fiscal incentives relating to employees’ private medical insurance. But we need to do all this within a Beveridge envelope that delivers an NHS that is free at the point of need.
Jenny Chapman (Darlington) (Lab)
It is a pleasure to follow the hon. Member for South West Wiltshire (Dr Murrison), whose points about hypothecation were particularly interesting.
Long-suspected proposals to downgrade Darlington Memorial hospital were confirmed by the leak of the STP by Hartlepool Borough Council. I am grateful to the council for allowing the document to enter the public domain. Darlington Memorial serves not only the town of Darlington, with its population of about 100,000, but communities living far into the Durham and the Yorkshire dales—Barnard Castle, Northallerton and beyond. Darlington is also the closest major town to Catterick garrison, the largest army base in Europe, which is set to expand yet further. Nearby hospitals have already been downgraded in recent years, with changes to emergency cover at Bishop Auckland hospital and to maternity services at the Friarage hospital in Northallerton. When those changes were made, in the face of enormous local opposition, residents were assured that services at the next nearest hospital, Darlington Memorial, would be safe.
Darlington Memorial is special to me, perhaps even more so than it is to many of my constituents—I make no apologies for that. Both my parents were nurses, and we lived in nurses’ accommodation at Darlington hospital for a while when I was eight or nine. My dad died at that hospital, as did my grandmother. My two sons were born there, and have made regular and at times unexpected use of its services ever since.
I do accept that, for some specialist services, there is a benefit to centralisation. I absolutely support clinically driven decision making. When cardiac services were moved from Darlington to Middlesbrough, it did not lead to a campaign—it was the right choice for patients, it improved outcomes and I supported it. However, major trauma is already located at James Cook University hospital in Middlesbrough, and the argument now is about centralising services that do not have problems in their outcomes. There is also no clinical gain for patients through such a change, which makes the proposal just wrong.
Another concern relates to the amount that has been spent on so-called engagement activity with the local community to explain the downgrading plans to residents and find out what they think about them. Answers to written parliamentary questions show that £4.6 million has been spent on such activities so far. That is a disgrace, and those responsible should be held to account, as they have wasted public money and are now misleading the public about the fact that there is absolutely nothing to show for that.
In recent months, a campaign to save Darlington hospital has been growing. People from SOS Darlington have been out campaigning in the town centre, knocking on doors, and holding coffee mornings, and they have done it all for free. They have managed to engage 6,000 people. They are doing a better job of engaging the public and they are doing it for absolutely nothing. There is no clinical case for downgrading services at Darlington hospital. Everyone involved knows that, which is why so much time and money is being spent on making up ways to persuade patients that it is a good idea.
The STP’s description of my constituents as “passive recipients of care” is not helping. The trouble is that the nirvana that the STP tries to support is not achievable without massive—as yet unquantified—amounts of up-front spending.
I admit that my attachment to my local hospital goes beyond the utilitarian, but I understand enough about how this process is unravelling to know that staff at Darlington Memorial hospital and their patients—my constituents—deserve an awful lot better.
Craig Whittaker (Calder Valley) (Con)
Our national health service is, and always has been, valued and cherished by my constituents who rightly expect an excellent standard of care to be provided free at the point of use when they need treatment. We are all deeply committed to the future of the NHS, but to ensure that it can continue to provide the quality of care that our constituents expect, it cannot stand still. It needs to continue to transform the way in which it delivers services so that more resources lead directly to better care for patients.
Both the total NHS budget and the amount of NHS spending as a proportion of total Government spending have increased in every single year since 2010. Spending is now 10.1% higher per head in real terms than in 2010, and that increase has brought our health spending as a proportion of GDP broadly in line with that of our western European neighbours. In order to achieve best value from its resources and to deliver £22 billion of efficiency savings—those are savings that the NHS identified as achievable in its five year forward view—it is necessary to reconfigure the way in which health and social care services are delivered at a local level. That is a huge issue, and until we amalgamate social care budgets with health budgets to deliver a truly health-driven service with proper health-led care in the community, we will struggle with this for many years. I mention that not to cause controversy, but to highlight the difficult decisions ahead. Too often those decisions and the long-term sustainability of our local services are hindered by ideology, local politics and empire protections over budgets.
A few weeks ago, the West Yorkshire and Harrogate STP was published, setting out the vision, ambitions and priorities for the future of health and care in the region. This built on the significant work that was completed locally by both the Calderdale and the Greater Huddersfield clinical commissioning groups, which have been working together to address the significant challenges facing the health economy across our whole area. The decision to proceed with the development of a full business case was met with considerable concern from some members of the public who have been vociferous in their opposition to what they perceive to be a complete withdrawal of urgent care treatment at Huddersfield royal infirmary. Although the process has been challenging, to say the least, I would argue that it has been absolutely essential. What is certain is that the current model through which health services in Calderdale and Huddersfield are delivered is not sustainable in the long term, and that changes are needed to ensure that we have a local health service that continues to provide excellent care.
Amid some of the sensational media headlines from the local press and the comments of some of my opponents at the last general election, it can be easy to forget that these proposals are being put forward not by politicians or by the Government, but by our senior local clinicians and doctors—the very people who understand how our local health services can best be delivered in the long term. They have taken an independent view about how the additional resources that the Government are making available can directly lead to better care for patients locally, and we have to trust their judgment. However, if we are to receive the support of our constituents for transforming the way in which we deliver their care, we must vastly improve the way in which we communicate any proposed changes and not keep scaremongering about cuts and reduced services, especially when the annual NHS budget spend is increasing in real terms.
Maria Eagle (Garston and Halewood) (Lab)
I want to talk about the Cheshire and Merseyside sustainability and transformation plan and the documents relating to it, which were finally published last Wednesday, although details had been repeatedly leaked. The plans are every bit as full of unrealistic proposals and management newspeak as many of us feared. They amount to a catastrophic financially driven plan drawn up by managers in secrecy under pressure from the Secretary of State for Health. They are already being implemented, without any of the affected stakeholders or the people of Cheshire and Merseyside ever being asked what they think.
If fully implemented, the STP would involve the merging of the Royal Liverpool, Broadgreen and Aintree hospitals, with the Liverpool Women’s hospital being “reconfigured” and merged into the new organisation at a later date. It is planned to be rebuilt nearer the Royal, but there is no NHS money available for the new hospital building. The plans entail the downgrading of hospital A&E services at Whiston hospital, where many of my constituents go, or at Warrington or Southport hospitals, or some combination of all three. Details are not provided.
These shocking cuts and mergers have very little chance of being accepted by the people of Garston and Halewood, for a number of reasons. First and foremost, it is clear that the Cheshire and Merseyside STP is financially driven. This has been admitted by those who have drawn it up. Katherine Sheerin, chief officer of Liverpool clinical commissioning group, accepted this in an interview that she gave in the Liverpool Echo. When asked what would happen if these changes were not made, she said:
“If we did nothing, we would not have enough money to run the services. This is about managing that, rather than letting it happen.”
When asked if these changes were being driven by cuts, she replied:
“The financial component has been a strong driver”.
The King’s Fund agrees with her. In its report entitled “Sustainability and Transformation Plans in the NHS”, it says:
“The original purpose of STPs was to support local areas to improve care quality and efficiency of services . . . The emphasis from national NHS bodies has shifted over time to focus more heavily on how STPs can bring the NHS into financial balance (quickly).”
Quite so, and we can see this in Katherine Sheerin’s answers.
The Cheshire and Merseyside STP has to deal with the pressure of almost a £1 billion gap in its funding by 2021, so making cuts in spending to meet the Government’s financial requirement is at the core of these plans. The people of Merseyside are not daft— they can see this. The Cheshire and Merseyside STP requires £755 million of capital funding, which is now no longer available. In Liverpool alone, our hospitals’ deficit is estimated to be £276.5 million. In her Liverpool Echo interview, Katherine Sheerin suggested that Liverpool City Council would provide the missing capital funding.
Ms Angela Eagle
I thank my hon. Friend for giving way. The Wirral Borough Council was not asked to participate at all. Was the Liverpool authority asked to participate?
Maria Eagle
Neither Liverpool City Council nor Knowsley Borough Council has been consulted at all about the plans. However, when asked where she was going to get the money for the new hospital, Katherine Sheerin said:
“There’s limited capital available but there are options to explore. Councils tend to be able to access borrowing at a very cheap rate.”
There we have it: Liverpool City Council is expected to stump up the money to implement what is supposed to be a key part of the strategy—building a new women’s hospital. However, this is the same Liverpool City Council that has had 58% of its money from central Government removed—first by the Lib Dem-Tory coalition and then by the Tory Governments after 2010—and that relies for almost three quarters of its income on that Government grant. This is the same Liverpool City Council that already spends £151 million on adult social services for its ageing population, but that can raise only £147 million in council tax. This is the same Liverpool City Council that is expected to find another £90 million of savings over the next three years and that is facing some extremely invidious choices to balance its budget.
My second point is this: these plans have been drawn up in near secrecy by NHS managers, and without consultation with those who are now being exhorted to help. Neither Knowsley Metropolitan Borough Council nor Liverpool City Council has been asked what it thinks. Consequently, both say, unsurprisingly, that they are opposed to the plans. In Liverpool, the ruling Labour group has made it clear that it will oppose any STP that proposes cuts, and the Mayor of Liverpool has said publicly that he opposes the proposed closure of the Women’s hospital and will campaign to keep a women’s hospital in Liverpool. I agree with him. Labour in Liverpool will support any change to existing provision only if it improves services to women in Liverpool.
The current plans are already being implemented, and that is another thing we cannot allow to go ahead without proper consultation.
John Howell (Henley) (Con)
My starting point is that funding in the NHS must be used effectively and efficiently. To that end, we expect the NHS to deliver savings and best value for money.
There are a number of issues relating to social care in the NHS where there is considerable scope for solving existing problems, for ensuring that better health care is delivered and for achieving sustainability, and there is no better place to start the discussion of those issues than bed-blocking.
Oxfordshire’s historical performance on bed-blocking is poor. It came 151st in terms of headcount last November, with 158 people. Bed-blocking decreases the availability of beds and has adverse effects on patients, particularly when they are elderly—for example, incontinence in the over-65s increases, and muscle wasting in the over-80s after 10 days of hospitalisation is equivalent to 10 years of muscle wasting otherwise.
By September, the headcount had fallen to 113 people, improving the county’s performance to 108th—a massive improvement of 50 places over that period. That was achieved through a joint initiative by the clinical commissioning group, Oxford University Hospitals, Oxford Health NHS Foundation Trust and the county council, all working to move people out of hospital when they have been appropriately treated.
However, that improvement was also achieved by putting £2 million into funding extra temporary care beds in care homes, where people can stay until they are ready to return to their own homes, move to a permanent care home or receive care in their own homes. That joint and positive thinking is something I would encourage as we integrate social care and the NHS.
Craig Whittaker
Does my hon. Friend agree that one lever for discouraging bed-blocking would be to join up some of the budgets around health and social care?
John Howell
I do, and that is precisely what the organisations in Oxfordshire have been trying to achieve.
The second point I would make relates to how we produce better-serving hospitals. In my own area, the Townlands Memorial Hospital, which is in Henley but which serves the whole of south Oxfordshire, has recently gone through a major reprovision. It now has an increased number of facilities serving the population of the area, but the beds are not in the hospital. Although limited in number, they are in an adjoining care home, whose opening I happened to attend with the Duke of Gloucester only the other day. It is good to see the issues at the hospital finally resolved.
That is the way forward for local hospitals: better treatment for people in their home through a system of what has come to be called ambulatory care. Such a system prevents the problems I mentioned, with patients suffering when they stay in hospital for a long time. This view comes not from politicians but from clinicians both local and national. The national clinicians I would point to are those in the Royal College of Physicians, who are fully behind this process. This method costs more in the first instance but provides better value for money and increases better patient outcomes.
The third area I want to discuss is what can happen when we integrate the staff providing care who are employed by the county council and those who are employed by the NHS. This allows us to ensure that the pay and service requirements of both groups of people, who are doing exactly the same job, can be harmonised in a much more positive way. That sets out a good scope for efficiency in the operation of social care within the NHS model. I agree with my hon. Friend the Member for Calder Valley (Craig Whittaker), in that I would like to see them fully integrated, but until then I have set out a very good method of being able to operate in those circumstances and to co-operate in order to achieve the outcomes that I have mentioned.
Sustainability and transformation plans focus on organisations working together and are the best hope of improving health and social care services in the long term. That is not my view but that expressed by the King’s Fund when it looked at the plans. I fully agree with its assessment of the situation and of these plans, which are working towards achieving the same outcomes.
Margaret Greenwood (Wirral West) (Lab)
The funding crisis in the NHS is no accident. It is a political choice made by the Tories for which patients and NHS staff are paying the price in longer waiting times, delayed operations, and increasingly stressful working conditions. It is a crisis driven by the Government’s demand that the NHS make £22 billion-worth of efficiency savings—or cuts. This is impossible without huge damage to our national health service.
An analysis by The Guardian of 24 of the 44 STPs stated:
“Thousands of hospital beds are set to disappear, pregnant women will face long trips to give birth and a string of A&E units will be downgraded or even closed altogether as part of controversial NHS plans to reorganise healthcare in England…Dozens of England’s 163 acute hospitals look likely to have services, including cancer, trauma and stroke care, removed as a result of the plans”.
In the 2015-16 financial year, the NHS reported a record net deficit of £2.45 billion—nearly three times higher than in 2014—and so we see the crisis in services accelerating. Last week, the chief executive of NHS Providers, Dr Chris Hopson, said:
“The NHS simply cannot do all that it is currently doing and is being asked to do in future on these funding levels.”
STPs are supposed to facilitate the integration of health and social care, for which they require the support of council leaders, yet the leader of Wirral Council has said in the past 24 hours that he has not been given the opportunity to feed into the development of the local plan. The STP for Cheshire and Merseyside is of great concern to my constituents because it requires nearly £1 billion to be taken out of local health services. If this goes ahead, the impact on the NHS will be devastating; it is impossible that it would be otherwise.
There was recently a proposal to close Arrowe Park hospital, Clatterbridge hospital and Countess of Chester hospital and build a new hospital in Ellesmere Port, and there has been no denial that such a conversation has taken place. The annual report of the foundation trust that runs Arrowe Park and Clatterbridge says:
“The Trust will explore with Countess of Chester Hospital the potential for the development of a single acute general hospital covering Wirral and west Cheshire within the next 10-15 years …Another option is to move all planned surgery and procedures to Clatterbridge, while Arrowe Park will become a ‘hot site’ dealing mainly with emergencies.”
It is not clear what a “hot site” is if it is not a hospital. Surely the point about an A&E is that it needs to be in a place where there is a very wide range of expertise on how to deal with any emergency. I have very real concerns about the future of Arrowe Park hospital, which is a major hospital highly valued by my constituents who use its services and who work there; indeed, it is a major employer in my constituency. The STP talks of “hospital reconfiguration”. It is no wonder that local people are up in arms about the plans.
The STP for Cheshire and Merseyside appears to set a great deal of store by the development of ACOs, or accountable care organisations. These are an idea brought from America, where of course there is no national health service. They integrate health and social care, and have a strong emphasis on cost reduction. The core issue is that people in England often pay for social care, but certainly do not expect to pay for healthcare, other than through direct taxation. There is real concern that the introduction of ACOs through STPs is part of a desire on the part of the Government to introduce a private insurance-based healthcare system in England instead of our national health service. I would be grateful if the Minister could give some clarification on that point.
It is my belief that the Government are cutting the supply of healthcare in the public sector to create demand for a private health insurance marketplace like the one in America, and there is nothing in the STP to reassure me that that is not the case. The document is riddled with the language of the market, talking of increased customer satisfaction, better user experience and “commercially sustainable” clinical support services. If the STPs go ahead across England, we can expect to see A&E closures, hospital closures, downgrading of services, patients waiting longer for treatment, and deterioration in the pay and conditions of staff as the drive to cut costs takes its toll. I urge the Government to use the autumn statement to address the underfunding of the NHS and to give it the funds it needs.
Madam Deputy Speaker (Natascha Engel)
May I just make an apology to Hansard? It is one thing reading a speech, but that was a record level of reading into the record. I appreciate that time is short and that the hon. Lady wanted to put those things on the record, but if she speaks a little bit slower and allows other Members to understand what she is saying, it will give them an opportunity to intervene and she will gain some extra time.
David Tredinnick (Bosworth) (Con)
Speaking for myself, I was impressed by the pace of the hon. Lady’s speech.
In this short contribution, I want to address the supply of practitioners, not just the supply of money. I suggest to my hon. Friend the Minister that since we have regulated many more practitioners, many more practitioners should be available on the health service. The Professional Standards Authority chief Harry Cayton has called for a much greater use of those on his register. He says:
“We all know we need to deliver new, innovative ways to improve people’s health…That means looking beyond the traditional confines of our health and care system and the traditional health professions.”
The 23 organisations on his register—including the Federation of Holistic Therapists, the Society of Homeopaths and the British Acupuncture Council—regulate 20,000 practitioners.
The treatment of lower back pain needs much greater consideration. Since the regulation of chiropractors and osteopaths in Bills that I was involved with 20 years ago, there has been far too little communication with orthopaedic surgeons. There is an organisation called ARMA—the Arthritis and Musculoskeletal Alliance—but I ask my hon. Friend to look at the matter and see how much more effective integration can be. NICE now recommends acupuncture for lower back pain, as I hope it will continue to do, and that should be brought in.
On Brexit, we have the European legislation to consider. Three directives need close scrutiny when we take them over. The traditional herbal medicines directive has struck out proven Chinese medicines and other herbal medicines, the food supplements directive is very restrictive and tougher regulation will be needed when we get our hands on the food additives directive.
The chief medical officer wrote a report in the last Parliament on antimicrobial resistance. One of the most effective ways of stopping antibiotic use is to use homeopathic medicine, which has a proven record in upper respiratory tract infection treatment. We also need to go back to the ’90s to look at the GP fundholding system that was available in John Major’s Government, whereby doctors could commission complementary and alternative medicine practitioners. A clinic known as “The Crypt” in Marylebone saved £500,000 in one year using homeopathic treatments. When that was struck out by the new Labour Government, the clinic overspent its drug budget by £1.5 million.
There have been a lot of attacks in the past few years on homeopathy, which is an honourable and well-served practice of medicine with its own doctors, regulated in this country and used in 41 of 42 European countries. Some of those attacks have been from an organisation called the Good Thinking Society, which really consists of one man and a dog. It spends £100,000 a year, £20,000 of which comes from the taxpayer through its charitable status; I think that that is an absolute scandal. I urge my hon. Friend the Minister not to listen to the siren voices of that small, badly represented group. We need to use the discipline of homeopathy. We must not allow lawyers sending letters to clinical commissioning groups and others to derail the availability in the health service of that very well-established and popular system of medicine.
Dr Rosena Allin-Khan (Tooting) (Lab)
For all the wrong reasons, St George’s hospital in Tooting has been in the news recently. First, it appeared on the front page of a national newspaper because it was requiring people to show an ID before coming in and giving birth. Secondly, it was rated inadequate in a recent CQC inspection. Finally, figures were released showing that one patient waited 36 hours in A&E before being admitted to the hospital.
The one question we are all asking is: why? Why are the roofs in the theatres leaking? Why are the computer systems inadequate? Why has Wandsworth Council been forced to cut almost £10 million from social care budgets? Why does my local hospital trust have a deficit of £50 million? Everywhere we look, the answer is a lack of funding.
We should not leave our hospitals with the bare minimum to function; we should prioritise their funding. It is a healthcare system: we cannot take risks. If we do, it will result in a loss of life—people die. The Health Secretary can point the finger at whomever he wants, but it is not because of our doctors, who always go the extra mile, our trainee nurses, who have had their bursaries cut, or our carers, who are overworked and underpaid. I am afraid the Conservative Government are to blame.
I have worked in our NHS under a Labour Government and under a Conservative Government, and there is a significant difference. Staff morale is at an all-time low, as is patient morale. This Government are failing patients. Government Members know it, and Opposition Members know it. St George’s has not had significant resources put into it since Labour was in government. This is not a one-off story; it is happening up and down the country.
When Labour was in government, our healthcare system was a truly national health service: we saw more doctors, better equipment, new hospitals, and happier and healthier patients. Under this Conservative Government, waiting times are rising, buildings are falling apart and patients’ lives are being put at risk. We are making life and death decisions on the basis of costs. Our NHS is in crisis, and this crisis is turning into a disaster before our very eyes. The NHS was built by a Labour Government, it was saved by a Labour Government and it will be a Labour Government who rescue it.
David T. C. Davies (Monmouth) (Con)
I am very pleased to pick up where the hon. Member for Tooting (Dr Allin-Khan) left off. Quite frankly, I find it extraordinary that Labour Members have the audacity to come into the Chamber and trumpet their views about the national health service when they know that they have had 18 years of running the NHS in another part of the United Kingdom and that, on any of the performance indicators that are looked at, the NHS in Wales is performing less well than the NHS in England. I do not for one minute want anyone to think that I am criticising NHS staff—the nurses and doctors—because I am not, and I am not running down Wales either, because I know exactly where the blame lies. It lies at the feet of the Labour party for implementing exactly the same policies that Labour Members are now calling on the Minister to implement.
There is no need to take my word, or that of any Conservative, for this; one can simply get hold of the Nuffield Trust report on “The four health systems of the United Kingdom: how do they compare?” This independent report looked at a range of indicators, and it makes this very clear. I am very happy to read from the report, which in its own way is far stronger than anything the Conservative party could publish. It says that waiting times in Wales have lengthened since 2010, with striking rises in waits for common procedures such as knee and hip replacements. When language such as “striking rises” is used, surely people should take notice of the report, especially when, as Labour Members must realise, those striking rises are being caused by the policies they are asking my hon. Friends to implement.
The report talks about how amenable mortality rates are lowest in England. In other words, people live longer in England. It also talks about waiting times, which are an absolute disgrace. There is a target waiting time of 26 weeks in Wales, whereas it is just 18 weeks in England. More than that, the report shows that some people are waiting for up to 170 days for knee and hip replacements in Wales, as opposed to just 70 days in England.
The report shows that funding in Wales has been cut in real terms. Wales is the only part of the United Kingdom where funding for the national health service has been reduced; in England it has been going up.
The report shows that there is a shortage of GPs. My hon. Friends have increased the number of GPs to 0.75 per 1,000 people, compared with 0.66 per 1,000 in Wales. On stroke care, 39% of patients spent 90% of their time in a stroke unit, as opposed to 51% of patients in England—a much higher amount. The figures for MRSA show, once again, that England is ahead of Wales. The figures for ambulance response times show that 75% of ambulances make it within eight minutes in England, as opposed to 65% in Wales.
Perhaps one of the most shocking differentials in service between England and Wales is in the access to cancer drugs. Constituents have come to see me because they have had to go sofa-surfing with relatives in England to get access to standards of care that patients on this side of the border take for granted.
I issue a challenge to everyone in this House. If Opposition Members think that the Welsh NHS, the policies of which they want to follow, is as good as the English national health service, they should allow patients to choose. I constantly write to my colleagues on the Front Bench asking them to allow patients from Wales to access the national health service that they are delivering so well in England. Unfortunately, it is not always possible to do so. We should have a truly national health service that allows people in Wales to go and be treated in England if they want and, indeed, people in England to be treated in Wales if they want, and adjust the block grant accordingly.
In the meantime, I very much hope that my hon. Friends will stick with the policies that are delivering higher standards of healthcare in England because, if nothing else, it means that my constituents have something to aim for and can demand that the Labour party in Wales follows the successful policies that are being followed in England.
Madam Deputy Speaker (Natascha Engel)
A couple of Members who were on the list are not in the Chamber and will be written to. That means that the last two speakers have up to six minutes each.
Jim Shannon (Strangford) (DUP)
It is not often that the people who come last get more time to speak, so thank you very much for that, Madam Deputy Speaker.
The speeches by right hon. and hon. Members from all parts of the Chamber have been exceptional. We should focus on the good things in the NHS, which everyone in this Chamber acknowledges. The passion that we hear in debates like this often comes out of what our constituents tell us.
Margaret Greenwood
Does the hon. Gentleman share my concern about the introduction of ACOs through the STPs, which come from America and are often used in insurance-based models of healthcare? Because people here do not pay for healthcare, except through direct taxation, but do pay for social care, there is a lot of concern about the blurring of the boundaries and a worry that we will wind up with people being asked to take out health insurance.
Jim Shannon
I agree wholeheartedly with the hon. Lady. Madam Deputy Speaker mentioned how fast she speaks; perhaps she is trying to take away my record. The hon. Member for Vauxhall (Kate Hoey) says that I do more words to the minute than anybody else in the House. Perhaps the hon. Member for Wirral West (Margaret Greenwood) is trying to take that mantle, but we will see.
I am the health spokesperson in the House for the Democratic Unionist party. It is a portfolio that needs to be balanced, and we should look for the greater good at every stage. In my opinion, it is the most difficult portfolio for anybody to hold. I am glad that I am not in the position of the Secretary of State for Health, because I would find it difficult to say to a person, “We cannot supply the drugs that you need to prolong your life, but we are hoping to save the life of the person beside you. We need the money to save, rather than prolong, life.” The hon. Member for Monmouth (David T. C. Davies) referred to sofa-surfing and the lottery for those who need access to drugs. Although I do not envy the Government in having to make such decisions, I cannot sit back and not highlight the difficulties that exist within Government funding and the fact that the NHS must have more designated funding to keep it running.
I read with interest the briefing provided by Macmillan. It sent chills down my spine. By the end of this Parliament, about one in every two people will be diagnosed with cancer in their lifetime. I look around the Chamber today and remember that those statistics include us and our loved ones. Indeed, there are some Members in the Chamber who have experienced cancer and are survivors. My own father battled and won against cancer three times. I am aware of what that battle entails, and how much of it is based on the right diagnosis and treatment, the availability of that treatment, the skill of the surgeon’s knife and the prayers of God’s people—those are all very important. It is clear that improvements in diagnosing and curing the disease mean that more people surviving it are living for longer with it; some 2.5 million people are living with or beyond cancer in the UK today.
In my opinion, more must be done to help those with rare diseases and rare forms of cancer. Will the Minister give us an indication of what funding and resources will be set aside for them? Those rare diseases and cancers are increasing. Put together, those conditions affect a large number of people. I know that funds are not infinite, but we must focus on those with rare diseases and with rare forms of cancer.
I will mention a tremendously courageous lady—I hope she will not mind me mentioning her name in this Chamber—who works in my constituency, called Aundrea Bannatyne. She watched her son battle cancer and triumph, only to be told that she had pancreatic cancer and that there was no treatment for it in Northern Ireland. The help she needs will cost up to £100,000 and the people of the area where she lives, Dundonald, have dug deep to help fund that.
That lady’s story could be replicated in the constituency of every Member in this Chamber, across the whole of the United Kingdom of Great Britain and Northern Ireland, but the postcode lottery says that she cannot have treatment because she lives in Northern Ireland. However, she would be able to access it in other counties on the mainland, which is something that the hon. Member for Monmouth referred to. That lottery is not what is needed. We need treatment in all areas. That must be addressed by additional funding. Aundrea needs more than us wringing our hands and being sympathetic. She needs practical, physical help. That is the only thing that can change her hopes for her future and her son.
Macmillan has said that one in four people living with or beyond cancer face disability or poor health following their treatment. That can remain the case for many years after the treatment ends. It is vital that they can access the best care—the care that is right for them—when they need it. The NHS must be able to meet the changing needs of cancer patients. That would not only increase the quality and experience of survival, but ensure that resources are invested in the most effective way. That is key, given that the five year forward view projections indicate that expenditure on cancer services will need to grow by some 9% a year, to £13 billion, not to get ahead but simply to stand still. That level of spending is likely to yield outcomes that continue to be below average when compared with similar international healthcare systems. We must therefore act now to ensure that the money is spent as effectively as possible, to give England and the United Kingdom of Great Britain and Northern Ireland a better chance to achieve world-class cancer outcomes and deliver the Government’s manifesto commitment.
The health service currently spends more than £500 million a year on emergency care for people with the four most common cancers alone. If we are spending £500 million on emergency treatment for cancer, there is something wrong with the system that we have to address effectively. Emergency care should be a last resort for people living with cancer. Such a vast amount of emergency care spending is symptomatic of a system that is not geared towards helping people take control of their health.
I am conscious that the hon. Member for Bury St Edmunds (Jo Churchill) is waiting to contribute, so I will conclude with this comment. Let us make the right decisions to sustain the NHS as it is—never mind give more, which is what people actually need. If that means taking simple things such as paracetamol off the prescription list, to save £80 million, let us do it.
Let us look at real issues that can make a change. Let us do the simple things for the greater good, and let us determine to be more efficient where possible and cut unnecessary red tape rather than services. Let us ensure that our NHS can withstand not only the surge of cancer diagnoses but the surge of diabetes—other Members have referred to that—heart disease, and all other major illnesses, which are only worsening. I do not envy the Minister’s task, but we have to make hard choices. We have to get the funding in the right place, and make decisions that take away bureaucracy and restore funds where they are needed—to cancer, rare diseases and rare cancers.
Jo Churchill (Bury St Edmunds) (Con)
I want to start by saying a huge thank you to everybody in our hospitals, our GP surgeries and our care homes. Listening to the debate, one might be under the impression that brilliant things are not going on, but nine out of 10 people in A&E benefit from being seen within four-hours. This discussion therefore needs to be balanced. I have heard that there are problems up and down the country, but the West Suffolk hospital in my constituency has just been rated as outstanding not for its buildings or anything peripheral, but for its care. That is the most important thing we can ask anyone to give.
The hon. Member for Tooting (Dr Allin-Khan) said that things were better under Labour. I was diagnosed with my second and third cancers when Labour was in government. The radiotherapy machines were under a sheet and not working because of a lack of staff. This problem has been coming down the track for ages. We do not do anybody a service if we deny that it is a problem and that it is looming.
GPs in Suffolk are under pressure. I talk to them regularly. I engage with social care, which is struggling. It is about the service, as my hon. Friend the Member for Calder Valley (Craig Whittaker) said, but we should remember that every patient is a person—a daughter, a mum, a dad. For the five year forward view, we listened and we came to the table with the money. Demand has outstripped us, and we need to look at streamlining services. Having one pot of money will help us to understand the blockages in the system to which so many people, including my hon. Friend the Member for Henley (John Howell), alluded. We can then look to unblock the system. It is ridiculous to have people on delayed discharge because we cannot get them into the community, and then for GPs to send to A&E people who cannot get into the hospital to be treated. We all know the problem; let us look at the solutions.
Prevention is also an issue. The motion today is about far more than cash. The year 1948 is a long time ago and the system has always been a mix of private and public. It is stronger today, but there are 1.4 million in its workforce.
I said thank you earlier. I would especially like to thank junior doctors, many of whom speak to me on a regular basis. They tell me that just a little thank you from people for the hard work they do would make a difference in their daily lives, so I ask for that. Some 92% of the pot of money goes to the acute sector. Our GPs, who we are expecting to do more, receive 8%. Working together would help us to look at what funds are needed for social care.
Moving people through the system is tricky. With an ageing population and comorbidity, 70% of the health budget is spent on long-term conditions. Some 22.4 million people visited A&E last year—up 600,000. I applaud the doctors who are beginning to say, “Do you know what? You can do the odd thing at home. You don’t always have to come and see us.” We need to be more responsible for our own health.
It is important that we look at new ideas. My hon. Friend the Member for South West Wiltshire (Dr Murrison) mentioned in The Telegraph the other day that we should perhaps look at the triple lock. Today, Stephen Dalton, interim chief executive of the NHS, talked about using the private sector more slickly. The provision of care relief for patients could be moved around so that home services are sorted. We need to consider community diagnostics. We need to be able to talk about these new ideas. Let us think about the future.
A young medic told me on Friday how much a 10-hour operation involving nine professionals cost. People need to understand what things cost. A young clinician said to me only yesterday that when somebody does not attend they should be asked to pay. They are sent a text, and there has to be more responsibility.
In this country, where a diabetes crisis is looming, 66% of people are obese; one third drink too much; and 20% smoke too much. We have to decide what we want out of this overburdened system and what we want to put in. As the hon. Member for Strangford (Jim Shannon) mentioned, the NHS spends around £85 million on paracetamol, yet it can be bought for just 16p. Should we be investing money in different places? If we treasure the NHS, we should treasure ourselves and its resources. The rise in cancer diagnoses is linked to obesity. Some £3.5 billion is spent on treating alcohol-related illnesses. The system is in crisis, but we have ways of addressing it. I do not want this to be a blame game. We have recruited more doctors and nurses, but now we need to step up, talk about the problems and develop a streamlined system.
Justin Madders (Ellesmere Port and Neston) (Lab)
This has been at times a high-quality and passionate debate that has made clear the concerns across the House about the sustainability of our health service. The Chancellor sadly could not be with us this afternoon—I assume he has a few other things on right now—but had he been here to hear the contributions from Members on both sides of the House, he would be in no doubt about the severity of the challenges facing the health and social care sector, or about the dire consequences that will follow if he does not deliver the rescue package that is needed tomorrow.
We have heard some excellent contributions. As right hon. and hon. Members have said, while we might have our political differences, we all appreciate the work that our staff in the NHS do—as we do the work of all public sector workers—and we thank them for it. The hon. Member for Totnes (Dr Wollaston), the Chair of the Health Committee, calmly and clearly explained how cuts to the health budget were used to help the Secretary of State reach his figure of £10 billion. Despite the huge volley of figures he mentioned in his speech, he failed to mention that amount at all. The hon. Lady pointed out how many of the cuts will store up other problems in the long term, and she is right that the moving of the goal posts that has taken place does nobody any credit.
My hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh), who described the savings required in her area as implausible, is clearly going to fight the closure of St Helier hospital. She rightly pointed out that that closure will undermine other services and hospitals in her area, and I have no doubt that her constituents will be relieved to have such a doughty champion on their side. The hon. Member for Strangford (Jim Shannon) spoke with great sincerity and passion about the variations in cancer treatment and alarming statistics setting out anticipated increases in incidences of cancer. He also rightly highlighted the expenditure on emergency cancer treatments, showing that much more needs to be done on earlier detection.
My hon. Friend the Member for Darlington (Jenny Chapman) said that there seemed to be a focus in her area on consolidating services where there was no problem with clinical outcomes, and she made it clear that her constituents would not be fooled into accepting a downgrade in their local hospital. Her local health chiefs have won the award for the worst use of management speak today by calling patients “passive recipients of care”. My hon. Friend the Member for Tooting (Dr Allin-Khan) brought her recent experiences of the health service to the Chamber and said of the NHS that everywhere we look the answer is a lack of funding. She told us that staff and patient morale were now at all-time lows, and she should know what she is talking about.
We also heard from the hon. Members for South West Bedfordshire (Andrew Selous), for South West Wiltshire (Dr Murrison), for Calder Valley (Craig Whittaker), for Henley (John Howell) and for Bosworth (David Tredinnick), although none of them referred to the deficits their own STPs were facing—perhaps they do not think there is a problem. I can tell the House, however, that in South West Bedfordshire, the deficit is £311 million; in South West Wiltshire it is £490 million; in Calder Valley it is a staggering £1.07 billion; in Henley it is £479 million; and in Bosworth it is £700 million.
Andrew Selous
I am well aware of the financial challenges in my own area, but I noted in my STP the 26% increase in funding up to 2020-21, which I think is quite commendable.
Justin Madders
I am delighted that the hon. Gentleman has actually seen his STP; many Members have still not got hold of theirs.
Dr Murrison
How much worse does the hon. Gentleman think that the deficit in South West Wiltshire would have been had Labour won in 2015 and uprated NHS spending by just £2.5 billion, rather than the figure we are currently enjoying?
Justin Madders
Our manifesto was very clear that we would put in £2.5 billion immediately, plus whatever was needed. Indeed, research by the House of Commons Library has shown that if health spending had continued at the levels maintained by the previous Labour Government, there would be an extra £5 billion a year by 2020.
The NHS has deteriorated on every headline performance measure since the Health Secretary took office. It now faces the biggest financial crisis in its history, with providers reporting a net deficit of almost £2.5 billion last year. That deficit was covered only by a series of one-off payments and accounting tricks that do not disguise the true picture of a service that is creaking at the seams, of a workforce stretched to the limit, and of a Health Secretary in denial about his own culpability for this shocking state of affairs. While he rightly paid tribute to the work of NHS staff, he must know that when morale is so low, his platitudes are just not enough.
Ms Angela Eagle
I asked my sister whether Liverpool had had any input into the Merseyside and Cheshire STP. Obviously my hon. Friend represents part of the area that it covers, so can he tell us whether Ellesmere Port has had any involvement in the development of that STP?
Justin Madders
Only last week Cheshire West and Chester Council, which covers the Ellesmere Port area, put forward a resolution indicating that it was not satisfied with its level of involvement in the STP. Indeed, I do not think any council in the Cheshire and Merseyside area is satisfied, including even the Conservative-controlled Cheshire East Council.
Faced with an unprecedented crisis, what did the Secretary of State have to say for himself when asked by the Health Committee about investment in the NHS over the next five years? He said:
“Whether you call it £4.5 billion or £10 billion does not matter.”
Well, it might not matter to him, but it matters to people up and down the country who are desperately worried about the future of their local health services. This is not loose change down the back of the sofa. We know the Secretary of State will not accept what the Chair of the Health Committee said about giving a
“false impression that the NHS was awash with cash”,
so perhaps he will listen instead to the head of the National Audit Office, who said yesterday:
“With more than two-thirds of trusts in deficit in 2015-16 and an increasing number of clinical commissioning groups unable to keep their spending within budget, we repeat our view that the financial problems are endemic and this is not sustainable.”
Perhaps he will listen to the Nuffield Trust, King’s Fund and the Health Foundation, which in a joint statement released this week said:
“The Department of Health’s budget will increase by just over £4 billion in real terms between 2015/16 and 2020/21. This is not enough to maintain standards of NHS care, meet rising demand from patients and deliver the transformation in services outlined in the NHS five year forward view.”
Ministers need to stop trying to hoodwink the public, patients and even their own Back Benchers about the extent of the crisis engulfing our health and social care sector. Every day we hear more about a service crumbling as six years of underinvestment and cuts in social care and public health come home to roost. At the weekend, we heard about the Yorkshire ambulance service piloting a new scheme that might involve heart attack victims waiting up to 40 minutes to get an ambulance. Only yesterday, there were claims from GPs that very young and elderly patients are dying because of worsening delays involving 999 calls. Indeed, the most recent ambulance figures were the worst on record, but what did we hear from the very top of the Government about the NHS this weekend? The only comment we heard was one reportedly attributed to one of the Prime Minister’s assistants that they were going to “fix” Simon Stevens, the chief executive of the NHS, because he had dared to contradict the Prime Minister over funding. I have a suggestion: instead of trying to fix him for telling the truth, why do they not try fixing the NHS instead?
It is time to be honest about where we are and the true nature of the STPs, which are now finally starting to emerge. Let me be clear that we are not opposed to the idea of a more localised strategic oversight of the NHS and the health sector, but it is becoming increasingly obvious that these plans are putting money ahead of everything else. As the British Medical Association set out yesterday:
“There is a real risk that these transformation plans will be used as a cover for delivering cuts, starving services of resources and patients of vital care.”
The few documents released so far reveal cuts to hospitals, services, beds and, in some cases, staff. As we have set out previously, we are deeply concerned by the lack of public, political and even clinical consultation, with two thirds of doctors not having been consulted on the plans and a third of them not even aware that the STPs exist. What a shambles!
It is also clear that without adequate resourcing, these plans will not lead to financial sustainability, and the only transformation that they will deliver will involve reduced services and longer waiting times. If the plans are as wonderful and transformative as Ministers claim, why will they not let us see them? The secrecy and the deliberate instruction not to release any of the information relating to the plans has only increased concern and cynicism among the public. That was, I believe, a serious error of judgment that the Government will come to regret.
We therefore call on the Government to publish immediately the plans that are not already in the public domain. We also ask them to ensure that there is a full consultation process before any of the changes are implemented. Consultation with the public does not mean presenting people with a completed plan and asking them whether they support it; it means involving them from day one, and the bigger the change, the better it is to start the consultation early. We are already playing catch-up, but genuine engagement can start now.
As we heard from my hon. Friends the Members for Wallasey (Ms Eagle), for Garston and Halewood (Maria Eagle) and for Wirral West (Margaret Greenwood), there are major concerns about the Cheshire and Merseyside STP. My hon. Friend the Member for Wallasey identified the three fatal flaws in the STP process: it is more about finances than patients; it is secretive; and it is run to deadlines that make consultation impossible. Every Member who talked about the Cheshire and Merseyside proposals rightly expressed concern about the devastating effect that they might have on local services. It seems that just about every council in the area has rejected them, or has said that it has not been involved. Indeed, there has been very little involvement with anyone.
My hon. Friend the Member for Garston and Halewood produced what I think was the runner-up in the competition for the worst use of management speak when she quoted the phrase
“The financial component has been a strong driver”.
That is the nub of it—this is all about money. Ministers must stop trying to pull the wool over our eyes and be realistic about the extent of the crisis that is engulfing our health and social care sector, because not one serious commentator or senior NHS manager believes that the sector will be financially sustainable without additional funding.
The Nuffield Trust, the Health Foundation, the King’s Fund, Unison, the Health Committee, the Association of Directors of Adult Social Services, the Local Government Association, NHS Providers, the British Medical Association, the Joseph Rowntree Foundation, the NHS Confederation and Age UK are all calling on the Government to act urgently to address the funding gap. I do not know whether that list was long enough for the Secretary of State—he does not appear to be too hot when it comes to numbers at the moment—but there were a dozen respected organisations there. Will he listen to them? Will he implore the Chancellor not to repeat the mistakes of his predecessor, and to ensure that the health and social care sector is given the funding that it needs? This is the last chance before the crisis overwhelms us. I commend the motion to the House.
The Minister of State, Department of Health (Mr Philip Dunne)
I am very pleased to be able to close what the hon. Member for Ellesmere Port and Neston (Justin Madders) described as an interesting debate. I would describe it as an occasionally high-pitched debate, to which a number of Members made constructive contributions. I must say to the hon. Gentleman that those constructive contributions came from the hon. Member for Central Ayrshire (Dr Whitford), who made a characteristically impressive speech, and from Back Benchers on my side of the House, whose contributions, I might add, outnumbered those from Back-Bench Labour Members by four to three—or one third—although this was an Opposition day debate. Where are the Labour supporters for the motion, I ask the hon. Gentleman? We shall have to see whether they turn up to vote; they certainly were not prepared to turn up to speak.
The funding of the NHS is clearly a subject that is close to the hearts of most Members in the Chamber, precisely because it, along with the contribution of all who work in the NHS—to whom I pay tribute, as did the Secretary of State, but as the hon. Member for Ellesmere Port and Neston failed to do—is what keeps the NHS going. The Government are committed to the NHS, and committed to ensuring that it is free at the point of use.
Jenny Chapman
On a point of order, Mr Deputy Speaker. Is it in order for the Minister to imply that there was a lack of interest among Labour Members, given that the speaking time limit was cut to four minutes, and then—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. It has been put on the record, and it is a matter of public record, but I will say that speeches were made by nine Opposition Members and eight Government Members. Speeches were made by six Labour Members and eight Conservatives. That may help the House, and may prevent any further arguments.
Mr Dunne
Mr Deputy Speaker, the facts speak for themselves, as you have just told us: eight Conservative Back Benchers and only six Labour in an Opposition day debate—what a shambles.
I do not question the fact that the NHS faces a significant challenge. Increasing demand for healthcare is a consequence of our ageing and growing population. It is our determination to look after each and every NHS patient with the highest standards of safety and care. These all contribute to the challenge, but, despite increasing pressures, the NHS is rising to meet this challenge, carrying out more than 5,000 operations every day compared with 2010, and handling 780,000 more accident and emergency attendances in the second quarter this year. That is 15.1% more than in the same quarter in the last year that Labour was in office. Today it is the Conservative party that is the party of the NHS. That is why we pledged more than Labour and why we are delivering more funding, with a higher proportion of total Government spending going into health in each year since 2010.
Some hon. Members have drawn international comparisons on spending. I gently remind the more excitable Opposition Members that, according to the OECD, total health spending in the UK for 2014 is 9.9% of GDP, which is 10% above the OECD average of 9% and just above the EU15 average of 9.8%.
Several hon. Members have today also questioned the figures around the rises in funding that we are providing over the term of this Parliament. I welcome confirmation from my hon. Friend the Member for Totnes (Dr Wollaston), the Chairman of the Select Committee, that she can see how the Secretary of State arrives at his figures, and she graciously conceded that both sides are correct. I want to focus directly on the straightforward maths.
Dr Wollaston
All I clarified was that the way it had been arrived at is not a way that the public would understand health spending, so I think the Minister is perhaps taking my words out of context, if he will forgive me.
Mr Dunne
We never claimed that we were increasing the Department of Health’s budget; we were talking about the increases to the NHS. For complete clarity, in 2014-15 the NHS budget was £98.1 billion; in 2020-21, it will be £119.9 billion. For Opposition Members who cannot do the maths, that is a £21.8 billion increase in cash terms to NHS England, or £10 billion in real terms. We promised £8 billion; we are delivering £10 billion.
We also listened to NHS leaders’ requests for a front-loaded settlement and delivered on that—it was welcomed by hon. Members in today’s debate—with £6 billion of the £10 billion increase coming by the end of this year, including a £3.8 billion real-terms increase in this year alone.
We have also created a £1.8 billion sustainability and transformation fund for the current year to help providers to move to a sustainable financial footing. This fund will mainly be allocated to emergency care provision, which faces some of the greatest demand growth and financial pressures within the system.
This brings me to the next important point I want to address. While more funding is obviously welcomed, hon. Members have drawn attention to rising deficits in the budgets of NHS providers. We recognise that stronger financial management is required to turn this situation around, and we have introduced robust governance arrangements to get things back on track. There are four main elements to this plan: extra investment in the spending review, as I have discussed, and freeing up local government to spend more on adult social care; restoring financial discipline in the short term, through the measures set out by NHS England and NHS Improvement in July, with a wide-ranging set of actions; reducing demand for acute care in the longer term; and driving efficiency and productivity across the provider sector, building on the work of Lord Carter, who has identified large variations in efficiency across non-specialist English acute hospitals, and controlling cost pressures. The need to reduce variations was raised by my hon. Friend the Member for South West Bedfordshire (Andrew Selous) in his very constructive contribution, and by the hon. Member for Strangford (Jim Shannon). We agree that we need to reduce the variability in the poorly performing trusts and bring them up to at least the average standard, if not higher.
We are now beginning to see the first fruits of the plan, with the publication last Friday of the figures for the second quarter deficit, which has been reduced to £648 million, down from £1.6 billion in the same period last year, representing a £968 million improvement. Progress halfway through the financial year is therefore encouraging, but there is no room for complacency. That is why the system needs to stick to its strong financial plan, supported by our investment and by a series of measures set out to help hospitals to become more efficient and to reduce the use of expensive agency staff.
Several hon. Members talked about the sustainability and transformation plans, 28 of which have now been published. The remainder will be published by the end of next month. Half of the Labour Members who spoke in the debate talked specifically about the STP covering Cheshire and Merseyside. It was disappointing that only one of those three Members was able to attend the Westminster Hall debate earlier today in which we discussed conditions in Cheshire and Merseyside. I remind Labour Members that that STP was led by the chief executive of Alder Hey hospital in Liverpool, with whom I would strongly encourage hon. Members who are complaining about a lack of engagement to have a conversation.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. If the Minister is not going to give way, the hon. Lady will have to sit back down.
Mr Dunne
I have already said that I will not give way.
I encourage all Members to engage with STP leaders in their area so that they can play their full part in considering how these plans should be taken forward. I remind the House that Chris Ham, the chief executive of the King’s Fund—
Mr Deputy Speaker
Order. If the Minister wishes to give way, he will do so. The bottom line is that the hon. Lady is quite right to ask him if he will do so, but we cannot have people standing up and shouting—[Interruption.] We do not want people on one side saying no and people on the other side saying yes. The bottom line is, I want the Minister to get to the end. He may give way if he wishes to; otherwise, he should carry on.
Mr Dunne
Thank you, Mr Deputy Speaker. I have explained to the hon. Lady that I do not intend to give way to her. I have only a limited amount of time left, and I would like to remind her of what Chris Ham, the chief executive of the King’s Fund, said. He regards the STPs as
“the best hope to improve health and care services”.
Hon. Members referred to the role of the independent sector in the provision of NHS care. The test for commissioning decisions must always be the value provided for patients and taxpayers, not the type of provider. The vast majority of NHS care has been and will continue to be provided by public sector organisations, but Opposition Members would do well to listen to Stephen Dalton, the chief executive of the NHS Confederation, which represents commissioners and providers of NHS services, who wrote today in The Guardian, of all papers, that private and wider independent sector health care providers
“increase the system’s capacity to respond to demand, help meet waiting time targets and enable investment bring important benefits for patients—most of whom are entirely relaxed over who provides their care, so long as it’s of high-quality and remains free at the point of use.”
I entirely agree with him.
My right hon. Friend the Secretary of State and I have acknowledged that the NHS faces challenges, and I recognise concerns raised by many in the House today. As I have made crystal clear, however, this Government are fully committed to the NHS.
Mr Nicholas Brown (Newcastle upon Tyne East) (Lab)
claimed to move the closure (Standing Order No. 36).
Question put forthwith, That the Question be now put.
Question agreed to.
Question put (Standing Order No. 31(2)), That the original words stand part of the Question.
Waste transfer station in Scunthorpe
(8 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text
Nic Dakin (Scunthorpe) (Lab)
I rise to present the petition of several hundred residents of Scunthorpe county constituency.
The petition states:
The Petition of residents of Scunthorpe County Constituency,
Declares that there is strong opposition on the grounds of smell, noise, vermin and pollution to planning application WD/2016/1556 which has been submitted to North Lincolnshire Council proposing to build a waste transfer station on Sunningdale Road, Scunthorpe. The petitioners therefore request that the House of Commons urges North Lincolnshire Council to refuse planning application WD/2016/1556, which seeks to build a waste transfer station on Sunningdale Road in Scunthorpe, on the grounds of smell, noise, vermin and pollution.
And the Petitioners remain, etc.
[P001981]
Flooding: River Medway
(8 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Tom Tugendhat (Tonbridge and Malling) (Con)
It is a privilege to be here for my first Adjournment debate on a particularly topical matter: flooding along the River Medway and its tributaries. The recent storm has brought some serious flooding across our country. I am sorry to have to report that some properties have been flooded in Edenbridge in my constituency. I am very grateful to the flood wardens in Edenbridge, Tonbridge and across the community who have done such sterling work not only in warning people about the floods but in ensuring that drains were cleared and culverts were not blocked. That has prevented surface water from becoming a problem.
Surface water and more serious flooding has been an issue for us in Kent in the past, although Kent is rightly recognised as the garden of England and has some of the most beautiful countryside in our land. I am blessed not just to represent it but to live in it. This unites me with all those who live from the coast to the High Weald, whether they are “men of Kent” or “Kentish men”—a distinction based on which side of the Medway they are from and whether they come from Jutish or Anglo-Saxon stock.
The river has shaped much more than just the names of the people. It has carved its way through our history and is reflected in two of the towns that I have the privilege to speak for in this House—Tonbridge, with the Medway running through it, and Edenbridge, with the tributary, the Eden, running through it. Both testify to the importance of the river in our county’s life. Further downstream, towns such as Maidstone and Rochester have grown over the centuries as a result of the river providing an important trading link with neighbours. Communities have grown up around the river because of what it offers. The Medway is no different. The floodplains offered fertile fields and later cheap development options with good flat land.
It is no wonder that the history of flooding long pre-dates my time representing this wonderful community, but it has also marked me. Three years ago, just weeks after being selected as the Conservative candidate for the seat of Tonbridge and Malling, I found myself making some of my first visits as a candidate to local villages. Sadly, many were under water. I can vividly remember seeing the impact of floodwater in Hildenborough in January 2014, when I visited with Councillor Mark Rhodes, now the mayor of our wonderful borough council.
Mrs Helen Grant (Maidstone and The Weald) (Con)
I congratulate my hon. Friend and neighbour on bringing this important debate before the House. As he knows, my constituency was devastated by floodwater in the Christmas floods of 2013, and even now some of those areas are not fully recovered. Does my hon. Friend agree that in addition to everything that the Government are doing in respect of flood defences, they should also earmark funding for the more natural flood defence schemes, such as the four-acre wetlands site in Marden in my constituency, which can hold up to 15 million litres of floodwater? I am sure my hon. Friend is aware that many of these schemes are low cost, low tech and low maintenance, but very effective.
Tom Tugendhat
My hon. Friend and neighbour makes some persuasive points. I shall shortly speak about some local flood defences.
The Brookmead estate and surrounding roads, which I visited with the present mayor, were struggling to recover—as my hon. Friend and neighbour pointed out, some parts are still struggling to recover—from flooding by what to some may sound like a very small amount of water. In many parts it was just over a foot, and sometimes only a foot and a half, of water, but the damage done, even by so little water, can be overwhelming.
That Christmas will not be forgotten by me and, I know, by many residents, some of whom are still struggling to get insurance deals sorted out. Having been elected their MP, I am proud to be here representing them, but I am also conscious that flooding is one of the most pressing issues for me to solve.
The underlying causes of the massive Christmas 2013 flood have not changed significantly in the past three years, unfortunately. We all know that these instances may be getting more frequent. That catchment area flooded severely in 1947, 1958, 1960, 1963, 1974, 1979 and 2000, before the 2013 flood, and these are just the major events. Localised flooding on tributaries can occur much more often.
On Saturday 25 June this year, when many people were either celebrating or mourning the result of the referendum, very few people noticed that homes in Ightham, a beautiful village to the north of the community that I am privileged to represent, were being swamped, following only 33 millimetres of rainfall in just two hours. Busty stream was not able to cope and burst its banks, and the village suffered what the Environment Agency calls a one-in-19-year flood. Today, five months on, many residents are still not back in their homes, and sadly, they are not alone. In Hadlow and East Peckham, recent localised floods on the River Bourne have forced people out of their homes, while in Penshurst, Chiddingstone and Edenbridge, the River Eden has threatened to burst its banks many times since 2013. All these tributaries feed into the River Medway and underline the importance of finding solutions that address the underlying causes of these localised floods without simply passing the problem on to communities further downstream.
Let me take Tonbridge as an example. The new 320-metre flood wall at Avebury Avenue shows a local solution that works. Following restoration of the ground height, 80 homes in the Barden Road area, which were flooded in 2013, are now less at risk from the river. However, the scheme works only because the new walls work in conjunction with existing defences at Leigh and in Tonbridge town centre. Each individual solution must be part of a larger strategy for flood mitigation along the wider catchment.
I recognise that communities in the River Medway catchment are not the only ones in the country that flood. Indeed, we in Kent have great sympathy with the people of Somerset, Yorkshire and Cumbria, who have had their own dreadful floods in recent years, and Government funds to help those communities are welcomed by us, too. Both the larger schemes and the smaller projects, such as the £4 million investment in riverside footpaths in Cumbria, show a Government seeking to address the causes of flooding events. However, every time there is investment elsewhere, Kent residents rightly consider its effectiveness and ask whether such defences could help in our county, too.
Finding solutions to flooding on the River Medway is important for not just Kent but our country, because so much more depends on it than simply the protection of homes. Yes, our catchment area has 3,000 properties at risk of flooding, half of which are in Tonbridge and Hildenborough, with 500 more in East Peckham, but it is about more than that. Kent is also an economic powerhouse, and many businesses that rely on the ability to operate even in severe weather will be protected should we get the appropriate level of protection.
That is why I support the creation of a Medway flood action plan, which would bring together local authorities, businesses and residents, as happened in Cumbria and Calderdale. Indeed, the Cumbria model, which was well championed by my hon. Friend the Member for Penrith and The Border (Rory Stewart), is rightly recognised by the Department for Environment, Food and Rural Affairs as a central feature of its 25-year environment plan. I hope that success can be mirrored under the banner of a Medway flood partnership. I look forward to its work starting in the new year—it would certainly have my support, and I hope it would have that of the floods Minister, too. Having a flood partnership panel on the horizon would be very popular, as it offers the possibility of a collective solution—one that is cost-effective and that does not cause unnecessary problems elsewhere.
That would support the work already done by the Environment Agency to protect each community and would reinforce the thorough work it has done to demonstrate where the greatest gains can be made. Those inquiries all point in the same direction. It will come as no surprise to the Minister, who is very aware of this issue, that the most viable scheme involves the enlargement of the Leigh flood storage area, the Hildenborough flood alleviation scheme and the East Peckham flood alleviation scheme. That is where resources for capital projects should be directed, with the Government also being clear that property-level resilience should be explored, where feasible, to deal with the 350 properties that may fall outside the effectiveness of those schemes. Where community defence projects are shown by agencies not to be viable, the Government should commit to property-level resilience. The fact that collective defence does not work does not mean that people should be left out. I am told by the Environment Agency that that applies to communities bordering my own.
For my community, however, tomorrow will be the defining moment, as we very much hope to hear from the Chancellor’s autumn statement the outcome of local growth fund allocations. I am sure the floods Minister will agree that the bid for the Leigh flood storage area is impressive and compelling, and it would be deeply disappointing to everyone involved were the £4.5 million requested not provided.
This bid is crucial to our community. It has the third largest amount of “other funding” of all the south-east local enterprise partnership region bids. It includes contributions from local businesses in East Peckham, from Kent County Council, from Tonbridge and Malling Borough Council, and contributions in kind from Southern Water and Tonbridge School. This is a true community project and, with the Environment Agency's commitment of £15.5 million of flood defence grant in aid, a viable one too. The Environment Agency’s contribution is not symbolic. It understands better than anyone that the project would increase capacity at Leigh by 30% while constructing much needed local embankments at Hildenborough and East Peckham. As I mentioned earlier, those projects work in conjunction with each other to improve the wider catchment area. That was why the then Prime Minister, David Cameron, promised Government funding on his visit to the area in the aftermath of the Christmas 2013 floods.
However, there is a wider issue at stake along the River Medway and all its tributaries that goes beyond individual bids through the local growth fund and localised schemes in particular villages—the strategic importance of the Rivers Medway, Eden, Beult, Teise and Bourne to Kent and to the wider south-east region. The Government have been very clear in highlighting the growth that they want to deliver in our part of the country over the coming years, and that depends on investment and people—and, in turn, on viability. This project alone would enable an additional 2,100 homes to be built in sensible locations in an area of predominantly green belt in the south-east of England. It would also deliver over 13 hectares of employment land by 2031, roughly equating to 2,900 associated jobs. The Government targets are rightly ambitious, and to succeed we need to address the creaking infrastructure of the towns and villages nearby. The long-term economic plan, about which we all once heard so much, would focus on these communities to ensure that we have every possible option open to us locally to plan for the future.
Tonbridge and Malling Borough Council is currently consulting on that future through its local plan, and has shown that without significant investment in local flood defences it will be unable to deliver the growth required by Government. The consequences of a funding shortfall would be severe. Investors would be deterred from coming to the area, new buyers would be priced out of the market due to a lack of supply to keep up with Government demand—or rather popular demand—and current residents would remain at severe risk of flooding. For the cost of a rather modest house in Chelsea, thousands would be left at risk.
Further upstream in Sevenoaks district, the demand for more services in Edenbridge is increasing, yet without additional defences on the River Eden, land will not be available to make these important developments. The doctors’ surgery needs more space, as do many in the town of Tonbridge, but their search is severely limited by flood risk in the town. Localised projects that tie in with the collective aim of the catchment could help to solve a variety of problems that our towns and villages face.
I feel it only right to end by referencing the importance of finding solutions to flooding on the River Medway and its tributaries for each individual community involved. A trip upstream from its mouth near the Isle of Grain through Aylesford, Maidstone, East Peckham and Tonbridge will show to all just what a beautiful county Kent is. It will also demonstrate the reliance that each of the communities places on the river, and how economic and cultural links have been forged by the connections it provides. Each of its tributaries, from the Beult and Teise to the east, to the Bourne to the north and the Eden to the west, have seen communities built around them. They no longer feed the tanner’s yard and the cricket ball factories, but they are still at the heart of our life. It is crucial that this Government make their contribution to ensuring that Kent has the ability to grow and to deliver its plans in the region. That is important not only for the Government but, most of all, for the people of Kent. The work has been done and the options are now present for each town and village. Some will require larger capital schemes, while others will require property level resilience to deliver the appropriate outcome. Each has its place.
Christmas 2013 is still in my mind, and I know just how much of an impact it has had on many others who lived through that night and the past three years. We all know that it could happen again at any time. I hope that the Government will do their bit so that next time we flood—sadly, I fear it will be next time, rather than never—the impact is limited and the people who have made their lives and businesses in west Kent are able to do so in the security of the appropriate flood defences.
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Dr Thérèse Coffey)
I congratulate my hon. Friend the Member for Tonbridge and Malling (Tom Tugendhat) on securing this debate on flooding on the River Medway and its tributaries. He spoke passionately on behalf of his constituents, and I congratulate him on securing his first Adjournment debate in the Chamber; I think this is also my first reply to an Adjournment debate in the Chamber.
I am very aware of the impact of flooding. I have supported my constituents in Suffolk following flooding in recent years, and I understand the impact it can have on people’s homes, businesses and livelihoods. I am committed to doing my utmost to raise awareness of, and to reduce, flood risk. My hon. Friend referred to the Edenbridge flooding today, and he praised flood wardens. I absolutely congratulate them on coming forward, and I thank the Environment Agency for working with Kent County Council in training those wardens. I am also pleased to hear of the preparations that were made to try to alleviate the risk of flooding today.
The Government continue to play a key role in improving protection for those at flood risk. We are spending £2.5 billion on 1,500 new flood defence schemes to improve protection for 300,000 homes by 2021, and we have increased maintenance spending in real terms over this Parliament to more than £1 billion. I understand that we have also spent £825,000 on the River Medway on maintenance in the last year; that is the highest it has been for some time. Moving to a six-year settlement has given the Environment Agency greater certainty on schemes and has made it easier to protect more homes, in contrast with the hand-to-mouth existence that arose from the previous annual settlement.
Mrs Helen Grant
The Minister is talking about funding. I wonder whether she thinks, as I do, that the Chancellor’s autumn statement tomorrow may be the perfect opportunity for the Government to turn their very wise and warm words about innovative flood measures into reality at last.
Dr Coffey
The plans that people at the Environment Agency are working on with DEFRA, which include potential developments on natural management schemes, are exactly the kind of initiatives that I hope might get highlighted in the autumn statement. Nevertheless, we will all have to wait and see.
In the catchment area of the River Medway more than 3,000 properties are at risk of flooding, including 1,500 homes in Tonbridge and Hildenborough and 500 in East Peckham. During the winter 2013-14 floods, more than 900 homes and businesses in Tonbridge, East Peckham, Maidstone, Yalding and other smaller communities were flooded from the River Medway and its tributaries. This flood was the largest ever measured in many parts of the catchment of the River Medway. The Leigh flood storage area is situated upstream of Tonbridge and currently protects 1,200 homes and businesses from flooding. Although the Leigh flood storage area already plays a vital role in protecting those properties, the Environment Agency has also been working in partnership with the local community to improve the level of protection.
I wrote to my hon. Friends in August this year with an update on the work to reduce flood risk on the Medway, and I assured them that we remained committed to working in partnership to provide a scheme that will further reduce the flood risk to local communities. The Environment Agency has been working in partnership with local councils to find the most effective way to reduce flood risk for communities along the Rivers Medway, Beult and Teise. This work included an initial cost-benefit assessment of various options. In April 2014 those partners committed £1 million to fund the development of a business case for the schemes. That work included carrying out more detailed modelling of the Medway catchment.
Currently, the Environment Agency, Kent County Council and Tonbridge and Malling Borough Council are progressing the business case for enlarging the Leigh flood storage area and the Hildenborough embankment. I am aware that that is the favoured option for improving flood protection to homes and businesses in Tonbridge and Hildenborough, because together they will provide additional storage capacity that will benefit more than 1,400 properties. The project to enlarge the Leigh flood storage area and to build embankments is estimated to cost £17.1 million. The scheme qualifies for around £11.3 million of grant in aid, with a further £5.8 million of partnership funding contributions required. Work is also ongoing on plans for the East Peckham flood alleviation scheme, which involves constructing walls and embankments to protect some 560 homes and businesses. The scheme costs £7.5 million and requires £3.25 million of partnership funding contributions, which are being sought, as my hon. Friend the Member for Tonbridge and Malling described, from the South East local enterprise partnership and from local businesses that will benefit.
I am pleased that local partners are already working together to contribute to these schemes, alongside the considerable Government investment, and work is continuing to bridge the current funding gap. I should remind the House that it was under a Conservative-led Government that we changed the funding policy to give every scheme that had a positive benefit-cost ratio a chance to secure some grant funding, rather than the old system of all or nothing.
The Environment Agency is also scoping how it can work with partners to develop a Medway flood action plan, modelled on the successful integrated catchment planning approach of the Cumbria flood action plan. I am very pleased to hear that my hon. Friend is looking forward to participating in that process, and that the newly established Medway flood partnership will have its first meeting in the new year.
In answer to my hon. Friend the Member for Maidstone and The Weald (Mrs Grant), I understand that natural flood management options will be considered for the action plan. Where schemes meet the objectives to which she referred, about the potential reduction in flooding, with economic benefits, such an option is already given to farmers. There are several schemes for which that is the case, although, admittedly, I believe that there is little such opportunity in Yalding.
This debate allows me to highlight what we are doing on a broader level to improve resilience and to be better prepared for whatever arises this winter. No Government can promise that no one will be flooded ever again, but we can learn and act. That is what we did with the national flood resilience review. The review was undertaken to assess how the country can be better protected from future flooding and extreme weather events. I can report that considerable progress has been made to help to prepare for future flood events. We have invested £12.5 million in mobile flood defences, which means that the Environment Agency now has 25 miles of such temporary defences, located in seven key areas, which are available to be deployed flexibly around the country, compared with the 5 miles that was available last year. We also have 500,000 sandbags ready. As my right hon. Friend the Prime Minister has announced, 1,200 troops are on standby if the worst comes to the worst and councils need their help.
Infrastructure providers have been reviewing the resilience of key assets that provide vital services to our communities. They are identifying where they can also protect these assets with temporary defences this winter, while longer-term solutions are implemented. This means that the country will be better protected this winter, and services to our communities will be more resilient to flood events. We have also worked with the private sector to develop a new property flood resilience action plan, which illustrates some straightforward measures that homeowners and businesses can take to improve the resilience of their property to flooding, as well as enabling them to get back in far more quickly if, unfortunately, they are flooded. These can be simple measures, such as in-built airbrick covers, to more substantial works, such as installing a pump, having solid floors or installing wiring so that plug sockets are higher up the wall.
As my hon. Friend the Member for Maidstone and The Weald is in the Chamber, I thought it would be helpful to refer to the flooding that happened in her community. I recognise that, unfortunately, flooding in this area is a frequent occurrence. An event leading to flood depths of more than 1 metre occurs roughly every 10 years in Yalding. The communities of Yalding and Collier Street sit at the confluence of the Rivers Beult, Teise and Medway, which makes the flood risk there particularly challenging. The communities could be flooded by any or all of the rivers.
I am aware that although the Leigh flood storage area helps to reduce downstream water levels on the River Medway, it offers only a marginal benefit because it is 10 miles upstream. Given the local geography and topology, as well as existing developments within the catchment area, flood storage areas constructed on the Rivers Beult and Teise would not be sufficiently large to make a meaningful difference to flood levels in areas such as Yalding and the surrounding communities. That is simply not possible.
The Environment Agency now has a dedicated project manager working with the councils in Yalding and Collier Street to make progress in making properties and infrastructure more resilient to flooding. Early estimates suggest that approximately 350 houses may benefit from such property-level resilience. I am pleased that the Environment Agency will begin detailed surveys of each property in early 2017, and I, too, look forward to hearing the outcome.
The Environment Agency will continue to work with my hon. Friend the Member for Tonbridge and Malling to reduce flood risk in the area and will continue to work collaboratively to deliver projects in this part of west Kent. I assure you, Mr Deputy Speaker, that I have listened to all the comments that have been made today and that the Government will continue to ensure that we are always as well protected from flooding as possible.
Finally, as has been referred to extensively, the autumn statement is tomorrow and there will be forthcoming announcements about LEP funding. If anything changes as a result of those announcements, I will be happy to update my hon. Friend again. Of course, he does have Question 1 at oral questions to the Department for Environment, Food and Rural Affairs on Thursday, when he may talk about flooding.
Question put and agreed to.
Local Government Pension Scheme (Management and Investment of Funds) Regulations 2016
(8 years, 1 month ago)
General CommitteesRead Full debate Read Hansard Text
The Committee divided: - Ayes: 9 / Noes: 4 - Question accordingly agreed to.
Teresa Pearce (Erith and Thamesmead) (Lab)
I beg to move,
That the Committee has considered the Local Government Pension Scheme (Management and Investment of Funds) Regulations 2016 (S.I., 2016, No. 946).
It is a pleasure to serve under your chairmanship, Mr Owen. I am pleased that we have the chance to discuss the regulations.
Some 5.4 million local government employees are members of the local government pension scheme, which covers 81 funds in England and eight in Wales. The LGPS has a market value of just over £213 billion, which makes it one of the largest funded pension schemes in the world and the largest in England and Wales. The regulations include far-reaching changes to the LGPS that give the Secretary of State new powers to intervene directly in its financial decisions.
When such significant changes are made to the pensions of so many people, parliamentary scrutiny is only right and proper. I am glad that the hon. Member for Ross, Skye and Lochaber (Ian Blackford) introduced a Westminster Hall debate on the regulations after 105,000 people signed a petition to oppose them. I am also pleased that the Leader of the Opposition tabled an early-day motion praying against the regulations and that 104 Members of Parliament signed it.
The regulations bring in a raft of changes to say how, where and why the funds of LGPS members will be invested. Some of those changes are desirable, others less so. The Opposition support the pooling of the scheme’s investment assets, with the creation of up to six British wealth funds, which will create cost transparency and cost reductions. However, alongside that welcome and economically sensible policy, the Government have brought in changes that have raised deep concerns from members of the public as well as Members of this House.
The basic principle that underwrites all pension schemes is that pension funds should always be invested in the best interests of their members—that all pension schemes’ investment decisions should be guided by maximising financial return and financial stability for members. That is not just a principle; it is the law. However, since the regulations took effect, the LGPS—unlike any other pension scheme in the country—may not be required to invest in its members’ best interests, because the Secretary of State reserves the right to intervene in how the pension funds of local government employees are invested. If funds are invested somewhere that does not comply with current UK foreign policy or that does not meet the requirements for infrastructure investment, the Secretary of State could intervene. Those are unprecedented powers. No other pension pot in the country is subject to such extraordinary measures: not MPs’ pensions, not civil service pensions and certainly not private sector pensions.
Surely investment decisions concerning local government pensions should be taken by the expert advisers employed to do just that. The LGPS has a scheme advisory board for that purpose, which includes pension experts who trained for years in investing pension funds to maximise profits. Under the regulations, LGPS members are the only pension scheme members in the country to have the investment of their valuable pensions dictated by the political will of a Secretary of State, rather than by the financial and legal expertise of a pension scheme advisory board, or are the Government considering issuing the same rules for trust-based schemes or even for MPs’ schemes? Perhaps the Minister could let the Committee know.
There is also concern that the Government have not listened to the concerns that people have voiced loudly and clearly. In the consultation before the regulations were introduced, 98% of respondents rejected the proposals. Even if the Government did not listen to them, they might have listened to expert opinion in the field. That expert opinion was sought, but it appears that it was also ignored. Respected bodies, from the Local Government Association and the Law Commission to the largest public sector union in the country, have all voiced their concerns about one Department having control over how local government employees’ pensions are invested.
A further criticism of the regulations is that the asset pools created will have no membership representation on the pool governance structures . It should be expected that pension scheme members have some representation in investment decisions, and they should have levers so that their voices are heard. Members of every other pension scheme in the United Kingdom have representatives on the scheme board. The asset pools will hold at least £25 billion of scheme members’ pensions, yet they will have no representation in the governance of those pools. When the right hon. Member for Maidenhead (Mrs May) became the Prime Minister, she signalled a drastic shift in Government policy by speaking of putting workers on company boards; she could start here, with local government pension schemes.
The Minister will already know that it is alleged that the regulations are in breach of article 18 of the EU directive on institutions for occupational retirement provision, which states that pension funds must invest in the best interests of their members. The regulations state that LGPS funds will have to be invested in accordance with UK foreign policy. It appears that those two requirements may conflict. It is unconventional for local government employees uniquely to be subjected to such regulations, given that no other scheme is subject to them. The Law Commission has advised the Secretary of State that his Department must implement article 18 for the LGPS. The Secretary of State has admitted that there may be sufficient grounds for a legal challenge.
Whatever happens once article 50 is triggered, and whichever directives get written into UK law, it is not sensible to bring into law regulations that directly contravene European law while we are still a member of the European Union. The regulations became law on 1 November; has the Department received a legal challenge regarding their implementation? In truth, this is a matter not of political dispute, but of law. The regulations appear to contravene the occupational retirement provision directive under EU law.
I have four questions for the Minister. I understand that he may not be able to answer them directly this afternoon, but I hope that he will commit to writing to me if that is the case. First, why did the Government not take the advice of the scheme advisory board and the Law Commission to revise the regulations and bring them into line with the directive on institutions for occupational retirement provision?
Secondly, does the Minister agree with the legal advice given by the scheme advisory board in 2014, which stated that LGPS members are not afforded the comfort of the Pension Protection Fund and that, in the event of a local authority running out of money, members of the scheme would just become ordinary creditors? Thirdly, has the Minister sent the new regulations and the new transposition table to the European Commission to ensure that the regulations do not contravene obligations under the directive? Finally, the regulations became law on 1 November; has there yet been a legal challenge regarding their implementation?
The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Marcus Jones)
Thank you for allowing me the opportunity to respond, Mr Owen. I am grateful to the hon. Member for Erith and Thamesmead for opening the debate. This is not the first time that many of us have discussed these important issues. I shall once again attempt to tackle many of the misconceptions and reassure scheme members that their pensions are not at risk.
I reiterate that the local government pension scheme is a defined-benefit scheme, for which benefits are guaranteed by statute and are not directly affected by the investment performance of individual funds. Scheme members in different local funds, each with different asset allocations and funding strategies, receive the same level of benefits based on salary and length of scheme membership. Nevertheless, local administering authorities should seek to maximise returns from investments, thereby limiting the risk that town hall pensions would otherwise pose to council tax payers and local services. We have made it clear, on several occasions, that investment decisions must be taken in the best interests of scheme members and taxpayers.
I shall turn now to the main issues raised by the hon. Lady. The regulations are not an attempt by the Government to micromanage pension funds. Under the new investment regulations, administering authorities will be significantly more responsible and accountable for their own investment decisions. They will no longer be constrained by central prescription. We have, for example, removed the limits on the proportion of assets that can be invested in particular ways. With that extra freedom comes a requirement to act reasonably, which brings the scheme broadly into line with private sector ones in that respect and represents a landmark shift in policy.
The power of intervention has been included in the regulations as a backstop power—I reiterate that that is what it is—to protect about £200 billion of assets and 5 million members in the LGPS in the rare circumstances in which it might be necessary to do so. The regulations include a number of safeguards in the exercise of the power, including full consultation with the relevant authority, to ensure that the power is used appropriately and proportionately. Furthermore, the Government’s response to the consultation on the regulations made it clear that the power would be used only where there was clear evidence that an authority was failing to act in accordance with the regulations or guidance.
Let me underline the fact that I respect and understand the strength of feeling expressed by many of the people who responded to the consultation and those who signed the petition that was discussed by hon. Members last month, as mentioned by the hon. Lady. The proper conduct of pensions and pension investments is an important issue that should be of deep concern to us all. That is why, through the regulations, authorities will be required to publish, in their new investment strategy statement, their policies on the types of investment made. Scheme members and taxpayers will be able to scrutinise those statements and hold administering authorities to account.
The hon. Lady mentioned the participation of representatives from individual schemes in relation to pooling, and I hope that I can reassure her by saying that individual schemes will still set their own investment strategy, which will be followed within the pooling structure by the professional investment managers that the pools employ.
Some concern has been directed towards the Government’s position on local authority boycotts, divestments and sanctions against foreign nations and the UK defence industry. The investment regulations and guidance allow authorities to take into account non-financial factors, such as social, environmental and corporate governance considerations, when making investment decisions. In doing so, they must still take proper advice, act lawfully and take decisions that are in the best interest of scheme members and taxpayers. The hon. Lady said that that was paramount in relation to investments made by the schemes, and I completely agree. However, authorities must also act in a way that is consistent with UK foreign and defence policy. Such matters are properly addressed by national, not local, Government.
I would like now to take head on the case of Israel and the Occupied Palestinian Territories, which has been raised a number times in debates over the past months and has clearly been at the forefront of many hon. Members’ minds. The UK has a clear position on Israeli settlements in the occupied territories. Settlements are illegal under international law, constitute an obstacle to peace and take us further away from the two-state solution to the Israel-Palestine conflict. The Government recognise that there may be legal and economic risks to investment in the Occupied Palestinian Territories, stemming from the fact that Israeli settlements are built on occupied land and are not recognised as a legitimate part of Israel’s territory. The new rules expressly permit administering authorities to take those risks into account when making investment decisions, alongside the non-financial factors that I mentioned earlier, such as social, environmental or corporate governance considerations.
It is important that administering authorities act in line with UK foreign policy. They should only pursue boycotts, divestments and sanctions where formal legal sanctions, embargoes and restrictions have been put in place by the UK Government, with whom policy responsibility for such matters should lie. Our guidance on this is no different from that on public sector procurement, which is in turn firmly based on the position in international law.
Another concern that has been raised—I think that the hon. Lady alluded to it—relates to a misconception that the Government intend to use the regulations to compel authorities to gamble scheme members’ money away on infrastructure projects. I make no apology whatever for the fact that the statutory guidance that accompanies the regulations makes it clear that authorities should be ambitious in developing their proposals on infrastructure investment, an increasingly important area that is seen as a suitable option for large pension funds with a longer-term liability. Figures published by the LGPS advisory board in 2013 show that only £550 million— 0.3% of the scheme’s total assets at the time, which were £180 billion—was invested in infrastructure. That falls some way behind other large pension funds that have elected to invest 10% or 15% in the area.
Investing in large-scale infrastructure projects can offer a useful match to the long-term liabilities held by pension funds. Other countries are well ahead of us in their thinking on infrastructure, and it is time we stepped up to the challenge. However, there is no compulsion on a fund to make a certain level of infrastructure investment; that decision is based purely on the fund’s circumstances and situation. The fund’s overriding objectives must be to get best value and to follow the fiduciary duty that it owes to scheme members.
The allegation that the hon. Lady raised—I think that she acknowledged that it was just an allegation—that the regulations may be unlawful under EU law has been looked at carefully. Our situation is different, because the funds in these pension schemes are not related to the employer involved; they are stand-alone funds. Although they are badged as a local area’s pension scheme, those funds are in a secure place where the employers and local authorities cannot access them—there are different rules on how they can be accessed. The legislation to which the hon. Lady refers exists to protect scheme members in pension funds to which the employer has access.
Teresa Pearce
Is the Minister saying that he is under no obligation to send these new regulations to the European Commission?
Mr Jones
We do not believe that the regulations have to be put to the European Commission. As I said, we are putting them in place to give authorities the freedom to invest in any asset class that they think is best, without being constrained by the limits on certain asset classes that were applied under the previous rules. As I have said several times during the debate, we have given repeated assurances that we will not force funds to invest in infrastructure or particular types of infrastructure projects. To protect members and taxpayers, we have set a broad framework for investment decisions in the regulations and guidance and provided the backstop power of intervention that I mentioned.
In addition, the benefits are guaranteed by statute, irrespective of a fund’s investment performance. The assets are separated from those of the sponsoring employer, as I said, which protects the members if the employer fails financially. We are absolutely of the opinion that these extensive protections explain why the LGPS is largely exempt from the directive. The directive increases security for members and safeguards assets from insolvent employers in schemes without such safeguards. In this case, we certainly do not believe the directive applies.
On giving that response, and because of the couple of things I will reply to the hon. Lady on in writing, I will delay the Committee no more.
Teresa Pearce
I thank the Minister for his comprehensive response. Although I understand that these are DB schemes, my understanding is that they do not enjoy the comfort of the Pension Protection Fund. Therefore, if the scheme runs out of money for some reason, future pensioners will not be safeguarded and will become creditors to the scheme as anybody else would. For that reason, although it is a DB scheme, I do not think that it gives as much comfort as some other DB schemes. That is still a point over which we have some concern.
The other issue that concerns me is that the Minister seemed to intimate that this new power would be scarcely used, which makes me wonder why we need the regulations. He said that, if it was used, it would be in consultation with the local council concerned. If such a move was made by the Secretary of State—interfering in a pension scheme is quite an unusual thing to do—I would like the Minister to make a statement to the House about why that was necessary. Although there is some comfort in some of what the Minister said, we are not fully satisfied.
Mr Jones
If I may, I will pick up on a couple of points. As I said at the outset of the debate, scheme members—the people working in local government and the various other areas that form part of the local government scheme—can rest assured because their pension benefits under the scheme are protected by statute, irrespective of which pension fund their scheme is invested in and regardless of the investment strategy and the returns that the fund has made.
On the backstop provision, the Government have made it absolutely clear that that is to be a backstop power. I would liken it to the current best value provisions that allow the Government to intervene in a local authority should it not be delivering best value for the residents it serves. The hon. Lady will know that the Government have only intervened, in a statutory sense, in five local authorities over the past 15 years or so. It is important to point out that that is an example of a backstop provision. The intention is to use this backstop provision sparingly and only when it is necessary to step in to protect the interests of both the scheme members and the local taxpayers, who might have to step in and bail out the LGPS if the investments are not made in a way that provides the best return from those funds.
Teresa Pearce
I thank the Minister for his further confirmation that the power will be used sparingly, but one wonders why it is needed in the first place, since we have people administering pensions whose sole duty is to do what he describes. It is slightly different from the best value provisions.
Mr Jones
Unlike in the 2009 regulations, we are not prescribing the size of investments in particular asset classes and so on. Each individual fund therefore has far more freedom in how it makes investments, but because of that freedom, a backstop position is required, so that the Government can, if necessary, intervene when an administering authority does not deliver on its obligations.
Teresa Pearce
I thank the Minister for his very thorough responses, but I still have so many concerns that I feel we cannot support the regulations. We wish the Committee to divide on the motion.
Question put.
Technical and Further Education Bill (First sitting)
Tuesday 22nd November 2016
(8 years, 1 month ago)
Public Bill CommitteesRead Full debate Technical and Further Education Act 2017 View all Technical and Further Education Act 2017 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 22 November 2016 - (22 Nov 2016)
The Chair
Before we begin, I have a few preliminary points, which some of you may be familiar with. Please switch electronic devices off or to silent. Tea and coffee are not allowed during sittings, but you may drink water. Today we will consider the programme motion on the amendment paper. We will then consider a motion to allow us to deliberate in private about our questions before the oral sessions, and then a further motion to enable the reporting of written evidence for publication. There is an amendment to the programme motion, because one of our witnesses, Poppy Wolfarth from the National Society of Apprentices, has had to pull out because of a family illness.
Gordon Marsden (Blackpool South) (Lab)
On that point, we all try very hard to get the apprentice voice heard, so it is unfortunate that the witness cannot come today. On the original list of witnesses was the name of Baroness Wolf, which has since disappeared, so she is obviously not giving evidence to us today. Do we know the background to that?
The Lord Commissioner of Her Majesty’s Treasury (David Evennett)
I believe she is unavailable to come along today because of other commitments. We are disappointed, but obviously people have full diaries.
The Chair
In the Minister’s absence, I call the Whip to move the programme motion and the amendment to it.
Motion made, and Question proposed,
That—
(1) the Committee shall (in addition to its first meeting at 9.25 am on Tuesday 22 November) meet—
(a) at 2.00 pm on Tuesday 22 November;
(b) at 11.30 am and 2.00 pm on Thursday 24 November;
(c) at 9.25 am and 2.00 pm on Tuesday 29 November;
(d) at 11.30 am and 2.00 pm on Thursday 1 December;
(e) at 9.25 am and 2.00 pm on Tuesday 6 December;
(2) the Committee shall hear oral evidence on Tuesday 22 November in accordance with the following Table:
Time | Witness |
|---|---|
Until no later than 10.10 am | Lord Sainsbury of Turville; Shadow Chief Executive for the Institute for Apprenticeships; National Society of Apprentices |
Until no later than 11.25 am | Association of Colleges; Further Education Commissioner; Sixth Form Colleges’ Association; Collab Group (formerly 157 Group); University College London |
Until no later than 3.00 pm | Ernst & Young; Lloyd’s Banking Group; Santander; Barclays |
Until no later than 4.00 pm | National Union of Students; Learning and Work Institute; Blackpool and The Fylde College |
(3) proceedings on consideration of the Bill in Committee shall be taken in the following order: Clause 1; Schedule 1; Clauses 2 to 23; Schedule 2; Clause 24; Schedule 3; Schedule 4; Clauses 25 to 45; and remaining proceedings on the Bill; and
(4) the proceedings shall (so far as not previously concluded) be brought to a conclusion at 5.00 pm on Tuesday 6 December.—(David Evennett.)
Manuscript amendment made: 1, in paragraph (2), leave out “; National Society of Apprentices”.—(David Evennett.)
Main Question, as amended, put and agreed to.
Ordered,
That—
(1) the Committee shall (in addition to its first meeting at 9.25 am on Tuesday 22 November) meet—
(a) at 2.00 pm on Tuesday 22 November;
(b) at 11.30 am and 2.00 pm on Thursday 24 November;
(c) at 9.25 am and 2.00 pm on Tuesday 29 November;
(d) at 11.30 am and 2.00 pm on Thursday 1 December;
(e) at 9.25 am and 2.00 pm on Tuesday 6 December;
(2) the Committee shall hear oral evidence on Tuesday 22 November in accordance with the following Table:
Time | Witness |
|---|---|
Until no later than 10.10 am | Lord Sainsbury of Turville; Shadow Chief Executive for the Institute for Apprenticeships |
Until no later than 11.25 am | Association of Colleges; Further Education Commissioner; Sixth Form Colleges’ Association; Collab Group (formerly 157 Group); University College London |
Until no later than 3.00 pm | Ernst & Young; Lloyd’s Banking Group; Santander; Barclays |
Until no later than 4.00 pm | National Union of Students; Learning and Work Institute; Blackpool and The Fylde College |
(3) proceedings on consideration of the Bill in Committee shall be taken in the following order: Clause 1; Schedule 1; Clauses 2 to 23; Schedule 2; Clause 24; Schedule 3; Schedule 4; Clauses 25 to 45; and remaining proceedings on the Bill; and
(4) the proceedings shall (so far as not previously concluded) be brought to a conclusion at 5.00 pm on Tuesday 6 December.
Resolved,
That, at this and any subsequent meeting at which oral evidence is to be heard, the Committee shall sit in private until the witnesses are admitted.—(David Evennett.)
Resolved,
That, subject to the discretion of the Chair, any written evidence received by the Committee shall be reported to the House for publication.—(David Evennett.)
The Chair
Copies of written evidence that the Committee receives will be made available in the Committee Room. We will now go into private session to discuss lines of questioning.
The Chair
Good morning and welcome. Would you say a few words to introduce yourselves and the positions you hold, for voice transcription purposes if nothing else? We all know you, but that would be helpful.
Lord Sainsbury: My name is David Sainsbury. I was chairman of the Independent Panel on Technical Education.
Peter Lauener: My name is Peter Lauener. I am shadow chief executive of the Institute for Apprenticeships, and therefore leading its set-up—it will be up and running next April.
The Chair
Before I call the first Member to ask a question, I remind all Members that questions should be limited to matters within the scope of the Bill and that we must stick to the timings set out in the programme motion that the Committee has agreed. For this session we have until 10.10 am, so if we are approaching 10.10 am please do not ask a long question that the witness would be unable to answer before the knife falls. I call Gordon Marsden.
Gordon Marsden
Q Thank you, Mr Bailey. It is a great pleasure to serve under your chairmanship and to welcome our witnesses, both of whom have a distinguished and long-standing interest in this area, which we will pursue.
Lord Sainsbury, these issues about technical education, which you have campaigned and lobbied for hard over many years, have finally reached some form of catharsis—if that is the right word—in terms of the statute book, which for you must be somewhere on the spectrum between huge delight and moderate satisfaction. However, the Bill has avoided committing to the 15 routes that you suggested in your review. Are there any specific additional provisions that you would like to see in the Bill?
Lord Sainsbury: No. It seemed to me to be a very sensible approach to this issue. Always, in these things, you have to combine the basic requirements, but you also need to leave room for flexibility. I do not think that there has been a great argument about the 15 routes, but in the end one needs to have some flexibility built into a piece of legislation, if it is going to last as we hope it will.
Gordon Marsden
Q Yes. I am sure that in later discussions the Minister will want to elaborate on this issue, but there have been statements by Department for Education and Skills Funding Agency officials on the extent to which the routes themselves might be rather flexible, in terms of what they could include, even within the 15. It makes me think of the line:
“In my Father’s house are many mansions”.
We hope that some of those mansions will be explored further on.
I want to press you further, because you said that you are perfectly content with the position as it is, but you have been—forgive the English, or the French—“banging on” about this for years and years. I remember at least two excellent addresses in the past decade that you have given to various organisations on this issue. Yet we know, according to Baroness Wolf and the pamphlet, “Remaking Tertiary Education”, which she has just been involved with, that:
“Technical education, at Level 4 and Level 5, is on the verge of total collapse due to a steep decline in numbers.”
I also note that you have called for more funding for the technical route and for implementation. Would you like to comment further on those two points?
Lord Sainsbury: I think that funding is absolutely key to this whole area. I think that we have organised our system of technical education extremely badly over the years, but it is also true that we have underfunded it on quite a substantial scale. What has been proposed in my report, and what is in the Bill, will greatly improve and clarify the system, but there is still an issue of funding. If you look at the number of hours we fund further education colleges to do this kind of training, you will see that it is extremely low by international standards. So there is a funding issue here, as well as the bits of funding that we have suggested, for example for work placement, which is clearly fundamental and which I hope we can get movement on. There is a more long-term basic funding issue.
Gordon Marsden
We may or may not get some clarity on that in the autumn statement, but I am grateful to you. Mr Bailey, I would like to ask Mr Lauener some questions in due course.
The Chair
Are there any other takers? While other Members dwell upon that, I will invite you, Mr Marsden, to ask your question of Mr Lauener.
Gordon Marsden
Q Mr Lauener, it is a great pleasure to have you with us today. You have an enviable record of longevity in this area of activity. When I was going over your CV and looking at the various things you have done over the years, I was reminded of the famous French statesman Talleyrand. When asked what he had done during the French revolution, he famously replied, “I survived.” You seem to have survived several revolutions in this area, and several Governments. Could you start by saying what the key issue is for you in your new position, as opposed to the variety of positions you have held in the past?
Peter Lauener: Thank you very much; that was a very interesting introduction. The Institute for Apprenticeships does have a key role, and of course as a result of this Bill it will morph into the Institute for Apprenticeships and Technical Education—subject to Parliament. The key thing for me is, first, that it demonstrates employer leadership of apprenticeships and technical education. That is not just about the body at the head of the institute, where we have been very pleased with the high calibre of applicants for positions, but it also refers to all the route panels and other bodies that will bring expertise to the institute.
We have estimated that overall that should amount to between 250 and 300 employers involved in all parts of the institute. The number itself, if it is managed badly, could just become a bureaucratic process, but I think it is vital that those employers bring expertise and credibility, and that when the institute says we need a new standard in this, it is because employers are saying that.
Gordon Marsden
Q I could not agree with you more on that; it is extremely important, going back to the original review in 2012, which talked about the whole area being employer-led, that that is the case. Unfortunately, following a series of untoward events, that has not exactly been demonstrated in the institute’s leadership so far, has it? Because you are the second shadow chief executive who has been there. The first was a lady who had a significantly long civil service career in various Departments, but she did not stay terribly long—I think she stayed about a couple of months. Now you have taken over. I pay tribute to your versatility, because you hold a number of other positions.
The message that has been sent to the outside world, which may be unfair, is that although the Government have talked about the institute being employer-led, they have not put that into practice thus far when it comes to its shadow chief executives. What confidence can we have that the new board, chair and chief executive will have a very strong employer focus?
Peter Lauener: To make an obvious point, the institute does not yet exist—legally it will start on 1 April next year—so the preparations and appointments are being made. When people see the calibre of the board, and the employers on route committees supporting that and bringing particular sector expertise, everyone will see that the institute has employer knowledge, skills and behaviours—to take that phrase—built into every aspect of its operation.
Gordon Marsden
Q Can I just stop you there? You talked about the recruitment process, but can you give us any clarity on when it will be completed and when we might expect to see, as it were, white smoke coming out of the chimney? We are on a terribly tight timescale for this process, with the introduction of the apprenticeship levy and the formal setting up of the new institute.
Peter Lauener: The process for appointing members of the institute is substantially complete. I expect an announcement will be made about that shortly.
Gordon Marsden
Q Is that a civil service “shortly” or a general one?
Peter Lauener: There is not yet a planned date for it. There are one or two items—
Gordon Marsden
Before Christmas?
Peter Lauener: I would be surprised if there was not an announcement before Christmas. Incidentally, we are also planning to publish for consultation the Government’s remit letter in draft to the institute, and I would also expect, again before Christmas, a draft of the institute’s first strategic plan. The intention is that that would then be open for discussion with a wide group of employers and stakeholders, so that the institute, when it is formed, with the employer members and the shadow chair—I will say something about that in a moment—will be able to start its operation with an agreed plan for the 2017-18 year, which has already been subject to wide consultation and which is owned by the institute.
The other thing to add, of course, is that Antony Jenkins has been shadow chair. In my experience, having had several discussions with him, he has brought very visible employer leadership to this set-up phase, and I have been very happy to support him during that. The advertisement for the post of permanent chair is now closed. I expect interviews to take place shortly and an announcement to be made in due course. That might well take a bit longer.
Gordon Marsden
Q It is helpful to hear that you want to keep the employers in a prominent position. It is also important for the wider FE sector, which you are trying to encourage to take up apprenticeships. The Minister’s predecessor, perfectly rightly, exhorted the sector—not with significant success—to increase apprenticeship numbers. On the subject of increasing numbers, I want to ask about capacity—not your personal capacity, which obviously encompasses quite a few areas already, but the capacity of the institute to do some of the things said on the tin.
One of the Bill’s important provisions is the extension to the area of technical education. We welcome that and think it is very important. I am sure Lord Sainsbury does as well. However, that area has capacity issues, too. The Minister and, for that matter, you, have been rather coy about putting out any figures for the staffing of the institute, so we have had to rely on rumours and leaked papers. We were told originally that there were going to be 40 employees, and there is now some suggestion that there will be around 100. Are you able to give any more clarity on that?
Peter Lauener: I expect that when the institute starts at the beginning of April next year, it will have about 60 employees. The planned running costs next year are about £8 million, but the number of staff will need to build up as the additional responsibilities, subject to Parliament, are added. That will probably be another 30 or so staff. I should emphasise that those figures are provisional at this stage. We need to keep them under review. One thing I am looking at is the roles and responsibilities of the Skills Funding Agency and the institute. There may be some marginal adjustments.
Gordon Marsden
Q So you are interrogating yourself on a daily basis.
Peter Lauener: I constantly challenge myself by saying, “Am I using the resources available in the best way possible?”
Gordon Marsden
Q Well, at least you will have a convenient and convivial conversation, because you are one and the same thing, are you not?
Peter Lauener: I am indeed. As I am sure you are aware, I am also chief executive of the Education Funding Agency. It would not be at all appropriate for these three things to be combined on an ongoing basis. As I said at the start, I am very pleased, because of a lifelong interest in and commitment to apprenticeships, to have the responsibility of helping to set up the institute for next April and to ensure that the governance is—
Gordon Marsden
Indeed, and we will not commit you to the two further roles that FE Week cartooned you as having: taking part in the “Great British Bake Off” and “Strictly Come Dancing”.
Peter Lauener: No one has contacted me about those.
Gordon Marsden
Q As we know from Vince Cable, people from this area have a good track record, so you might want to put that on your list.
You talked about the numbers. I think there will be considerable concern in the sector as to what skills these people bring to the table. With that in mind, and given the staff reductions in the Department for Business, Innovation and Skills—of course, this is a machinery of government change—do you expect to be moving across or recruiting people from either the SFA or BIS who have previous experience in this area?
Peter Lauener: We have advertised externally for the key role of deputy directors, where we are looking to fill six posts. We have been very pleased, again, with the quality of applicants, which I think is an indication of the widespread interest across employers and the training and skills sector in the institute being set up. We have had a very good set of applications. From memory, we had 90 applications for those six posts, and we are very confident that we will be able to appoint a broad range of experienced individuals.
Gordon Marsden
Q Can I take you up on that point about a broad range of experienced individuals? That can cover a multitude of abilities or a multitude of sins. Many stakeholders have expressed concern throughout this process—indeed, the Opposition expressed it during the passage of the Enterprise Act 2016, which gave birth to the concept—that the new institute’s board might be too narrow in its experience and focus, as we believe the apprenticeship delivery board has been. Do you have any views on the importance of having, for example, an apprentice or someone from the apprenticeship coalface, as it were, on the board?
Peter Lauener: I think that the institute should certainly be clear how it is going to secure the voice of apprentices in its understanding and deliberations. I do not think that I should comment about the particular membership of the institute, but the principle of having knowledge, understanding and the live voice of apprentices is really important for the institute’s work. Inevitably, there is a lot of focus on employer leadership, but I think we need to look at apprenticeships from the perspective of employers and individuals.
Gordon Marsden
Q My final question is not so much about the membership of the board as about the reception that you want the new institute to get from providers and employers. As you know, a big question that is still being discussed vigorously in the FE sector is the extent to which small and medium-sized employers will be able to benefit from the apprenticeship levy. It is widely believed that gaining acceptance in the SME sector will be critical for the Government to reach their 3 million target. What confidence do you have that the new board will be able to reflect and respond to the SME sector’s continuing concerns that it is not exactly at the front of the queue in terms of the apprenticeship levy?
Peter Lauener: I would extend that beyond the board itself and to the route committees that I have talked about. There needs to be a wide range of employer experience, both from large employers and small and medium-sized employers, in these critical bodies—the route committees—which will be looking at the right standards. Of course, the standard that we are talking about is the standard wherever it is applied; it is about the standard for an occupation and about the knowledge, skills and behaviours that an individual needs to be able to do a job properly for the benefit of the employer. You need the context both of large employers and of small and medium-sized employers to make that work properly.
Gordon Marsden
Q But you understand the point that I am making, I hope. Without becoming too technical, one issue historically for SMEs in taking on apprenticeships has been the lack of back-office support. In my experience—I have employed three apprentices over a three-year period, and being an MP is like running a small business; you juggle all sorts of things—SMEs constantly say that they would love to take on apprentices, and when they do and the apprentices are successful, no one is a stronger advocate for them than SMEs. However, they struggle with back-office support, red tape and all the rest of it. I am not trying to commit you to a specific SME place on the board, but do you understand why those concerns persist? Do you intend to try to provide reassurance about them and, if possible, given your years of unrivalled experience in this area, cut some of the red tape?
Peter Lauener: First, the new technical system—the digital apprenticeship service—that will be introduced from the beginning of next year will be much easier for employers of all sizes to navigate and for individuals to see apprenticeships on the system. That will be open to only large employers at the start, but we would expect to extend it over time.
Secondly, we should not underestimate the role of training providers. Again, under the digital apprenticeship system, most employers will still be using a training provider. They will be able to choose from the training providers on the system. In my experience—I speak partly as an employer in my own organisations of apprentices—organisations are heavily reliant on the training provider to make sure that the training is relevant, well managed and that the trainee is supported through the apprenticeship. I would expect that to be a continuing pattern in the future.
Justin Tomlinson (North Swindon) (Con)
Q I want to build on some of the comments Mr Marsden has made. I used to run a small business, and by accident I employed someone on an apprenticeship because I stumbled across an apprentice, and I benefited greatly. One of the biggest challenges in us reaching the commendable target of 3 million apprenticeships is that lack of awareness from small businesses. I have repeatedly pushed that we should use the business rate mailer to include a rather nice, glossy A5 flier.
It is encouraging that you are talking about this digital portal where there will be a one-stop shop for all the information, but you said at the beginning that that is just for the larger employers. How quickly do you see that being cascaded down to the smaller employers? The reality is that, whatever the political persuasion of the Government of the day, the large employers will re-badge their ongoing training packages to match what is going. If we really are to create some great opportunities, we must include those small and medium-sized businesses that can offer those unique, more bespoke jobs that can fit apprentices’ individual skills and give them a real opportunity to progress. However, those businesses are waiting to be told of this fantastic resource. How quickly can we cascade that information down?
Peter Lauener: I should make it clear that the ability of small and medium-sized employers still to be involved in apprenticeships does not depend on day one of the digital apprenticeship system. We would expect to continue the allocations of funding to training providers—to be clear, that is through the Skills Funding Agency rather than through the Institute for Apprenticeships—which we have operated for many years, for small and medium-sized employers. That will ensure significant continuity in the system. I would expect no risk to the target for growth in numbers.
That will apply for the 2017-18 year. We will need to review that in the context of how quickly the levy-paying employers take up the opportunities to secure apprenticeships under the levy system, so we will monitor that closely. The 2017-18 year is secure, and after that we will review how small and medium-sized employers should be brought on to the core digital apprenticeship service. But even from day one it will be a public-access system and people will be able to see what is on it, so I think it will be a good way of conveying the richness of apprenticeships available.
Justin Tomlinson
Q But people will see it only if they know to go and look at it. Therefore, in theory we are relying on the training providers making contact with them, and when they do I am sure that businesses snap their hands off. However, the training providers do not have huge marketing budgets, so they do not go door-to-door to those small employers.
The Department for Work and Pensions is trialling the small employer offer. It is worth considering sitting down with the DWP and talking about whether there could be joint funding for that offer. In the economy at the moment a lot of businesses have skills gaps, and the idea is that someone in each region or employment area doorsteps an employer and asks, “Do you have a skills gap in your organisation? What is it?”, and then goes back. They could find that, “An apprentice is suitable for you. There are the providers. We will ask them to visit you next week and discuss it over a cup of tea”, and match them together. Therefore, rather than trying to duplicate things, with some co-funding I think you will be able to plug those gaps. That, in my opinion, is the fastest way for us to get to that 3 million target.
Peter Lauener: Thank you very much for the suggestion. I am happy to take that away and look at it. One other thing we operate at the moment, which I think is quite successful, is a dedicated employer helpline, which I think operates 8 am to 7 pm, seven days a week. We get quite good feedback on the information available on that for employers.
Justin Tomlinson
Find a way to sneak it into the business rate mailer—then every business will know about it.
The Chair
I remind Members that we have only 12 or 13 minutes for three further questioners, so could questions be brief and answers pithy? Thank you.
Tracy Brabin (Batley and Spen) (Lab)
Q I applaud your desire to reach out to learners and have a conversation with them during the teething process. However, there does not seem to be a specific requirement in the Bill to have learners on the board, talking to you. They are going to be the guinea pigs. This will be up and running very soon; April seems five minutes away. Can you specify how learners are going to be connected to the board?
Peter Lauener: I cannot specify that in detail at the moment, because that is, properly, something that the board should discuss. With my deputy chief executive, Mike Keoghan, I am making a plan of board activities during January, February and March, to allow the board to focus on all the aspects of its remit and to think about the governance as well. I mentioned earlier that we expect to consult on a draft strategic plan for the institute for 2017-18, and I am sure that that will be an occasion to raise the question and get lots of views back. The board can then discuss it in the January to March period before coming out with its final plan, I hope right at the beginning of April, so that it is clear from the start of the institute’s operation exactly how it will operate across a broad range of activities, certainly including the one that you have mentioned.
David Rutley (Macclesfield) (Con)
Q The Bill supports the occupational categories of quality apprenticeships set out in that excellent document, the “Post-16 Skills Plan”; they include construction, and engineering and manufacturing. That is fantastic and a real step forward. Do you both believe that the Bill provides an effective ability to redefine those categories as economic sectors evolve? Secondly, do you believe that the mechanisms are in place to enable businesses and employers to have a meaningful role in redefining those categories as things progress?
Lord Sainsbury: It comes back to the original question. You have to have a certain amount of flexibility. As far as I can make out, that flexibility is there, and it is important. Of course, it is also important that we do not let the system degenerate, whereby everyone goes back to saying, “I want something specifically for my business or a very small group of businesses.” It is very important that one keeps down the number of routes, but exactly what categories they include will have to be for the people running those routes to say. I think we have made quite a good stab at doing that, but there are one or two cases where you can certainly argue about whether we got the right job in the right route.
Peter Lauener: It is absolutely vital that the institute actively manages the system of apprenticeship standards. For the past couple of years, while new standards have been developed by trailblazer groups, we have not had that picture of what the overall system would look like. Lord Sainsbury’s report helps enormously with that. An early priority for the institute is to develop that map, communicate it, review it actively and spot areas that need updating. I imagine that one or two of the early standards will, with hindsight, look a little bit narrow, so they ought to be reviewed. Every standard has a review date anyway, but the institute, through its route committees, will need to actively manage that.
One of the great virtues of the German system is its absolute clarity about the number of apprenticeships, routes into apprenticeships and things like that. If you talk to people in Germany, they often say, “We’d like the system to be more flexible.” I think the institute has the opportunity from the start to build in that flexibility and responsiveness to the changing labour market.
Naz Shah (Bradford West) (Lab)
Q I have a quick question about the idea that this is going to turn into another 11-plus. What reassurance can you give us about what you have put in place to ensure that the technical route will be as prestigious as the academic route?
Lord Sainsbury: There has been a very long-running argument about this. It is useful to look at the experience of other countries. If you do that, you see that pretty well every developed country has a system of two routes: an academic route and a technical education route. There is quite a variation in the point at which people choose between the two routes, but most of them have it. In most of the successful countries you find the two routes are equally well valued, so there is not a problem of the technical education route being considered inferior. You can have these two routes and both of them be highly valued.
The question we have to ask ourselves is why in our system the technical route is undervalued. I think the answer is because it is a very bad system that does not deliver what people want on the system. What they want above all is to be able to take a qualification and for that qualification to work in the marketplace. What that means is that you can go along to an employer and say, “I have got this qualification,” and the employer will give priority to you over somebody who has not got the qualification. That is not true of our system. The first thing you have to do to make the technical education route valued is to make it deliver for young people something of value to them, which is the ability to get a better job with security. That is the issue. It is not about age of selection or the fact that you have two routes.
Peter Lauener: I agree 100%.
The Chair
That brings us to the end of the questions. I thank the witnesses on behalf of the Committee. We will move on to the next panel, who are all here. Thank you very much.
Examination of Witnesses
David Hughes, Professor Alison Fuller, Richard Atkins CBE, Bill Watkin and Ian Pretty gave evidence.
The Chair
We will now hear evidence from the Association of Colleges, the Further Education Commissioner, the Sixth Form Colleges Association, the Collab Group and Professor Alison Fuller from University College London. We have until 11.25 am. Welcome. Please introduce yourselves for voice transcription purposes.
David Hughes: Good morning. I am David Hughes, chief executive of the Association of Colleges.
Professor Alison Fuller: I am Alison Fuller, professor of vocational education and work at UCL Institute of Education.
Richard Atkins: I am Richard Atkins, the FE Commissioner.
Bill Watkin: My name is Bill Watkin and I am chief executive of the Sixth Form Colleges Association.
Ian Pretty: I am Ian Pretty, chief executive of the Collab Group.
Gordon Marsden
Q I warmly welcome all of our panel, each distinguished in different areas. Who to pick on first is an invidious choice, but given the context of the previous conversations, perhaps I could start with David.
We have just heard from Peter Lauener an expansive view of where the institute is going. He talked about its digital abilities and I think the words he used were that standards would continually need redefining. As that was going on, hammering in my brain was “capacity, capacity, capacity”. You have expressed some concerns about the capacity. Would you like to elaborate on that?
David Hughes: Thank you for picking on me first. The capacity issue is partly about timing as well. I am concerned—we are very concerned—that the changes are being rushed because of the timing issues. Sixty people sounds like a small organisation to deal with 15 routes and 250-odd employers. There is a big job to be done and it does feel as though a lot is changing at the same time.
What we have been doing with Peter and his team and with officials in the Department is trying to think through the risks and to work with them to make sure that we can address any problems that occur very early on. When you are fundamentally changing the funding system, there are lots of unknowns. The big unknown is how employers will behave in the new system—nobody can predict that. It is in all our interests to make sure that we do not lose capacity in the whole system, let alone in the IFA itself. We have offered to work closely with Peter and his team to try to address any problems at a really early stage, and I am really pleased with the response so far.
Gordon Marsden
Q That is good, and highly valuable. One of the things I did not mention is the fact that the Government used to be able to use the UK Commission for Employment and Skills as a backstop—sometimes a very short-term backstop—in terms of delivery mechanisms out of the Department, but of course they rather unfortunately abolished that earlier this year. On that point, because as you well know there has been a lively debate between Ministers and your membership in the past as to whether they are doing enough for apprenticeships, are you confident now that your members have got the message about the new institute, or are there particular issues that you would still like to highlight?
David Hughes: I think there are three key issues. One is funding, and it was good to hear Lord Sainsbury talking about the funding issues. If we want a really high-quality system, we need to invest in it. I still find it completely illogical that we fund 11 to 16 at something like £5,500 per head, 16 to 18 at about £4,000, apprenticeships at about £1,500 per head and higher education at £9,000. In HE, we have index linking coming in with the new teaching excellence framework which we do not have in FE. If we want a high-quality offer at 16 to 18, which we do, we need to get the investment right.
Two other issues that go with that investment, and are really critical to allow colleges and other providers to invest in quality themselves, are stability and certainty. The thing that we want more than anything else, both on the technical education side and on the apprenticeship side, is some stability rather than constant change and churn, and certainty about those changes, so that my members and others can invest over the long term in the equipment, the people, the relationships and the outreach to students and potential apprentices. We have had a blizzard of changes over the past 10 or perhaps 15 years, and that causes my members and others to be cautious about the investment they make. The biggest risk to all this is the lack of certainty for the future. It is difficult, because how do you provide certainty? Some big statements from Government would be really helpful.
Gordon Marsden
Q You are absolutely right to make that point. The old joke used to be that when the Minister for HE sent a letter to universities it was more like the opening gambit of a conversation, or, “Would you like to do this?” whereas the letter that went to FE just said, “Do it.” I think and hope that we have moved on from there, Minister, and I hope that will not be the case in quite the same dirigiste way in the future. One of the issues that employers and other sectors are raising with me is just how rapidly some of the things, such as the digital system, are going to come on board. If that does not work to start with, that is going to be a further downer and concern for your members, is it not?
David Hughes: There are lots of concerns. The comparison with HE is quite interesting. Last week, the Higher Education Funding Council came out with a report on the financial picture for the sector; it is very concerned that there is only a 4.3% surplus predicted for next year. The FE sector has no surplus. That is my investment point. Quality needs investment, and FE colleges do not have that investment capacity at the moment. Issues around the digital service would and could be overcome by providers and colleges working closely with the employers they already work with, and that is one of those issues of timing and capacity. So there is a partnership approach that we are trying to push very strongly.
Gordon Marsden
Q Ian Pretty, you have been in post for about a year now. You have come to what we used to know as the 157 Group, now Collab, from a distinguished background as a career civil servant and also having spent time in the private sector. Having been in post for a year, what have you learned and what are your members telling you about capacity issues that is relevant to the Bill and particularly to the specific questions we have raised about the institute’s capacity to do all the wonderful things Peter Lauener told us about?
Ian Pretty: I agree with a lot of what David said. In terms of the capacity issue for the institute, you have to get the right resources in there. As you said, I am a former senior civil servant and a tax inspector, so I have a lot of experience in those things. I would focus on capability as well. You can have 60 people or 100 people in the institute, but have you got the right capability? I would be nervous if the institute was completely staffed by civil servants. If this organisation is about co-creation with the private sector and the education sector, you need people with the capability to understand how business thinks and how business operates. You also need people who understand how the education providers operate. On the capacity issue, in terms of raw numbers you will cite something, but capability is more important.
Gordon Marsden
Q You have to drill down, basically; that is what you are saying.
Ian Pretty: Yes, and you have to have the right people sitting in that institution. If the institute is focused on the skills plan, as the Government propose, that is sensible to me. Given my background, one thing I am mindful of is that we spent a huge amount of time—displacement time—on the area-based reviews. If we had had the skills plan and the insolvency regime in place, the ABR process might have been a smoother and easier process, because there would have been a logic to it.
Gordon Marsden
Q Your members include a significant number that have HE capacity. We were talking yesterday in another place about HE issues. One concern that has been expressed to us is the institute’s ability to grapple with the HE dimension of higher skills, which I am sure Lord Sainsbury would think is important, and treatment in terms of HE in FE colleges. Sometimes, dare I say it—I certainly felt it in the White Paper—it is an afterthought, rather than an integral part of the solution. What do you think the institute and Ministers need to do to ensure that the role of HE in FE is more fundamentally understood by Departments?
Ian Pretty: In terms of the institute’s capabilities and the people who are in there, it is important; you are right. Most of our members have HE as part of their remit. This goes back to the whole issue around the skills plan and the Sainsbury review. If you create the right technical pathways, you need to understand through that, from level 1 up to 6-plus, where that will be delivered and the role of HE within that. It could be HE in terms of the universities sector, but in our case it is HE sitting within the FE sector. That is a growing business for us, particularly around things like degree apprenticeships. It is important that the institute understands HE and plays an active role in understanding how HE operates within the FE sector.
Gordon Marsden
Q Finally, I will come to you, Professor Fuller. I am not going to credit you with quite the longevity—perhaps I should, but never mind—that I gave to Peter Lauener, but you have been around for quite a long time in this area. You have seen promises and Select Committees come and go. In the things you have seen and heard so far about the new architecture that the Government are proposing, which do you think are good and positive steps forward, and which are you feeling a bit more queasy about?
Professor Alison Fuller: I certainly welcome the renewed focus on what we used to call vocational education but now call technical education, and the seeming rise of it up the public policy agenda. However, today and in this Bill what we are trying to scrutinise is what stands behind that. We have been concerned about that for years, and it is about the seriousness with which this is taken. My colleagues have talked very clearly about capacity and capability issues. When we look at comparative countries, we see much more stability and longevity about arrangements for drawing in all the key constituencies to the decision-making processes. That kind of stability is there.
In addition to the stakeholders that have been mentioned, I would also say that the professional bodies and associations are key to this as well, because we are talking here about how these new routes will articulate during a career with the ladders of progression that exist. The professional bodies and associations are essentially the guardians of that kind of area.
In terms of concerns, it is really the substance and significance of the routes that are being proposed that concern me, if we are going to try to create something that is really high quality and which begins to address the parity of esteem question, which one of the panel was talking about earlier. The reality is that we are talking about a proposal for two-year programmes, which are called full time, but if you dig into what full time means, the definitions can be as little as 12 to 14 hours a week. If you phone up a college and say, for example, “I am looking to do a level 3 course in business administration. How many hours would that be?” you will typically be told 12 to 14 hours. If you look at the benefit rules, full time is defined as around that time. Potentially, we are looking at trying to help young people to reach a much higher level—level 3, hopefully, after two years—but with very little input. That is a real concern for me. That raises questions about how the routes are articulating downwards with the GCSE and upwards to higher education.
There is a big issue about intensity. Again, when we compare with other countries, we see that the full-time vocational routes tend to be longer. They may start a bit earlier. We have at the moment 16-plus, 16 to 18; they may start at 15, but they will typically have three or even four years, ending up at a good level 3 standard. That is an issue and has huge implications for resourcing and funding, which David and others have raised.
Gordon Marsden
Q You are talking about length. There have been a lot of conversations, some of them a bit semantic, about the pre-apprenticeship route, particularly if we want young people to get good-quality apprenticeships. There is obviously the traineeship issue, or call it pre-apprenticeship, or whatever. Are you saying, Professor Fuller, that the actual process needs to be longer or that there need to be more preparatory steps to get young people—not only them, though they are the key component—who would not otherwise be able to compete for some of the high-quality apprenticeships that will be on offer?
Professor Alison Fuller: Probably both. If you look at attainment at 16, we have just had recent figures that show that still it is only just over 50% of young people who are achieving five GCSEs A to C grades, including English and maths. We know that those who are achieving that benchmark tend to stay on in the school route and take A-levels or a combination of A-levels and BTECs, which are sometimes called applied A-levels. That particular route has been quite successful in supporting social mobility and particularly progression to higher education.
Unless we start to eat into that population, we are talking about young people who have not attained that level at 16. We are proposing what we would all want to be a very high-quality technical education route within two years to get to what point? That is where we need to take a check and be realistic about what we might be able to achieve in two years on those kinds of numbers of contact hours and that kind of period.
We know that a good-quality level 3 standard is a really strong platform for career progression and engagement with employment. So for a good majority of our young people at 18 or 19, that is the kind of real aspiration we should be aiming for. It seems to me that without a much stronger commitment to what the resources are going to be, and what the container is going to be, if you unpack what a route is, we could end up with young people who have not made sufficient progress to reach the platform where they are going to have a secure stepping stone into the labour market and good-quality apprenticeships.
We know that at the moment 60%-plus of apprenticeships are at level 2 and that not many 16 to 18-year-olds are doing them—I think it is about 130,000. So there is quite a lot to do to ensure that all apprenticeships are as good quality as the fantastic ones that we know do exist.
Tracy Brabin
Q David, I have been told that in some circumstances members of staff such as receptionists without relevant qualifications or training are carrying out careers guidance in colleges as a tick-box exercise. Are you concerned that there is no careers guidance provision in the Bill?
David Hughes: I am very concerned if that story about reception staff is true, because it is an incredibly important area of education and, of course, it does not start at 16; it starts a lot earlier. I would echo a lot of what Alison was saying. We need to think about key stage 4 rather than just look at age 16-plus, because the decisions that get made by young people and their parents and carers are critical to their future. We need to think about introducing them to the world of work rather than just providing them with some information about courses, so the work experience and work placements that the Sainsbury report and the skills plan rightly concentrate and focus on are really important to consider for key stage 4, rather than just waiting until 16. We want some of the best young people with good achievements at GCSE at 16 going into the technical route and apprenticeships rather than what we have now, which is mostly that if you do well at GCSE at 16, you take an academic route.
We know that probably about £1 billion is wasted when young people go on an academic route for a year and then move off it because they find it is not suitable for them. We need to stop that happening because that wastes money and, more importantly, young people are using up a year of their life on something that does not stimulate them or motivate them. We have got to go back into key stage 4 rather than just wait. It is critical that we get college information, advice and guidance right, but let us think about careers education through school, not just right at the end, and let us think about persuading the best young people to do technical if that is the right thing for them, because it should be high-quality to attract them.
Kelvin Hopkins (Luton North) (Lab)
Q What David Hughes and Professor Fuller have been saying is striking. I recall comparisons made some 25 years ago by the National Institute of Economic and Social Research and Professor Sig Prais between technical education in Britain and in Germany, Italy and Spain in particular, where they had up to 30 hours a week of contact-intensive pedagogic teaching over a period. In Britain it was nothing like that.
The underfunding of technical education and 16-to-19 education is noticeable. By contrast, at universities—I went there many years ago—you have a few lectures and a couple of seminars and tutorials, so the contact hours are much lower but the funding is much higher. Do you not think we have got this the wrong way around?
David Hughes: For lots of the technical routes, we are getting 12 to 14 hours of contact time, and that pales into insignificance compared to most of our competitors in the OECD. It is a really important issue. It is not just for technical, though; we have now got young people being offered only three A-levels rather than four AS-levels, and that is really shameful. It means that their opportunities to explore at 16 have been limited.
We really must address the investment issue to get the level of support that is required for young people. We are talking about young people who might have careers lasting 50 years-plus. They need a broad education to allow them to become learners, to think about continuous professional development, to change career probably two or three times and to be able to move when technology moves. I do not think that 12 to 14 hours of contact time for the 16-to-19 phase is enough. I do not think that the quality will be high enough or that the choice, even on A-level routes, is good enough, given the funding that is available.
Professor Alison Fuller: I am sure others will want to speak, but I would hate to say, just because we maybe think there is a big contrast in the numbers, that higher education is overfunded. I certainly would not want that message to come through.
There are a couple of other points. One is that a lot of vocational education—I still say that—happens in universities. The expansion of higher education has largely been in relation to vocational higher education courses in applied areas. A big cost of that is in equipment—lab space, technology, machinery and so on—and that same argument is behind suggesting that further education should really be better resourced. Good-quality technical education does not come cheap; the reality is that it is extremely expensive. We need very highly qualified vocational teachers—I include those who are moving in and out of employment, and I am sure Richard will speak about that, because he was part of the very influential report a couple of years ago from the commission chaired by Frank McLoughlin. It is a case of being serious about what it costs to provide a good-quality technical education, in terms of the people, resources, equipment and facilities.
Kelvin Hopkins
Q I wonder whether Mr Watkin would like to say something about sixth-form colleges and the squeeze on funding there.
Bill Watkin: We published a report recently about the impact of the current funding levels, which, although the Government have set them at a certain level, are set at that level following three significant cuts which have cost the sector about 17% since 2011. As David just said, we find that the number of A-levels being offered is increasingly only three rather than four; that minority subjects are being lost—it is not just the high-profile archaeology and history of art, but modern languages and sciences—and that the enrichment support, pastoral support, the activities after college and the careers guidance are all at risk because of low funding levels.
We are also finding, exactly as has been said, that international comparisons show we are not funding enough hours of tuition per week. In Singapore and Shanghai, for example, they are funded for approximately 30 hours a week, whereas in New South Wales it is 26 hours a week. In England it is about 15 hours a week. Of course, the impact of that is that students from more disadvantaged backgrounds will find it harder to use the untaught time. It is not just that there is not enough teaching time to cover the qualifications, but that the non-taught time has to be used effectively. It is much more difficult for young people from disadvantaged backgrounds to use non-taught time well.
Kelvin Hopkins
Q It is a major factor. When Michael Gove was Secretary of State, I asked him why we were having to recruit so many engineers from abroad. He said that we were not training enough ourselves because our mathematics was not good enough and we could not get them up to the standards required. Resource is surely what the problem is.
Bill Watkin: It is certainly one of the problems. There is also the shift in what qualifications are available. To move away from apprenticeships and technical professional education for a moment and talk about the academic curriculum, we have just seen, for example, the loss of use of maths and the loss of statistics from the range of qualifications available. That means that young people coming into a sixth-form curriculum looking to study maths only have one route available for them at the moment. That is almost a commercial decision made by awarding organisations, but it is enormously unhelpful to young people who want to support their studies in engineering and physics by following a course of maths because the only course available is an A-level in maths. We would like to see, for example, a core maths qualification and a part 2 core maths that has A-level branding and equivalence, so that there is an alternative to an A-level maths qualification.
Mike Kane (Wythenshawe and Sale East) (Lab)
Q This is an interesting panel because it represents sixth forms and FE colleges. In Greater Manchester, where my constituency is, further education is a devolved function but sixth forms are not. We have just gone through an area review process, which I supported. Fortunately, we have strong civil servant and political leadership in Greater Manchester, but I can only describe the process as tortuous and complicated. It has come out of a number of reviews around mergers and synergies of FE colleges—it does not affect sixth forms. You get to that position and then have to enter negotiations between the FE colleges about co-operation. That really is a process of herding cats, in my opinion. There are things I would like to say, but this is an ongoing process so I will not say them in public for now, but the Government’s area review programme is going to be rolled out in places that are less well organised than Greater Manchester. It could be a recipe for chaos. Do the panel want to comment on that?
Richard Atkins: It would be best if I started. As you probably know, I have been the FE commissioner for about four weeks. I was not involved in chairing or attending the Greater Manchester review, although I know Theresa Grant, who chaired it. I am going to Manchester in the next three or four weeks to see how things are going and to talk to the individual colleges. I sat and observed the Education Committee scrutinising area reviews about two weeks ago. Generally, I think the process has worked reasonably well. Clearly they begin from a premise that each college is an independent corporation and therefore is able to make its own views. I accept that that can lead to what you describe as tortuous negotiations, because each college needs to be convinced and persuaded of the right solution.
We have now done waves 1, 2 and 3 of the five waves. Nearly 200 colleges have been through area reviews; some 88 of them are working towards merger, 50 of the sixth-form colleges are considering becoming academies, and 62 colleges have confirmed that they want to go for stand-alone status. We have done that in a remarkably short period. Colleges that are changing the nature of what they do can apply for a restructuring facility to support that. We have done that with a remarkable amount of co-operation and good will. I do not think the process is in any way perfect or a silver bullet that will resolve all the structural problems.
It became obvious in the Education Committee that it is different in each area. There are 37 area reviews, based on the local enterprise partnership areas, and experiences genuinely differ from one area to another. If you had told me at the beginning that at this stage, two thirds of the way through, we would have 88 colleges considering merger and that 62 stand-alones have had to carry out a rigorous analysis of their own data to be sure that they can stand alone financially—. I hope that what emerges from the process is a network in which more colleges are financially sustainable. I do not disagree that having those independent corporations gives governors the opportunity to make decisions for themselves, and therefore a high level of persuasion and influence is required to try to get the best results for learners.
In my new job, with my team of advisers, I am currently seeking to ensure that as often as possible, we get the right solution. I do not think it is a silver bullet. I do not think at the end of it we will have the perfect set of colleges across England, but I do think we will be in a significantly better place than we were when the process started only just over a year ago.
David Hughes: The Government have a choice. In Wales and Scotland, the Government decided to impose structural change, and in England they did not. There are pros and cons with both. We have to remember that we have had for the past 25 years in post-16 a managed market and a managed competition. It is probably fair to say that in the past four or five years, the management bit of that has been getting smaller and smaller, so we do have competition post-16. We recently challenged a decision by a regional schools commissioner to open a new sixth form in east London, because we think that sometimes competition really goes against the interests of young people in terms of quality and breadth of curriculum.
As Richard says, the area review process has been variable across the country. In some areas, it has helped enormously to move things forward quickly; in other areas, it has been more difficult and more awkward. We have got to think about the 2,100 school sixth forms, over half of which recruit fewer than 100 learners into year 12. The Government’s guidance suggests that you need at least 200 to make it both financially and educationally viable. In our autumn statement submission, we have asked, and we keep saying again and again, that if it is right for area reviews to happen for colleges with the rigour that Richard talked about and with really detailed five-year financial plans, why not do that with school sixth forms?
We have hundreds of thousands of young people learning in very small school sixth forms; you can make that work, but it is really difficult to get the breadth and quality right. We would really like to see that same rigour applied to school sixth forms. We know that some local authorities are starting to do that themselves, and it would be great to see Government supporting that and getting a framework for it across the country. You do not have to do it all at the same time but it would be nice to see that rolled through, in the interests of young people in terms of the quality and offer that they get.
Bill Watkin: I should just reiterate the difference between sixth-form colleges and school sixth forms, because they are not the same thing at all. I entirely agree with what David was just saying. To give an example, a sixth-form college straddles—usually successfully but sometimes slightly awkwardly and uncomfortably—two sectors: the FE sector and the schools sector. A sixth-form college offers a school-type curriculum, but it does so with economies of scale. For example, I recently visited a college that has 1,000 students studying maths A-level, and another where there are 400 students studying psychology A-level. These are not the small school sixth forms that David was just talking about; they are large colleges that are incorporated and therefore usually included in considerations about the FE sector. They were also included in the area review process, and there are those who say that it was not entirely helpful not to include school sixth forms while including sixth-form colleges—that did not necessarily make a great deal of sense.
The other consequence of straddling those two sectors is the relevance of the Bill to sixth-form colleges. Much of what is in the Bill will have only a very limited impact on a small number of colleges, and most of them will not be hugely touched by it. There are two areas of particular interest to sixth-form colleges: one is the insolvency regime and the impact on their finances, and the second is the applied general qualifications, which are enormously important to sixth-form colleges. Applied A-levels, BTECs and applied general qualifications are an enormously important part of a blended curriculum offered to students in sixth-form colleges as a pathway to high-end destinations such as universities; two students recently got into biomedical degrees at Russell Group universities with entirely BTEC provision. That is the sort of curriculum that sixth-form colleges offer.
Mike Kane
Q Richard, may I just challenge you a bit further? Say you have two successful FE institutions and the recommendation from the area review is to merge—this scenario is not a million miles away from what is going on—but they say, “No, we are independent institutions. Forget it.” We know that they can stand alone, but the review said that they should come together. What is the stick? What is the incentive? How do you get from the world as it is, to the world as you want it to be?
Richard Atkins: I have two points. If they were both very successful and could produce the sorts of data that David referred to, they would probably be stand-alone anyway. If they could produce five-year data that showed that they would be financially sustainable and would continue to be very successful, they would probably opt for stand-alone and we would probably support that. We have got one or two cases like that.
If they cannot produce those data and we and the steering group think that merger is the best solution—this is possible, and we are doing it in at least one or two cases at the moment—we will put that recommendation in the report. The college can still opt independently not to do it. That means it will never be able to access the restructuring fund; if something went wrong in future, it would not get access to the large restructuring fund that is currently available. Of course, it would be subject to the new insolvency regime if this legislation goes through, so the world looks quite a lot tougher for it post-2018 if it chooses to ignore the evidence-based work that my team will have done and will have shared with the local steering group.
It is possible to bury your head and say, “We don’t accept the evidence that you are putting in front of us. We can’t produce robust plans for the next five years, but we are going to go it alone anyway. We won’t co-operate with anyone.” By doing that, those governors would be taking a big risk—a risk for their learners as well as for themselves. Let us say that the insolvency legislation goes through. I am generally supportive of that legislation in this role, and as a principal—as you probably know, I stepped down from being a principal earlier this year, after 21 years—I would have been supportive of it. You are taking quite a risk if you are prepared to confound the recommendation that we would make, along with the other members of the steering group. But you are right to say that ultimately these colleges are independent, and as a long-serving principal, I got the highest level of job satisfaction when my college enjoyed a degree of independence.
David Hughes: We need to be a bit careful on this. I remember twice being asked by Ministers when I was in the civil service to try to show the evidence that large colleges were more effective—well, once with Bill Rammell and then with John Hayes to show that small colleges were more effective. There is no evidence of size making that much difference. Leadership makes the difference, and context is king. The competition that I talked about can undermine the best led college, but leadership is the key thing.
When the area review comes through with a recommendation for merger, the right thing for the colleges to do is to go through a due diligence process to examine the proposal further. In some circumstances, it is very correct that they make the decision not to go through with it, because they have to have at their heart the interests of their institution, their learners and their community. The area review will not always get that recommendation right. We have to have a degree of realism: the colleges are independent institutions, making their own decisions, and sometimes not to go forward with that recommendation might be the right thing.
Ian Pretty: The area-based reviews, as a general process, struck me as reasonable. Where it has become more challenging is that the key objectives were that you wanted fewer, larger, financially sustainable colleges; that was the premise on which the ABR process was set up. As I said earlier, the key thing for me is the extent to which you have looked at things such as the skills plan and the pathways first, putting in place things such as the insolvency regime, and then perhaps the ABR process would have been an easier process for many.
I think that it is absolutely right that further education colleges are allowed to be independent and remain independent. I recognise that that creates frictions in terms of their not necessarily agreeing to things, but that was how they were set up back in 1992. The risk with all this, in terms of the ABR and the current lack of an insolvency regime, is that I do not think you have the flexibility to be able actually to create the merged institutions that you might or might not want. I have a personal view that a solvent college merged with an insolvent college is not a solvent college; that causes problems afterwards.
Speaking as an organisation, I know that the association has representatives in Scotland, Wales and Northern Ireland—we have five colleges altogether there—and I think there is a lot that the Department for Education and Government can learn from the experience, particularly in Scotland, which did bang them together to create regional colleges. They could look at the successes and the failures. There are strong successes there, and there are colleges where the merger has not been so successful.
Gordon Marsden
Q I would like to continue on the theme of the implications of the area reviews and to come back to you, Richard, if I may. As you have already said, you have had a distinguished career as a college principal and have held leadership positions in the Association of Colleges, so at least for the moment, until you are covered in the bureaucracies, you can see from both angles. I want to ask you about the implications of 88 colleges moving towards merger. Sir Francis Drake famously said that
“it is not the beginning, but the continuing of the same, until it be thoroughly finished, which yields the true glory”.
Although, the question here is whether there will be glory or lots of pain along the way. I want to press you on two particular points.
The context of this, as Ian Pretty has alluded to, is two things: first, the critical National Audit Office report, which really bashed the former Department for Business, Innovation and Skills right around the head over some areas and set off alarm bells about financial stability—I am sure that played a major part in the insolvency regime set out in the Bill—and secondly, on a year-on-year basis, when we exclude apprenticeship funding, the trajectory of funding for FE colleges from Government has been going down.
The situation is febrile and, in some cases, is producing that number of mergers. Once they are merged, there are then of course the consequences for the staff and students. For example, when two colleges merge in a suburban or rural setting, the implications for them being able to maintain their courses, which are after all the viability of those colleges, will be significant if issues such as travel do not come into it. I see nothing in the Bill at the moment—and little has been said by Ministers—about where the funding to support that process will come from.
My second point picks up on what my colleague Mike Kane said earlier about his experiences with Greater Manchester—I am a native Mancunian by birth, so I understand the area’s issues well, and the cohesion that already exists, and lots of other areas will not have that cohesion. We are going through a period of significant devolution from Government of responsibilities and funding—for what it is worth, I am wholeheartedly in favour of that—and skills and FE will be affected. We have a situation in which things are beginning to be set in stone in combined authorities or mayoralties that are likely to have significant powers in the next couple of years, but they might well come along and say, “Actually, this didn’t include us. We want to unpick it.” What do you have to say to that?
Richard Atkins: May I take the first question first? Thanks for setting it in context. If I may do the same, you are right that I had a long career as a principal, and when I started there were 469 FE and sixth-form colleges; there are 321 today. Some of those mergers have been very successful, but not all. But just as in business and other walks of life, some mergers do succeed. For example, takeovers are often more successful than mergers, but some have been very successful. I remember when towns such as Derby had two or three colleges, but now they have one strong college. So I think that in a number of cases the mergers we are proposing through area reviews may well strengthen college provision in that part of the country, but I do not for one minute think that every one of them will work out as if a magic wand has made it all brilliant and successful immediately.
There is continuing work for me and my team as the agency calls us in to support the implementation of the area reviews, to work out where things are going in the right direction or how to get them back on track, or to come up with alternatives, if necessary, to keep the process going. I do not think that it will be a cliff edge as such. I am talking to colleges a lot about the fact that it is not a cliff edge. I do not see 31 March and the end of the area review steering groups as an absolute cliff edge.
Gordon Marsden
Q That is a fair point, but may I press you a bit further? I am not necessarily saying that all these mergers will be a disaster; what I am saying is that they will be challenging—I gave you two particular examples—and what I wonder is whether you think the Government have given this enough attention, in terms of contingency funding or, for example, support for travel for students who might be affected. Or do you think it is part of your job and that of your fellow commissioners, when you are deliberating on these things, to send a stronger message to Government on these matters?
Richard Atkins: There are two points. Mergers do not necessarily mean the closure of sites, so they do not mean the end of provision for students locally. Clearly, in rural areas, for example, the history of the sector has been that provision has not gone even when there have been mergers. When Truro and Penwith came together, that did not end provision in Penzance. In fact, it regenerated the provision in Penzance to a higher standard. You can see that across the country.
Certainly, in any recommendations for area review that I am involved in—I have said this a lot—the interests of the learners would be paramount in my mind. I know that finance is one of the factors driving this. I do not disagree with you about the fact that there are pressures on colleges. Non-apprenticeship funding has been challenging. The cuts that colleges have faced in terms of the adult skills budget have been as big as any across education, and of course we have had a demographic downturn in 16-year-olds that goes on for another five years, and more competition. So colleges are under real pressure.
However, when I go out and intervene—the second part of my role, as you know, is intervening in colleges that have had either an inadequate Ofsted assessment or serious financial concerns—I actually find that what is missing are some of the basics of governance, leadership and financial management. I do not always find that it is a lack of funds.
I would like to see more investment in the sector. As a long-standing principal, I spent a long time arguing for that. I hope that in the future we will see greater investment in technical education, but when I go out to look at some of the most acute cases, what I find is—you will see this from my predecessor’s reports as well and the lessons I share with the sector—lack of a costed curriculum plan, staffing costs well above average compared with turnover and so on.
Part of my job is to share that practice, both good and bad, with all the colleges so that people can keep on track. I do think that is part of my job. It is also part of my job to represent the interests of learners. I hope the insolvency legislation proposed in the Bill does not have to be used, but if it did, I hope that the administrator would call in our team. I hope that we would act in the interests of those learners to ensure that the right solution was found with the institution and, most importantly, the right solution was found for the learners.
I do not think that merger necessarily means rationalising the number of sites; it may do in an urban area. My first college, I seem to remember, reduced from 11 sites to two. In a reasonably small town there was plenty of room for rationalisation. The idea that you close provision down in a particular district, borough or town is not something I would be in favour of at all. I would be looking for merger solutions that bring together back-room services, avoid duplication and so on.
Equally, particularly at levels 1 and 2, I would ensure that provision continues to be delivered locally where those learners can best access it. I do not see merger as necessarily meaning a rationalisation of locality and sites, particularly at levels 1 and 2. When you get to level 3, just look at the distances that students travel to Bill Watkin’s sixth-form colleges around the country. If you go to levels 4 and 5, which I hope we are going to see more of, I find that learners are very happy to travel considerable distances for the right provision. I do not see mergers as necessarily wiping out, but I do see my role as representing the best interests of the learners, and I hope that is what I have brought with me from being a principal all those years.
I would love to see more investment in the sector, but that is not what I find when I go out and do interventions at the moment—I have done several already. I am not walking into the problems being caused simply by underfunding; I am walking into areas where there is room for considerable improvement in governance, leadership, management and financial management.
Gordon Marsden
Q But you will be aware, with the eagerness of people to travel distances, as you say, that they might be eager but, if they do not have the money to travel, they will not be able to.
Richard Atkins: Sure. Coming from a county such as Devon, I am acutely aware of that: there are the lowest take-home wages in the country in place such as Torridge and west Devon. I am very aware of the travel. That is why I say that provision at levels 1 and 2, in particular, needs to be as local as you can get it to the learners, whether in an urban or rural area. I agree.
Gordon Marsden
Q Indeed. We will keep a close eye on that.
Finally, I will come to Ian. We have been talking about insolvency provisions. You have experience in other areas that may be useful for taking an overview here. Let me say straightaway that I very much welcome the new provisions, but there seems to be a tension, which no doubt we will explore in our line-by-line scrutiny, between the role of the administrator and the natural commercial demands and pressures that will come from the traditional insolvency process. Have you had any thoughts about that? I am mindful that we do not want to paint a picture of the whole area being ripe for insolvency—David, you made that point to me not that long ago. Nevertheless, we must plan for the worst. Are you confident at the moment, notwithstanding welcoming the new provisions, that the balance is right regarding securing the interests of the staff and the pupils at the college that might be in trouble alongside those of the people who are the traditional creditors?
Ian Pretty: Broadly, yes. That is the slightly negative answer. It is right that we very much welcome the insolvency regime. I think that part of it has been adjusted. One of the concerns we had initially was with things such as winding-up orders. It looked like anyone from anywhere could issue a winding-up order on a college, which would have created some real dangers, particularly to the learners, in that they would suddenly have had nowhere to study, and to the employees, who would have had no jobs. I see that the proposed legislation has made adjustments to that, which is welcome.
On the role of the education administrator, it looks like a fairly standard role that you would see in any winding-up or any receivership or administration in the private sector. The biggest concern I have at the moment is about governance and liability in terms of disqualification under the Company Directors Disqualification Act 1986. I still have real concerns, as do our members, particularly as we are colleges that are very commercially minded, that, depending on how that is interpreted and perhaps put into secondary legislation, you might be at risk of ending up in a situation in which you deter private sector people from being on boards of governors.
You might also deter politicians and people from the third sector—from charitable trusts—from being on boards of governors. It is absolutely essential that the sector has that insight and know-how brought in to help it through the processes. If there is a risk of someone being told that they will be disqualified as a director, you can imagine that that is quite material in the private sector. That is the area we are most concerned about at the moment. On executive functions, on people like principals being disqualified, we have no problem with that.
On creditors and bankers—I know that you will be speaking to the banks this afternoon and I am sure that they will be able to tell you whether they are supportive of the provisions—
Gordon Marsden
I will not ask you about your experience with the banks.
Ian Pretty: Don’t ask! There are sections of the proposed legislation that talk about indemnities and guarantees given by the national authority, be it the UK Government or the Welsh Government. Again, that is fine. I am sure it must be giving some comfort to the creditors, but the risk, of course, is that the Government become the guarantor of last resort. It is noticeable that other sections of the legislation refer to the college that is in administration having to re-fund. It depends on the sums of money that are involved, but if you do that you run the risk of never getting out of the insolvency cycle.
Kelvin Hopkins
Q Two issues have been raised in the past few minutes. One is mergers, and I think that David Hughes suggested that there could be a case for not enormous colleges staying as independent colleges; some might merge, but each could be judged on its own merits. But that should not be elided with the issue of sixth-form colleges doing A-levels and the contrast with small school sixth forms. I should say that I am a 25-year governor of a sixth-form college, a former teacher in further education and the chair of the all-party group on sixth-form colleges. The statistics produced by the Sixth-Form Colleges Association overwhelmingly show that sixth-form colleges do better in educational achievements and in value for money, and the Government would do well to persuade schools, local authorities or whoever to pool their sixth forms and create many more sixth-form colleges. That would be enormously advantageous to the country, to education and to young people.
The other issue is governance, which Ian Pretty talked about. I agree strongly that we ought to have breadth in our governing bodies. I have to say that the governing body of which I am a member has invariably had at least two members qualified in accountancy and at least two with legal qualifications, as well as members from the education sector, including primary and secondary schools, and from local businesses. It is small, tightly knit, monocultural governing bodies—perhaps drawn only from small local businesses—that tend to get out of control and that do not do too well. There was one glaring example of that in my constituency—I will not mention its name, but many of you will know about it. It got into a disastrous state, although it has now been picked up by a superb new principal. That breadth of governance, with all sorts of skills as well as commitments, is crucial. I wonder whether you accept that that is a sensible way of doing things.
Richard Atkins: Shall I begin? First, on interventions and area reviews, the quality of governance is critical to the success of the college—more critical than many governors realise. I see that when I go into colleges that are not doing well. Getting the sort of governing body that you describe, with a broad base of skills and knowledge, is essential. I pay tribute to the chairs and to the role they play in the area review. They are giving up a huge amount of time and showing enormous commitment to their colleges by coming to all the steering group meetings and taking part in this. Governance is critical to the quality of colleges. I agree with David that the size of a college is not the key determinant; we have some successful big colleges, but we also have some very successful small, niche colleges. Logically, you would think “How do they survive?” but actually they are doing very well.
Another point that I did not make earlier is that, although area reviews are leading to these 88 mergers—I am thinking about the area review that we are about to start in your constituency; I was talking to the two principals last week—in some areas we are simply generating collaboration short of a merger at a level that we have not seen for a long time. I happen to know that those colleges in your area have already been to see me to talk about a new form of collaboration. If that is the best solution for that area, and the data underpin that, we will support it. Merger is not the single blind answer in every case; collaboration short of a merger may well be the best solution in certain cases.
David Hughes: I want to assert that governance in the FE sector is very strong. I know that the Minister is very interested in helping to improve it, but we have a sector with very strong governance. These are independent organisations taking big business decisions over the long term, and in the vast majority of cases they deliver a very high-quality service and achieve a surplus. For many years, in the Learning and Skills Council and the Skills Funding Agency, I did a job that was not dissimilar to the FE commissioner’s: overseeing all the colleges that were getting into difficulties. It is quite striking that, despite all the funding cuts and all the competition, there are still only 20 colleges in financial difficulties. That is a very familiar number; it was not dissimilar through the noughties and into this decade. Despite all those challenges, FE and sixth-form colleges have proved incredibly adaptable and have responded really well to the funding environment.
Let me just go back to the fact that higher education is generating a surplus of more than 4% every year. The Higher Education Funding Council for England thinks that that is a problem, because it is only 4%, but FE has had a deficit in the last two years. That is not a commentary on the lack of good leadership and governance, but on the competition and the funding levels. We need to address that; otherwise, we still will not have the technical and academic education we need for young people and adults in this country. These are really important issues. It is not easy, because the economy is not doing as well as anyone wants. We are looking to the autumn statement this week and perhaps the Budget in the spring. As Lord Sainsbury said this morning, how do you properly fund technical education in this country, possibly for the first time ever?
Bill Watkin: I will respond to your comments about the growth of sixth-form colleges in the context of the economies of scale they offer, the quality of qualifications, their outcomes and their support for young people. I would also add that, with the population shift, the number of 11 to 16-year-olds is growing.
There is an interesting example of a proposed merger between a sixth-form college and an academy chain. The school, which has a large sixth-form provision, is looking to shift all of its sixth form across to the sixth-form college, and then to build capacity for 11 to 16-year-olds to serve the community. That is an example of a successful outcome of an area review recommendation. There is also the opportunity for sixth-form colleges to roll out their successful brand and open up a free school 16-to-19 provision, as happened in Pontefract.
I am pleased that the Government are reviewing the approval process for small school sixth forms. We have been invited to contribute to that review. I sincerely hope that there will be a different way of considering applications to open up schools’ sixth forms.
Professor Alison Fuller: I certainly do not want to downplay the importance of governance and efficiency—we are talking about public money, after all—but I do not want us to lose sight of the issue of efficacy and quality, which we started the session off with. The initiatives in the Bill will potentially achieve a step change in quality if we get this right. We know how much this matters, because the population performs very poorly in the OECD’s programme for the international assessment of adult competencies survey—the adult skills survey, which is administered to 27-year-olds. The added value from 15 to 27 is very weak, in terms of the age range, when you compare us to countries that have strong upper secondary and strong vocational and technical systems. The legacy effects that we are suffering as a consequence of the current system and what happened historically are playing through into the economy, life chances and wellbeing more generally. The prize is huge, but so is the challenge. I am a little concerned that an over-emphasis on governance may deflect from the really difficult thing—the quality issue.
Ian Pretty: Can I build on the discussion on mergers, which I think is a healthy one? To me, the merger is the merger. It is very easy to say, “We are all going to merge together. It’s all going to be wonderful, and the world is going to be fantastic,” but if you look at the statistics across all sectors—commercial and public—only 25% of mergers ever achieve their objectives. Post-merger integration is the most difficult thing. Part of that is that you have to understand the logic of the merger—is it a logical merger or a “shotgun” merger?—because that can have an impact. The studies show that, when they are successful, it is because of culture and cultural fit. Within the FE sector, some colleges are more likely to be able to culturally fit with another than others.
Having been on the receiving end, when I was in government, of ministerial decisions to merge, I can attest to the fact that it is difficult. The merger between Inland Revenue and Customs and Excise was an interesting experience, to say the least—I promptly walked out the door and went to the private sector.
You have to look at the logic of the merger, and then there is the whole point about post-merger integration. We have talked about whether there is enough funding, and all that sort of stuff, but do you have the right leadership? Do you have the right cultural fit that will make the merger work? Does the merger have the right objectives?
The other thing that is worth looking at is that we see regional college groups merging, and we see alternative versions of collaboration. Devon recently announced the launch of the Devon Colleges Group. The colleges have not merged together; they are collaborating. That is quite significant. You will then see that some college groups are working very well as merged entities or as groups. Hull, for example, is a successful college that has HE sections and FE sections. Warwickshire has merged a large number of colleges together, but it has not got rid of the place. It can therefore maintain community.
Going back to one of my earlier points, it is worth looking at the experience of places like Scotland. North East Scotland College has been a highly successful regional college group around Aberdeen and Aberdeenshire, and it has campuses that are 40 miles apart and still work—it still succeeds. It is worth looking at those models, but it is about the objectives of the merger. There must be a clear post-merger integration plan, because that is where you are going to get more success, rather than just saying, “We need to knock this together to get a smaller number of colleges.”
Justin Tomlinson
Q Building on Ian’s comments about the mergers, we had a similar discussion this week in the centre of the universe that is Swindon, where New College and Swindon College are considering whether to merge formally, whether to collaborate further or whether to continue with the status quo. Ian highlights that the success rate is only some 25%, and it comes down to leadership. What more can be done to engage with local employers? They could provide expertise and leadership in the next wave of governors—colleges are all chronically short of that—thereby improving the culture. Crucially, that could lead to opportunities for the students later on, because too often employers are not being engaged. What more can be done?
The Chair
May I ask for short answers?
Ian Pretty: The quick answer is that college principals ought to be working with local businesses to understand whether their post-merger integration plan is really viable and will work. My other point goes back to the concern I raised about one of the clauses in the Bill—that governors run the risk of being disqualified if the college is made insolvent. You have to look at those sorts of things. You have to look much more closely at how businesses want to interact with FE colleges and how colleges can learn from business.
David Hughes: Richard mentioned Derby College, and I was involved in the three-way merger 15 years ago. What we did, and the lessons are pertinent today, is that we created clarity for employers about where to go. In places like Swindon there is a lot of good sense in having one college so that employers can say, “There is one place for us to go.” I would not underestimate the big difference that simplicity can make.
It is obviously a lot more than that. It is also about having staff in the college who will go out and be credible with employers. It is perhaps about picking out the level 4 and 5 specialisms on which the college needs to focus, bringing employers together around those specialisms and allowing them proper agency to influence what gets delivered—making sure that they are contributing to the curriculum, offering work experience and work placements, and so on. It is about properly engaging for the long term, rather than just the short term. It can be done. Again, it requires really good leadership and governance within the college, and it requires employers to step up to the plate and meet halfway. Co-creation is what you want. You want for both sides to feel that they are contributing to something.
Justin Tomlinson
Q What is done to share that best practice?
David Hughes: The AOC works quite hard to share that practice. We have a governors’ council, and we share that practice with governors, principals and senior leaders. We work across the piece. We also support the Education and Training Foundation.
Richard Atkins: I am just going to come back with two or three things. First, the Swindon issue, as you will know, is a live issue. I am chairing the Gloucestershire, Swindon and Wiltshire area review at the moment—
Justin Tomlinson
I will be writing to you soon.
Richard Atkins: That is a live issue. Secondly, the relationship between a principal and their governing body is interesting. I always felt that one of the key elements was to work with my chair and clerk to recruit governors. That was a non-stop piece of work. When you are out and about in your town or community with employers, you are all the time thinking about people who might in the future make a governor. If you get it right, you will end up with a waiting list, and there are colleges with waiting lists. If you do not do that engagement and do not keep on top of it all the time, you will end up going around saying, “No one wants to be a governor.” For me, it is a key element of the principal’s job to work very closely with the chair and clerk to identify potential recruits who can then obviously go before a search committee and all the rest. I hope that the area review for your area, and particularly for the town of Swindon, is able to come to the right collective answer.
The Chair
Bill Watkin, if you can be short, I would be grateful, because Tracy Brabin wants to come in with a question.
Bill Watkin: Yes. I would like to draw together the strands of merger due diligence and the insolvency regime. The insolvency regime has an impact before insolvency is even a reality. Since the publication of the insolvency regime, banks and pension fund managers have been responding differently to colleges. A group of colleges in the south-east, for example, immediately after the publication of the insolvency regime—which I should say colleges welcome—were upgraded to a maximum risk rating in terms of their pension contributions, which of course means that they are able to divert less money to teaching and learning and have to negotiate less favourable repayment terms. It is the same thing with bank loans. Banks and pension fund managers are all being more cautious because of the insolvency regime, and that is having an immediate impact.
Tracy Brabin
Q Thank you for squeezing me in very quickly at the end, Mr Bailey. I would like to pick up on something that was said earlier. You said there is no cliff edge when it comes to insolvency. If students are already on the course, how swiftly will they be moved to better provision so the lights are not turned off and there is not asset stripping around them? How much transparency will there be for prospective students if a college is under review and about to be declared insolvent?
Richard Atkins: I will start, because I would be likely to be involved—or my team would. I really hope that this legislation is not used, but it is very important to have it in the cupboard. I agree with Bill. Most principals welcome this. There is a lack of clarity in the 1992 legislation, which has led to some colleges getting exceptional funding on a long-term basis, which is not awfully good for neighbouring colleges or the sector and stops people getting their house in order. Generally speaking, people welcome this but hope it will never be used, and that is my position.
If it were ever used, there is a special administration regime, and the Secretary of State can declare that within 14 days and step in. The administrator, who would be commercially appointed, would almost certainly turn to me and my team to do just what you have said. My primary interest would be the welfare of the students. First, we would want teaching and learning to continue in that place, and we would certainly want students to complete their courses. Secondly, we would want to find the best institutional solution for that organisation, which would not necessarily be shutting it down and moving all the students. There is a range of options—a merger is one, but there are others.
I would like to think that this would be the absolute last resort and might never be used, but it might focus governors and principals very firmly on their financial responsibilities as well as their educational ones, and it might enable me and my team to intervene earlier. Earlier intervention is a key part of this to prevent things from getting to the position where, by the time we arrive, there have already been successive exceptional funding payments, which leads to an unhelpful culture of money just being paid out. David will remember from when he was involved in these sorts of rescues that if you get into a cycle of exceptional funding payments, that is not helpful. This draws a line. I hope it is a line that never needs to be crossed, and I and my team would always be there, working with the funding agency to look after the very best interests of the learners and not disrupt their programmes.
Ian Pretty: Clause 14 of the draft legislation sums it up well—in particular clause 14(2). What is quite critical to me—I am very supportive of it—is that it puts the loan at the heart of what is going to happen. That gives protections.
The Chair
Order. I am sorry to have to interrupt, but it is necessary for me to do so to conform to the programme motion. If you would like to submit in writing any further comments you might have made, I am sure that the Committee would be happy to consider them. I thank all the witnesses on behalf of the Committee. It has been a very comprehensive discussion.
Technical and Further Education Bill (Second sitting)
Tuesday 22nd November 2016
(8 years, 1 month ago)
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The Chair
Welcome, gentlemen. We will now hear oral evidence from Ernst & Young, Lloyds Banking Group, Santander and Barclays. For this session we have until 3 o’clock. Gentlemen, could you please introduce yourselves with your name and which company you are representing?
Richard Robinson: My name is Richard Robinson and I work for Barclays bank; I am the head of education at Barclays.
Gareth Jones: I am Gareth Jones; I am the national head of education for Santander.
Richard Meddelton: I am Richard Meddelton; I am the regional director responsible for education, charities and government for Lloyds bank.
Stephen Harris: I am Stephen Harris; I am an insolvency practitioner with Ernst & Young.
Gordon Marsden (Blackpool South) (Lab)
Q 41 Yes. Good afternoon, gentlemen; I see that it is all gentlemen, which might raise some interesting questions for the future. Obviously, you have been invited here this afternoon. We hope you have a generous overview of the further education sector, but you are principally here this afternoon as the lenders and, possibly, subsequently the enforcers—if I may put it that way. We are particularly interested in the parts of the Bill that have the details of the insolvency process.
Perhaps I could start by asking this genuinely open question to each of you in turn. We had some discussion on this insolvency regime this morning and its genesis may be disputed, or it may come from a number of areas, but undoubtedly one of those—I quoted this earlier—was the concerns expressed in the National Audit Office report in 2015 about the financial situation of a number of FE colleges. You will probably be familiar, in some shape or form, with that report, because I imagine it would have sat somewhere on your risk profiles. As I said this morning, I do not want to over-exaggerate that threat, because doing so would be very unfair to the FE sector. May I ask each of you to say briefly, from your own experience, whether the events of the past couple of years, including that NAO report and the inclusion in this Bill of a fairly detailed insolvency process with some novel features, have already sharpened—or are likely to—your willingness or otherwise to loan to colleges? Who would like to start on that?
Richard Robinson: I think it is fair to say that the deterioration in the financial performance of the sector over the past couple of years has led to a tightening of the terms of finance available to further education colleges.
Our experience to date has been that when colleges have got into financial difficulty, they have been helped out by one of the agencies—be that the Skills Funding Agency or the Education Funding Agency—that have provided exceptional funding support to help turn those colleges around and keep them going. I think we are going to allow colleges to become insolvent. From a creditor’s perspective, that is a worse position than the one we are in now, simply because, from our experience, we know what is going to happen. However, the proposed insolvency regime has been well thought through, and the points that we made through the consultation process have been well listened to. Our preference as a creditor is still that it is not introduced, but if it is, there are a number of things that will help creditors and most of those have been well reflected in the Bill.
Gareth Jones: I agree that, over the last couple of years, lending into the sector has become a little more difficult and challenging. Overall, from our perspective, we are still very supportive of the sector—still looking to grow our exposure to the sector and grow our lending book. On the Bill and the proposed insolvency regime, we are actually supportive of the clarity that they provide.
Gordon Marsden
Q Mr Meddleton from Lloyds—with whom I have been for 43 years, so I have an active interest in Lloyds—I am not going to ask you to divulge any commercially sensitive information but I think it is an open secret that you are rather a large lender to a rather large number of colleges. Is that correct?
Richard Meddelton: Yes, that is correct. We are a significant lender in the FE sector, as are a number of other banks around the table. We have supported the sector for many years.
Gordon Marsden
Q May I ask you something, then, on the basis of that long experience—almost as long as my time banking with you? Obviously, over that period, there have been high points and low points for the economy, and there have been changes in regime and Government responsibility. How would you characterise the current situation from your perspective —obviously being supportive, but at the end of the day having to be commercial lenders? How would you characterise the current situation in terms of risk for your bank, and what do you think the proposed insolvency regime does for that?
Richard Meddelton: In answer to your first question, the sector is going through a number of difficulties at the moment. My colleagues have highlighted the reasons, which I would agree with, on that. From our perspective, yes, it is a sector that certainly has a number of stresses within it at the present time. Notwithstanding that, as a major lender in the sector we remain extremely committed to it.
The Chair
Mr Meddleton, could you speak a bit louder please, so that we can hear you down here?
Richard Meddelton: I will try to. I don’t have the loudest of voices.
The Chair
Or get closer to the microphone. Thank you.
Richard Meddelton: We are, as a bank, extremely committed to the sector and we remain so. The SAR as it is proposed—if that is your second question—does give us some cause for concern, certainly in terms of continuing to lend on a long-term basis. If you look at the current area review and start going through, they are very welcome. I am not sure, going forward, that it is particularly easy for us to make a longer term lending decision based on the performance of the college as it stands now and in the short term.
Gordon Marsden
Q If I could just add to that, and for the benefit of the other witnesses, who I assume were not here this morning, we had a fairly full discussion as to what the economic impact of the area reviews would be. I think it is fair to say that the FE commissioner took a slightly rosier view than I did of where some of those mergers might end up. Of course, mergers in principle run along the lines of attempting to provide greater stability, but we heard from another member of the panel this morning that that was not always his experience. Obviously, you will have to take a measured view on that. The commissioner disclosed today—of course, the area review process is not complete—that some 88 colleges are likely to be involved in merger issues. Is that something that would be a material fact when you were going to your colleagues and talking to them about the spread of risk in the FE sector and your continued loans over the next one to two years?
Richard Meddelton: Could you clarify the question for me please?
Gordon Marsden
I am sorry. We heard this morning from the FE commissioner that there are up to 88 colleges that are potentially involved in the process of merger, from the area reviews. The implications of merger may be positive, as the FE commissioner was keen to emphasise, or negative, if they go wrong, and if the number of students declines and if there are all sorts of problems, which would include the potential for financial instability. I was asking you whether the area reviews, and the number that I have just given to you, would be a significantly material factor for you when you are presumably discussing with your colleagues the likely factors of risk for lending over the next two years.
Richard Meddelton: Certainly we understand the area review process and the reasons for it. I would say that we look at each one in detail. We certainly welcome the area review process. We think it is a positive step forward. As you rightly say, not all mergers necessarily work and work well, if you draw parallels with corporate life. Nevertheless, we see a lot more good than not in what is being proposed.
Gordon Marsden
Q Finally, I wonder if I could come to you, Mr Harris. You are set apart from your colleagues, but only set apart in the sense that you have been there, done that and bought several T-shirts, probably. That is why we are very pleased to have you here today, because you have been through situations where there has been a special administration regime.
You will have seen in the Bill that there are clauses that spell out the nature of what the special administration regime would be. I note your comments; I have read your comments on the Bill. You perfectly reasonably hedge your bets about the outcome. You have asked the most pertinent question that we probably all need to ask—a focus for the responsible authority creditors and the insolvency practitioner: who will foot the bill for the greater good? Perhaps the Minister will be forthcoming on that at some point in the future—I do not know. I want to ask you what you think, because we have this very technical clause about the way in which colleges can have more than one corporate identity and legal identity. Could you comment on the implications of the distribution of that, in the insolvency part of the Bill, on the way in which colleges are defined, whether as corporate entities or some other body?
Stephen Harris: May I just clarify the clause that you refer to?
Gordon Marsden
I am referring to clause 22 on the general functions of the education administrator, which draws a distinction
“where the further education body is a company”.
I am interested in the extent to which that would affect all FE colleges that found themselves in this situation, as opposed to a particular number.
Stephen Harris: Paragraph 22—
Gordon Marsden
It is clause 22, paragraph 43—
Stephen Harris: I am sorry to appear stupid, but I do not seem to be able to read off the same clause to which you refer. I am anxious that I do.
Gordon Marsden
My apologies—it is clause 22. I am looking at “General functions” of the administrator—subsection (3).
Gordon Marsden
It might also be helpful to refer you to the explanatory notes, which prompted my question. They state:
“The education administrator must also, so far as it is consistent with the special objective, carry out the functions in a way that achieves the best result for the body’s creditors as a whole…Where the further education body is a company, subsection (4) requires the education administrator to carry out their functions in a way that achieves the best result for the company’s creditors as a whole and, subject to that, the company’s members as a whole.”
I found that rather opaque and not clear in its implications.
The Chair
We are sending you down a copy of the explanatory notes as well.
Stephen Harris: Thank you. I do empathise with your observation that it may be opaque. I also had to put a question mark there when I read it for the first time. This is my take on the legislation as proposed, as is writ in the draft Bill: it is very clear—this is the way I have read it, but others may differ—that the overarching or transcendental purpose is to minimise the disruption and to carry on, within certain bounds. Then there are what seem to me to be some slightly subservient points. That is not to diminish them, but an office holder would have to step back and consider those people who fall into the category of subsection (3)—people with special needs—and how that dovetails into the way he is discharging his duties. Then you get to the issue of having to carry on in the interests of the creditors. I think there is a question when you read that: is that something that clicks into place when an office holder has optionality as to the route that he might take through the maze, or is that something he has to balance with the overarching purpose itself? If you say to me that it is not exactly clear on the face of the drafting, I have to concur with you; I stalled on the very same point myself.
Mr Ranil Jayawardena (North East Hampshire) (Con)
Q I refer Members to my entry in the Register of Members’ Financial Interests; I used to work for Lloyds Banking Group and spent time in corporate banking, dealing for a time with education, community and government customers. I will come to Lloyds in a moment, but first, Mr Jones, you said in your written evidence to the Committee that you think that this is a positive step and that lenders will have certainty. Can you explain the uncertainty that exists to you as a lender today?
Gareth Jones: From Santander’s perspective, the uncertainty has always been around the funding agencies and, when a college is struggling to make its payments, effectively where that interim funding will come from. There is also uncertainty about whether the current insolvency applies to college corporations at present. From a risk perspective, when we assess the underlying risk of a transaction, there has always been that uncertainty and we have had to make assumptions in the background. If the Bill is passed, the certainty it will provide is positive for us.
Mr Jayawardena
Q Despite what Mr Robinson said a moment ago about the challenges in the sector, if I understand what you said, Mr Jones, after you, as Santander, have done that analysis of the credit risk, you would like to lend more into the further education sector.
Gareth Jones: Yes.
Mr Jayawardena
Q Mr Meddelton, given what Mr Jones said, why do you say that this proposal presents banks with such significant challenges? Surely the certainty that Mr Jones just outlined is a good thing.
Richard Meddelton: Certainly to have a framework, as proposed, is a positive step. The issue for us is to do with the powers that the administration would have under a special administration regime. For example, if we were a secured creditor and the college went into an SAR, what could happen—I appreciate it is a “could”, and that it is untested—is that the administrator could run the college for what I think is an undefined period, unless I have misunderstood the drafting, and it could be at a loss, notwithstanding the fact that some very laudable principles are driving this.
As a lender, the ranking—again, it is unclear at the moment—may well sit behind a creditor. In addition, as we interpret it, even as a secured creditor the security could be transferred into a separate entity. Again, I understand the practical considerations for that, but at the same time the debt could be left in the old college, or it could be transferred. Again, there are “know you customer”—colloquially, we tend to call them KYC—considerations.
Mr Jayawardena
Q But you also said in your written submission that Lloyds traditionally viewed this as quasi-Government risk. That is your own internal credit rating of this sector, and that is based on your own judgment. Surely when it comes to determining whether, to use your words, there should be further long-term decisions and long-term lending in this sector, that would again be a matter of using your own credit rating and credit risk process. More certainty is provided under this proposal than you currently have. You said that you assume that that option would be for the failing college to be financed by Government funding, but there is no guarantee of that today, so surely you are better off.
Richard Meddelton: There is no guarantee of that today, but under the current system if we have security, we have priority. The reality is that we have viewed it as quasi-Government because in the past—obviously the past is no prediction of the future—that money has been forthcoming, as you know, having worked in Lloyds corporate yourself. If there were greater clarity about what would actually be done in a special administration regime, that would obviously give us some comfort.
Mr Jayawardena
Q One final point, if I may: Lloyds has set out that it wants to “help Britain prosper”. You have challenged the SAR regime, which could lead a college to be administered in a separate regime for a period of time. You would, I am sure, agree that it is right for students to be able to finish their studies and not face disruption, because that would not be to the values that you hold dear.
Richard Meddelton: Yes. I appreciate that it is a dichotomy, but yes.
Mr Jayawardena
Q Can I ask Mr Jones and Mr Robinson a yes/no question? Under the current system, you would not want to close down a college and sell off their assets even if you did have security today, because you would want to allow those students to continue their education. That is the right thing to do, is it not?
Richard Robinson: The interest of the learners has to come first.
Gareth Jones: I completely agree.
Richard Meddelton: We said in our response that we would see the interest of the lender as coming first.
Mr Jayawardena
Q So Lloyds Banking Group, today, would sell off a college site even if people were in the middle of their A-levels and needed to complete their courses.
Richard Meddelton: I think that is highly unlikely. The reality is that we would always work with the college, with the administrator. Our history has been that of a responsible lender, helping Britain to prosper, and that will continue, regardless of the site.
Mr Jayawardena
Q So ultimately all three of you are in agreement that a college today would continue in existence until you had unwound the whole of the financials behind it and had found a solution in the interest of the learners and that, in the future, the same would be true.
Richard Robinson: The difference is that at the moment we have experience of what happens when colleges get into difficulty. Our experience today is that we, as lenders, work with the agencies—the SFA and the EFA—to find a solution. The Government have put money into those situations. We are now saying that we will allow colleges to become insolvent, and that we will put an insolvency regime in place that rightly puts students first. We absolutely agree about that, but the difference is that we have no experience of what happens in that case. Therefore, we have to try to make lending decisions today that will apply in the future, when the regime is in place, and we do not know whether they will apply because the regime is not tried and tested.
Mr Jayawardena
Q Mr Harris, this question is for you, given your expertise. At the moment, the banks are saying they have no understanding of what would happen in the future but they do know what happens today. But what happens today is based on a bit of a guess, a bit of luck and a bit of Government funding coming in. Perhaps the situation will be clearer to banks in the future, but surely having this clear framework set out in law is a good thing?
Stephen Harris: I feel that very cogent points could be made in saying it is a good thing. In an insolvency environment that is unclear, because you start to add in a peppering of trusts and unusual organisations and things that are not necessarily the bread and butter of corporate insolvency, when colleges start to get into difficulty the legal bill starts to rise, as people have to seek clarity about how the matter will legally be dealt with. In the draft Bill, an element of clarity is brought to the sector as a whole, which in the long term people might appreciate. I cannot speak on behalf of the banks, but I can see that there is a lot of clarity in the Bill about what is a very specialised sector.
Kelvin Hopkins (Luton North) (Lab)
Q I will give a bit of background first. For 23 of the past 25 years I have been a governor of a sixth-form college and, before incorporation, I was chair of governors of a larger college of higher education, which was largely FE. In the sixth-form college we had internal expertise of the highest order. The previous experience was less good. I have said many times now that one of the important things for a governing body is for it to have accountancy expertise, with at least two independent qualified accountants and at least two independent legally qualified people. That makes a difference. In the college I am at now, the vice-principal in charge of finances is a chartered accountant and does a superb job.
Do you take an interest in the internal financial controls of colleges or do you just say, “Well, if they get into difficulty, we’ve got the security of the college assets and we’ll just take some of that”? Do you take an active interest or stipulate any kind of requirement about how finances are managed internally in the colleges?
Richard Robinson: Absolutely, yes. The quality of management and governance is one of the key criteria we look at when we are assessing the risk. We do not just lend the money and then disappear; this is a relationship for us. We go and see our college clients several times a year to talk about what is happening in their business and the challenges to the sector.
One thing we do is help management with their skill sets. For example, what has happened in the sector over the past couple of years, with the challenges it has faced, is new to a lot of managers. It has been quite difficult to manage through that process. We bring to bear the experience we have of dealing with lots of businesses to help them with that process.
We have often pointed out that maybe they do need some different experience on the board—people with different skill sets. I agree that there should be governors with a diverse set of experiences. That should definitely include accountants, as having people with financial literacy is very important.
Gareth Jones: Our approach is very much the same as Barclays, in the sense that the governance structure of the college, the key management team and our appraisals make us consider our overall lender proposal and whether we are willing to advance funds to that college. Fundamentally, it is the management who are in control of the college and their strength is strategically important to our lending decision.
Kelvin Hopkins
Q All that being said, I know of one college in recent times that came to the brink of disaster, until the principal was effectively chased out of town. It has now been picked up and restored but it was in a parlous situation with internal financial abuses—I can speak freely because we are private in Parliament; that is what was going on. Clearly someone was lending money to the college, presumably, but it was effectively out of control. Is that a concern to you, that such a thing can still happen?
Richard Robinson: We work very closely with the management teams and with the SFA and the EFA. If we were in a situation where we thought that the management was doing inappropriate things or had been run out of town—
Kelvin Hopkins
Q Even illegal things, I may say.
Richard Robinson: Even illegal. That is the sort of thing that would cause us quite a lot of concern. We have a close working relationship with the agencies and that is the sort of thing we would discuss with them. We do not have powers as a lender to remove people. We do have the ability to go and talk to governors, so if there were an issue with the principal, another of the things that we would do is speak to governors about that. We would also have conversations with the agencies. I do not know the college in question, but that does sound like an extreme position.
Kelvin Hopkins
Q Do you think Government ought to take much more of an active interest in what is going on in their colleges? Do you think an appropriate clause in the Bill might be helpful, to ensure that internal procedures are appropriate and disciplined?
Richard Robinson: Governors or Government?
Kelvin Hopkins
Q Both really: management and Government. Do you think there should be something specific in the Bill saying the sort of things I have said about having qualifications among governors and an inspection regime that works—as it did not in that case—to ensure that financial arrangements are not being abused?
Richard Robinson: I am not a governance expert, so I do not know if there is a clause that can be put in to help that. I do agree that the sector can always improve management and governance. No business can say it has perfect management and governance, so constant improvement in those is a good thing.
Richard Meddelton: I think the insertion of a clause in the Bill along the lines you have suggested would certainly help and be welcome, although, like the other Richard, I am no legal expert.
I would answer your first question in terms of how we look at the governance and management of a college. From a Lloyds banking perspective, we take a great deal of interest in the make-up of the management of the college. That would include the expertise of the board of governors. That is an ongoing practice in what we do. We have not got down to stipulating how many accountants or lawyers need to be there, but we would certainly look for a good mix, so that they are professionally managed and so that we have a fruitful long-term relationship over many years.
David Rutley (Macclesfield) (Con)
Q It is interesting to hear your views. It seems as if there is broad support, at least at the right end of the table, for the direction of travel here. One of the proposals in the legal framework is the role of education administrator, ensuring that the quality of educational provision is continued. Could each of the panel members describe whether they are comfortable with this role as being a helpful addition and whether it should be changed or enhanced in any way?
Richard Robinson: Obviously we know what a normal administrator does, in a normal administration situation with companies. We do not know what the education administrator is going to do, beyond what is written in here—the legal, written thing versus the practical reality. For us, the role seems to be broadly balanced between making sure that the interests of learners are put at the front, which is the right thing to do, and making sure that creditors are not forgotten. There are probably two other things that would certainly help, and both have been touched on by other people. The first is some clarity about who funds the administration—who funds the insolvent college during insolvency—because that could be for a number of years. It is very important for us to know that when making lending decisions. The second point is the legal position of secured creditors, which Richard has mentioned. Again, further clarity about that would be helpful. Other than that, I think it is pretty clear in the draft Bill.
Gareth Jones: From Santander’s perspective, overall we were supportive of the draft Bill and of that role as well.
Richard Meddelton: I have got nothing further to add.
Stephen Harris: If I can just clarify, your question was about the role of the insolvency office holder as an education administrator—
David Rutley
It is about whether the role would add anything.
Stephen Harris: From an insolvency practitioner’s perspective, it is worth standing back and recognising that insolvency practitioners are not train drivers, or people who spend their life in the railway or the London Underground, when it comes to a special administration regime, nor are they specialist property developers. They come to each situation afresh. One comforting thing that insolvency practitioners bring is recognising when they need to keep in place the existing management structure in a corporate sense, or the workforce in a pastoral sense, recognising that those people have skills and qualifications that they as an office holder do not necessarily have, and also recognising that they can bring outside specialist help to continuing the duties of education administrator, should the need arise. That is all part and parcel of any trading insolvency regime, and I would imagine that any office holder stepping into the role of an education administrator would have that at the forefront of their mind. I do not think it presents a unique challenge; it is very similar to all the other special administration roles. There is an extra dynamic—there is a pastoral element.
Tracy Brabin (Batley and Spen) (Lab)
Q Thank you for your candour in your response to the Bill. What are the implications for the future willingness of creditors, given the reluctance you have mentioned of lenders such as yourselves to lend now to colleges? There is a lot of excitement around this Bill because there is an opportunity for money from big business to provide apprentice opportunities. Will that be held back by a reluctance from banks and so on to lend to this community?
Richard Robinson: For the moment, for most creditors, the status quo is the preferred position just because of our experience of what happens when things go wrong. That said, I think the Bill has been carefully considered and, apart from the two points I made before, I do not think this is a sector where you are going to see lenders just disappear altogether. But it is going to be harder to support in the same way that we used to. Banks used to be able to lend for a very long period of time—30 years on an unsecured basis—but that will change. I do not think that it will result in colleges not being able to get funding at all, but the terms and conditions will probably be different from what they were in the past.
Tracy Brabin
Q So you are suggesting that it will be more expensive to borrow?
Richard Robinson: Not necessarily more expensive; it could just be that the loans have to be shorter or have to be secured versus unsecured. Cost is just one element of the terms and conditions of a piece of finance.
Gordon Marsden
Q I just want to return to the issue of cost-benefit analysis, in terms of the increased risk that will come about. Given the factors that have led to this insolvency provision having to go into the Bill, it is obvious that the Government recognise that there are increased risks in the future. That is not necessarily to say that the whole edifice is going to collapse, but it does mean that you as banks have to make difficult decisions about how you calibrate that risk.
I was struck again, going through the Bill, that there is a creative tension—hopefully it is creative and not destructive—between the needs of the education administrator and the traditional needs of the creditors. I was struck particularly by a phrase in your submission, Mr Harris, where you said, “I note also that the Bill contains measures such that a creditor or appropriate national authority may apply to court if it is dissatisfied with the conduct of an education administrator.” No one is suggesting that the majority of colleges are going to go through the procedure, but if a college was going through that procedure and the sums of money were quite large, it would not necessarily be surprising if a creditor did challenge the education administrator in that fashion.
My question is twofold. First, Mr Harris, you have already expressed the big question: where is the money going to come from? Would that presumably increase the likely legal costs to which you referred in such a way that it could make it a very expensive process? Secondly, and this is for you three gentlemen generally, it seems to me that what is coming out of this afternoon’s session is that you would welcome greater clarity, whether in guidance notes or even a new clause, although Governments are reluctant to put some details into new clauses, to understand what the Government are prepared to take on board—after all, it is the Government who are introducing the proposal—and how much security, whether quantified as a financial amount or as a supporter of last resort, you would require from the Government.
Stephen Harris: May I just stand back and piggyback on your first question? I have actually been asking myself, since you asked me the question, how I got comfortable with this last Thursday afternoon. Clearly, I was; there was a holistic package of measures here, which I felt broadly work. I would like to return very briefly to the issue of clause 22 for a moment. In subsections (4) and (5) we see the crucial words placed between commas,
“so far as is consistent”
with the overarching duty. Having stalled on it on the first read, when I went back and saw those words it became reasonably clear to me that the transcendental purpose—the carrying on for the education—is the thing that matters.
We therefore turn to the question of funding. We come full square to clause 25 and the suite of options set out in it:
“Grants and loans where education administration order is made.”
Then we travel further into the draft legislation—indeed quite a long way to the back. This is a bit of a technical area, but it is worth focusing on for a minute. The administrator will receive grant money from the funding body, and he will spend it on wages, salaries and the upkeep of the college. The fundamental question is: where is the deficit funding going to come from? Of course, he will have to borrow. Borrowing money in an insolvency process carries some technicalities. The overarching technicality is: where is the repayment of the loan going to rank? In conventional, vanilla administration, it is generally accepted that if the administrator borrows during an insolvency process, his obligation to repay the bank or the funder carries a very high priority unless it is agreed with the bank that it will be demoted for one reason or another. We need not explore that here.
In the suite of options that are available here, there is a technical clause that enables the lending authority to position the option for the repayment of the loan. Broadly—if I may put it this way—it can come at the front of the queue, the middle of the queue or the back of the queue. When I say the queue, I mean that if you take the general body of creditors as a whole, the repayment of the loan for the deficit funding can rank ahead of those creditors, alongside them or behind them.
Turning to your question, I think that what we see here is a recognition that one size might not necessarily fit all. There is probably a sense that it is not wise to be prescriptive at a total level, so having a suite of options that can be adjusted to specific circumstances may be an appropriate balance at the moment. There will be tension when it comes to borrowing the money, and I have little doubt that the funding authority will set out its stall on which it is prepared to make the money available.
Gordon Marsden
Q Just to clarify, when you say the funding authority, are you talking about the Skills Funding Agency, the Government or some mixture?
Stephen Harris: I think the words used in the Bill are “the appropriate national authority”. An incoming office holder is going to be faced with something that ranks at the front of the queue, in the middle of the queue or behind the queue.
Gordon Marsden
Q No disrespect—I think your analysis is elegant and understandable—but that is not going to make the decisions of the three gentlemen sitting beside you any easier, is it?
The Chair
I have to hurry you, Mr Harris. We have another panel of witnesses and a question to go yet.
Stephen Harris: I cannot answer for my respected colleagues from the banks. It is an environment in which people generally try to work together to do good things for the community as a whole. We are looking here at a minority of situations—I hope it is a minority—where there will be tensions. Ultimately, lenders, taxpayers and the appropriate national authorities are all in the same country together, but I do not speak on behalf of the banks.
Richard Robinson: I think your question was about what we would like to see. All the various options that are in here are helpful; it is one of the strongest parts of the Bill. Mr Harris is right that we, as a lender, would want to work with the college and the authorities in that situation to find the most appropriate path. The issue is that it does not specify where that ranking lies. That, for us, is very important. Although it could rank at the back, it could also rank ahead of us. Obviously, being bankers, we have got to think about the worst-case scenario, and the worst-case scenario is that it is ahead of us. We are making lending decisions today for a long time in the future, and therefore we need to work on the assumption that the worst-case scenario will come to fruition.
The other point was about security. Security is important to us to ensure that we know what our rights are as a secured creditor. If the loan and the security are going to be transferred to another provider, having that option is really helpful. We would want to explore ensuring that it was in the best interests of everybody that we did that. We would also want to ensure that it was not transferred to someone we were less comfortable with. So having that legal certainty about our rights at the outset is very important to us.
Stephen Harris: I can possibly add a little more colour to this question. I was mulling this over and trying to identify in my own mind a situation in which, for totally understandable reasons, somebody might say, “I really, really want to be at the front of this queue,” in a particular situation. In some organisations you really do not know what all the liabilities are when you first approach a situation. Sometimes, when you have travelled a little way on your journey through the insolvency, you discover that there are some very unusual liabilities, which you had not really bargained for, attached to a certain site or situation.
I have some empathy with the idea that, in structuring a funding loan for an administrator early on, and not having total visibility over the level of liabilities that might rank in a particular situation, somebody might want to proceed with caution initially and perhaps take a view on things when the assignment has progressed. At moment zero you do not always know who your liabilities and your contingent creditors are. I do not know whether that is helpful context for these clauses.
Kelvin Hopkins
Q You are talking about lending to bodies that are in theory independent incorporated bodies but are actually largely funded by Government. Sixth-form colleges are funded entirely by the Government. That must make you feel a little more comfortable; the Government do not want these colleges to go under, so your money is relatively safer than if you were investing in a burger bar—if that went under, the nation’s health might actually improve and you would just take the assets and sell them off or whatever. How much are your lending policies influenced by the fact that these are quasi-public bodies?
Richard Robinson: It is an important factor. The income they receive comes from the Government and they are doing something that is of strategic importance to UK plc, and all of those are factors. We need to put this in context. Although it is harder for us to support them in the way we used to, that does not mean that we are not supporting them or that they cannot get money; it is just on different terms from how they used to get it in the past. The relative position is an important one and it is well recognised by us, as I am sure it is by Lloyds and Santander. That relationship with Government is one of the key strengths, and that does bear out in our risk analysis of the sector.
Richard Meddelton: I would echo the fact that they are, as you put it, quasi-Government bodies. We do take great comfort from that, as is obviously evidenced by the fact that we are a major lender in the sector.
Kelvin Hopkins
Q This is a bit of a mischievous supplementary question: does that mean you are less concerned about how the college behaves internally, in terms of its funding and spending, compared with a private body that might go under, where you would lose all your money?
Richard Meddelton: That is a fair question. Obviously I can speak only for my own bank on that. The answer is no, we are not less concerned. The reality is that we are lending very much on a relationship banking perspective. We are looking for longevity; we are not looking for any funding out from that. We certainly carry out the same rigorous credit and risk assessment and ongoing assessment as we would for a corporate.
Gareth Jones: The level of due diligence we apply for a further education college is exactly the same as the level we would apply to the burger bar—to return to your reference. Further education colleges might sit at the better end of the risk profile of Santander’s book as a whole, but actually the diligence we apply internally is exactly the same.
The Chair
If there are no further questions from Members, I will thank the witnesses. Thank you very much, gentlemen. Your agony is now over and we will move on to the next panel.
Examination of Witnesses
Shakira Martin, Shane Chowen and Bev Robinson gave evidence.
The Chair
Welcome. Witnesses, could you please introduce yourselves for Members and the record?
Bev Robinson: Good afternoon, I am Bev Robinson. I have the privilege of being the principal and chief executive of Blackpool and The Fylde College.
Shane Chowen: I am Shane Chowen; I am head of policy and public affairs at the Learning and Work Institute.
Shakira Martin: Good afternoon, I am Shakira Martin. I am the vice-president for further education, representing 4.1 million students across the UK.
Gordon Marsden
Q I welcome all three members of the panel. Were any of you in the room and vaguely listening to our previous panel from the banks?
Bev Robinson: I only heard the last three or four minutes.
Gordon Marsden
Q I only ask as an opener, on the back of the very interesting evidence that we have just had from the banks. We were talking about levels of risk in the situation of potential insolvency, and what the relationship between the education administrator and the actual creditors might be. Could I ask all three of you the same question? Obviously, as principal of a college that I know extremely well and rate extremely highly, you, Bev, would hope never to be in this particular situation. Do you think that in the particular clauses that establish, and balance the functions of, the education administrator, as opposed to the interests of the students and staff at a college that would be affected, the Government have got the balance right? Do you think that there is sufficient detail there for us to feel comfortable with this process?
Shakira Martin: First, I would like to praise the positive step that we are taking in ensuring that students get the best out of this situation, if it were to occur. However, I would like to focus on the Bill, making the point about students not being disrupted in their education. The problem that we at the National Union of Students feel could be encountered is that, for example, it is not clear how the Government will make sure that the colleges that students are transferred to will have the capacity and scope to take on more students at that further time. It is also not clear how the Government will make sure that the education the student receives in the college is kept open and to a high-quality standard. For example, the area review process may have unintended impacts. There will be fewer colleges, further apart. How will travel costs and access be addressed?
Gordon Marsden
Q That point is wider than the one I asked you about, but it is very interesting. We heard the view—I will not say the evidence—of the FE commissioner this morning, who was slightly downplaying the implications of that and said that in some cases mergers could be very beneficial. I think the point that you are making brings us back to the overall point that we have been discussing with the banks: where does the liability—the funding, in other words—for the process actually sit? That is one that I am sure we will continue to explore.
Bev, from your perspective as a college principal of some long standing—not just in Blackpool—and from having had nearly a year, with your colleagues on the panel who produced the skills plan, to look at all the facets and aspects of the FE sector, if you were an FE principal wondering about the future, would you feel that there was sufficient clarity in the Bill? Would you feel that what the education administrator would want to do in that situation would win out?
Bev Robinson: I am not an expert in the field of insolvency but I would make the following observation. First, the Bill is reasonably clear with regard to protecting students. What could be clearer, I feel, is protecting learning for a community in a reasonable travel-to-learn area. I welcome the idea of an education administrator with hopefully an FE background, but it might benefit from having clarity around the different roles of the different people in play—for example, the FE commissioner: how that would work. Because at the end of it all, colleges are businesses and students and learning are at the very heart of that business. Therefore, just to reiterate, I would wish to make sure that learning within a reasonable travel-to-learn pattern was protected as well as students.
Gordon Marsden
That is an issue. I think that is the point you were making, Shakira.
Shakira Martin: Yes. May I add one thing? We would like an amendment to make sure that there are local impact assessments made on local areas, especially with the devolution that is happening and local authorities having more say over what is happening in a local area. I definitely feel that those individual areas need to be looked at really carefully in a bespoke way to make sure that we are meeting those needs.
Gordon Marsden
Yes, I agree. There is very little in the Bill about the impacts of the devolution process except for a perfectly reasonable clause about data.
Shane Chowen: I would not contradict anything that any of my esteemed fellow panellists have said. I would add that, following on from Bev’s point about protecting the learning opportunities in a local area, following area reviews we are looking at quite ginormous FE corporations with budgets of close to or over £100 million. So in some areas where you have quite large group structures, if there was an exceptional incident and that group became insolvent, the kind of ideas Shakira just highlighted around local impact assessments would be particularly important as well as in areas such as rural areas where there are very few colleges and providers that can swoop in and rescue those learning opportunities.
Bev Robinson: With area review, obviously I have got limited experience in my own area.
Gordon Marsden
You are about to get a lot more.
Bev Robinson: I am currently in the area review process, so I am happy to comment on Lancashire but not about across England. That has not been my experience in Lancashire. We are still midway through the process. There has been value in the process and I am not seeing any cold spots at the moment. But I think this is something to watch for in the Bill, so I do want to make this point again. If an unintended consequence is not in a reasonable travel-to-learn area, it could create a cold spot. I remember that words like sufficiency and adequacy were used back in the day to ensure there was sufficiency in an area, and I recommend the Committee considers that.
Secondly, the only thing I wish to question is one of the paragraphs in chapter 7, “Disqualification of Officers”. I question whether that should apply to the college boards and their non-exec directors. I am a little bit concerned that it may discourage students and the business community from serving on colleague boards. I would appreciate it if consideration were given to that point.
Gordon Marsden
Q Incidentally, that point was raised by other witnesses this morning. I cannot remember who it was, but the palette was drawn wider to include local politicians as well. As I listened, I was worried who might be prepared to serve on a board. That is a similar point to the one that was made. I would just like—
Shakira Martin: Gordon, may I add two vital points? Another concern regarding the education administrator is what qualifications and expertise they have within the sector. Are they familiar with the further education sector? When we are talking about widening access, can the Committee also consider care leavers, student parents and those with disabilities? That is it for this section.
Gordon Marsden
Q Right, okay. Can I come back to the institute itself? We had some discussions this morning with Peter Lauener about the genesis of the institute and my concerns about capacity, particularly at the moment. I would like to touch on the issue of representation. Bev, you have quite rightly made a distinction between the community and the learners and the actual organisation in a FE college itself. Do you all believe that learners should be represented on the board of the institute? Over and above the board of the institute, where else can they add value in a process and in a new institution that—at least initially, on the basis of what Peter Lauener said this morning—will have a somewhat limited capacity in terms of the number of people working for it?
Shakira Martin: We 100% believe that there should be a learner on the board. I believe there should be two reserved places: one for an apprentice and one for a student, as their routes into education and experiences will be different. My membership—my apprentices and college students—are consumers, and they need to be around this board. As long as they are taking loan money out, they need to be getting the best deal. Additionally, we have taken the apprenticeship levy from a European model, which is fantastic. However, we have left behind the quality assurance part, which talks about collaboration and working in partnership with colleges, students and other stakeholders. I would like the Committee to consider that.
Shane Chowen: I agree. As the institute is currently set up in statute under this Bill and others, it feels like there is huge value to be added by properly consulting and working with learners at every level of the organisation. I am about to celebrate my 10th year of working in further education, and one of the lines in legislation and regulation that I have learned to fear is “having due regard for learner views”. That relegates properly consulting and involving learners and apprentices to a compliance exercise, and it quickly becomes a tick-box process. The new institute has an amazing opportunity to not do that. Learners should absolutely be on the board.
Each of the 15 route committees can do quite a lot with learners, apprentices and former apprentices. At the end of the day, they are the ones who are looking at jobs, applying for jobs, brushing up their CVs and looking at job specs, so they will have a perspective to add to the development of apprenticeship standards, right from entry up to a higher level. It is not just about the board; it is throughout the organisation.
Bev Robinson: I see merit in having a strong student voice on the board. At the moment, I do not see a strong argument for them on the 15 routes, but I would be open to that. I really welcome a debate on this aspect of the Bill. In this country, professional and technical education has been—I do not know how polite to be—woefully treated. It has been a second class and a last resort, almost. I welcome the Bill putting it where it should be, which is as a first choice rather than a last resort.
Gordon Marsden
Q I hope that is a view shared by everybody in the Committee. I want to probe a little more on the approval process for technical education, and both of you may have something to contribute here. Before being shadow FE Minister, I spent two years as a shadow Transport Minister and I found myself being lobbied by the maritime community because they had developed a series of qualifications—their trailblazers—that were perfectly adequate and excellent for the maritime sector, but then took nearly 18 months to jump through the hoops of the then Department for Business, Innovation and Skills. That is a particular issue in a particular area, but it raises in my mind the question of whether better learner engagement—“learner” in that respect could be treated very widely—in the approval process for technical education would facilitate and improve some of the approval process, so that the lessons from the trailblazers are heeded.
Bev Robinson: I strongly commend co-creation—by co-creation I mean the employer voice is really strong in that, and I feel it has to be. If we learn the lessons from qualifications and the proliferation of qualifications over the last couple of decades, we have lost the employer voice and therefore we have lost some of the value of some qualifications. For me, co-creation is really important. That is about employers and educationists as well as making sure that the student or customer voice—the consumer voice, as Shakira said before—is important. I commend the Committee to consider that.
Shane Chowen: I do not want this to turn into a debate about why there may or may not have been a proliferation of qualifications, but some argue that it is because employers have argued that they did not particularly want it, so something else was developed. I have seen arguments that employers themselves have driven an agenda whereby they have been allowed to create and develop qualifications under a framework —under an employer-responsive model—so there are two sides to that coin. As I said, there are huge opportunities in this Bill to do a lot of great things in technical education and apprenticeships, and it feels like we are halfway there at the moment. An area I feel we can do much more on is widening access and participation in apprenticeships and technical education. If you had learners around the table with a serious voice and a vote, you would find much more innovative, creative and effective ways to engage with marginalised and under-represented groups than you would if you had a panel just of employers.
Gordon Marsden
Q On that point—after this, I will conclude, Ms Dorries—I am struck by the read-across between our discussions on this Bill and those that we had during the Committee stage of the Higher Education and Research Bill, except we have substituted the words “apprentices” for “students”. There is a lot of read-across between this and the Higher Education and Research Bill, and it is right that there is because the Government’s aim is to have higher skills, whichever Bill that comes out of, and this is part and parcel of that.
Yesterday in the Report stage of the Higher Education and Research Bill, we introduced a new clause that would set up a standing commission to look specifically at how we expand adult education and learning. My question is: what more, in the context of this Bill, does the Institute for Apprenticeships and Technical Education need to do to strengthen the argument for widening access and participation with the sorts of groups that we have talked about? I am talking about on the face on the Bill as opposed to saying simply, “Once it gets going I am sure it will think of looking at this.”
Shakira Martin: The Government are talking about parity between the two routes—was it parity? The office for students has just announced that it is going to have a learner voice—a student—at the table and that is where this starts. It starts in this room, from the beginning. You also need to remember that we are not just creating students with qualifications; we are creating citizens. Getting students around the table to take ownership of their learning and of what is happening with them in society is actually having a domino effect. They have been enabled to make decisions, and they will give this back. Once you take ownership of something then you have a much better view, love and respect for it.
I do think that it starts there, by having two reserved places, because studying in the classroom and studying as an apprentice are two very different things. That is why I stress that it needs to be two reserved places. If we are saying that there is parity, then that is the beginning of where it starts.
Shane Chowen: I would go further on that point about parity. I have heard Ministers and Secretaries of State call for parity of esteem and respect between the academic and technical route for many years, and that is laudable. This Bill feels like a good opportunity to move in the right direction with that. One of the first discrepancies is the enormous agenda to widen access and participation that there is in higher education, both in terms of what is in statute—which is why this Bill is important—and also in practice, in terms of what is funded on the ground. So in HE there is an established Office for Fair Access in statute, and the director has statutory responsibilities until the current Higher Education and Research Bill 2016-17 passes, and then that goes to the office for students.
There is a student opportunities fund managed by HEFCE that is worth about £41 million. Universities themselves spend between £700 million and £750 million a year on widening participation action in the form of bursaries and outreach activities. If we are serious about widening access and parity of esteem, there has to be a dual-pronged approach. We cannot have tonnes of resources pumped into widening access on the HE model and then not very much going into widening access on the technical and apprenticeship model, because there are still under-represented groups within the technical and apprenticeship system. There are still communities that are not engaging in the system as much as they should be. The system is not reflective of the employment sector or the general population, particularly when you look at students with disabilities and learning difficulties, and students from black and minority ethnic backgrounds. They are not reflected in the sector in the way that they should be. There is a massive opportunity in this Bill to do something about that.
At the very least, the new institute can have some responsibilities to report annually on progress towards levelling the playing field on improving access and participation, as well as achievement and progression of individuals from under-represented groups. What we can learn from the HE work is that there are already sophisticated models and benchmarks to do that. I do not think that it would be a difficult job. We would not be starting from scratch. It is important that there is a dual-pronged approach if we are serious about parity of esteem.
Bev Robinson: I would like to add something about the importance of careers advice and guidance. Understanding the many opportunities at a young age is key, and with positive models you then see them. Through careers advice and guidance, it is very simple: you can relate to that person and think to yourself, “Well actually if they can achieve that, then so can I.” That is very powerful for social mobility.
Tracy Brabin
Q I would like to ask about the opportunities of courses. My previous background was in the cultural industries, and it seems that culture and design are grouped. How would you like the choices within these brackets to be prioritised? Should the balance be about job creation, rather than careers? Have you had thoughts about the expectations of students and what they would be taking up within these brackets?
Bev Robinson: May I clarify: when you say brackets, do you mean the routes?
Tracy Brabin
Yes—culture and design is one route.
Bev Robinson: Indeed. I was involved in the Lord Sainsbury panel that contributed to the report, so I feel like I have spent a lot of my time and life in looking at that. I feel that there are real opportunities for both. It has to be about career, because it is about a journey. It is really important that we give everyone the opportunity to develop skills, to help them to secure employment for themselves and their families to have strong and healthy lives.
Because the routes are mapped against what the economy needs, it helps with advice and guidance and helps a young person of whatever age to think, “Here’s an opportunity for me. I can see my path and how that fits.” You do not always make decisions and stick to them. It is important that there is enough in there that one can transition across different pathways as well, and this proposal allows for that.
This also goes up to levels 4 and 5—a real engine of the economy in high-value jobs, for want of a better term. We talk a lot about levels 2 and 3 in technical professional education, but we must remember to include levels 4 and 5. I would like to think that this is very much about a journey—a career that enables you to move and develop further as you desire.
Shane Chowen: I welcome that the Bill does not specify that there have to be 15 routes or what those routes are. It leaves that up to the Secretary of State to define the routes and the institute to define what occupations go into those routes. I think there is a clause that says that, if an occupation does not fit into one of the routes, the institute can pop it in somewhere that it sees fit.
I would add that it comes up against this parity with HE argument. In the 24-plus advanced learning loans system at the moment, where you can get funding to go on a course as an individual, in future you would only be able to get an advanced learner loan for a course that would fit in to one of those 15 routes. Most things probably will but the parity issue for me is as follows. No, I do not have a degree. No one will stop me going and doing my first degree in classics and I will get funding for that. If I wanted to do a course that was not within one of those 15 routes—at Bev’s college, for example—I could not get an advanced learner loan for that under the proposals. Sadly, that is the case at the moment—I am involved in the stakeholder group for the 24-plus loans. For me there is also a parity issue around access to funding for individuals. If we are saying in the loan system that the risk is on you—the loan is yours and you are responsible for paying it back—I do not think we can restrict people’s choices into those 15 routes, if there is a course that does not fit neatly within them.
Shakira Martin: The skills plan proposes 15 routes. I have been speaking to my membership already, and this goes back to the reason and importance of why we need them on the board. The 15 routes do not cover qualifications in the retail industry, for example.
My members feel extreme concerns for the arts courses as there is only a route that proposes for arts “Creative and Design”. Those do not cover courses such as performing arts. Learners are already recommending that this route be split into two: applied art and design and performing arts. Again, I would like to reiterate why that is so important. It is this type of stuff we can address if they are around the table in the first instance, instead of learning by trial and error within the sector.
I would also like to draw your attention to how the clause is written. It is under “occupational categories” which, if you are not involved in the sector, you will not understand. That is again another reason why somebody needs to be around the board. The Secretary of State would be given more power to change the routes without consulting students. I would like to put to the Committee that we have an amendment to say that before any of these changes take place, learners should be consulted, as well as information, advice and guidance being part of the process. I agree with what David Hughes said this morning that IAG should be going into key stage 4. I went to the Skills Show this week and that provides an excellent example of IAG in those four days. I strongly recommend you to look into the Skills Show.
Bev Robinson: May I clarify something, please? We are talking about technical professional education. There are other opportunities for learning—A-levels, applied general qualifications—that would cover retail and performing arts. The technical education was not meant to cover absolutely everything. It is meant to cover just technical and professional education, so this would not exclude a learning opportunity because that would be covered by applied general qualifications currently.
David Rutley
Q Thank you for your points. Like all of you, I believe this is very important to help people achieve their potential and to improve social mobility—no question. We are all saying this is a positive step forward. Obviously there is more to follow, but this in itself is a positive step forward. I am keen to focus on these categories for a moment. I know that you were involved with helping to create these, Bev. Obviously, they are important not just for learners but for businesses and employers as well. Does the panel believe that there is enough flexibility in that arrangement to have some defined pathways but to be able to evolve, given what will happen in the economy and in those sectors in future?
Shakira Martin: I believe that, with devolution, we do need to be working at a local level, working in partnership with local organisations, such as local enterprise partnerships, local businesses and small and medium-sized enterprises, to make sure that it is relevant to the needs of that community and that area, and to the needs to the students. This is also why it is vitally important that we are training and educating our students not just for a job in a specific area, but giving them transferable skills to enable them to move out of their area and up into a different industry.
Shane Chowen: Whatever the structures put in place within the institute around oversight of those routes, it is important that they have the necessary authority to make those kinds of recommendations, so if a route needs to be modified in any way, they have the authority to do that. The digital sector, for example, is probably one of the fastest moving of those 15 sectors. That will need to change all the time: the kind of occupations that are listed within those will need to be updated all the time. I would hope that the institute would have the flexibility to allow that to happen.
Bev Robinson: I completely agree: currency is king. We have seen some of the qualifications in the market become terribly out of date. The Bill does allow for flexibility because the institute will be responsible, with those panels, for making sure that it is kept up to date. I really do welcome that.
David Rutley
Q Do you believe that businesses are currently engaged enough in helping to define those categories or routes, and are the mechanisms in place to ensure that will happen?
Bev Robinson: I believe it is. The panels are not there to represent a particular business. Shane alluded earlier to the fact that the panels can sometimes be too narrow, as we have seen with the early trailblazers. Lessons learned from that would suggest that you are on that panel because of your engineering expertise, not because you happen to work for AA Engineering Ltd. It is about keeping that currency and making sure that you are representing not your company but the engineering field. Also, because it is co-creation, having educationalists there as well to make sure that pedagogy is also at the heart of the design of these products.
Shane Chowen: I have nothing to add on that.
Kelvin Hopkins
Q A very important question: what measures should be put in place to protect the quality of education received in a college that is struggling financially?
Shakira Martin: As I said, I welcome the fact that learners are being considered in the insolvency regime. The NUS did put forward some recommendations in the consultation—I think that maybe some of that has not been considered before but, within this process, that is vitally important—of an independent FE ombudsman. When students do go through this process, if they are not satisfied with the end result, what steps do they take in appealing that decision to ensure that they get the best? At the moment there is nothing out there to represent students in that way. I am not really familiar with the HE sector and whether there is the equivalent there, but I am sure that there is probably something in place. After the process has happened and a student has been placed in a college and is not happy with that position—what next? How do they challenge that? I would strongly recommend an independent ombudsman.
Shane Chowen: For me, if it has got to the stage where there are crisis meetings looking at how to recover teachers and get students to a place to learn, at some point along the way the system has already failed. The whole idea behind the commissioner’s office, for example, is to ensure that learners are protected long before a college even starts looking at insolvency as an option. The flags that are highlighted within the Department and the Skills Funding Agency at the moment to trigger a visit from the commissioner, should offer those protections long before an insolvency process.
Bev Robinson: I agree with that; it is about early intervention, not waiting for a failure—it is seeing the signs and making appropriate interventions.
Kelvin Hopkins
Q Pushing that argument further, you quite rightly said that colleges are now businesses after the incorporation in 1993. They have to perform like businesses, even though they are largely publicly funded. We may have a debate about whether that was a good idea or not, but nevertheless that is the situation we are now in. If a principal wants to make money, one way of making money is to squeeze more students in per class, to reduce the quality of the teaching by having less qualified teachers, to put people on courses and not worry about whether they turn up or not—to do all sorts of things that get the money in, but do not actually do the job particularly well.
I speak from some knowledge of a case exactly like that, where a college got into a terrible crisis. The principal disappeared and is now being picked up; I will not mention any names, but you may have been aware of it—it was a notorious national scandal. What is to prevent principals, especially with weak governing bodies, from behaving like this? Many students are not in a position to challenge and staff feel nervous about challenging, because if there is a wilful principal they might choose to get rid of staff, who cannot afford to lose their jobs, and so on. There are those possibilities, unless there are some controls. What would you suggest?
Bev Robinson: What you are citing there is an extreme example.
Kelvin Hopkins
But a real extreme example.
Bev Robinson: I appreciate that it was not fantasy—I appreciate that it was real—but such cases are an absolute minority. There are two golden threads in further education corporations—quality and finance—and it is about the balance of the two. In terms of what measures one could put in place, you have highlighted something: governing bodies—making sure that governing bodies are looking at the two golden threads of quality and money. It is about making sure that there are enough checks and balances within an organisation to allow for challenge; any good organisation would have that. I guess, ultimately, as we mentioned about the FE commissioner before, you would say the FE commissioner again, alongside Ofsted. Remember that with the desk research they do, they would spot within 12 months—if it was a dramatic example, as you cited—that quality suddenly went down very rapidly. That would be a red flag and a trigger. I would like to think that that would not happen, but obviously it does happen in a minority of cases.
Kelvin Hopkins
Q Earlier today I was talking about governing bodies, having had 25 years’ experience on a sixth-form college governing body and some years before that on a college of higher education—which was really a high-powered FE college, with some HE and some FE. With that experience, I know that having the right governing body with the right kind of membership is absolutely crucial so that principals cannot get into that situation.
At the beginning of incorporation, all those years ago, the Government wanted small, tightly knit governing bodies made up of local businesspeople, thinking that that would make it work—the businesspeople would somehow guide the college into producing the right students. It did not actually work, and in the end the Government changed their mind and wanted broader based governing bodies including, of course, students— certainly, at the college I am at, the student council elect their own students on to the governing body—plus some accountants, some lawyers, and some headteachers from local high schools and primary schools. There was a whole range of different skills, so that the college is properly accountable— without having an elected body, but they do appoint their own governors. That approach is a way forward. Can we put that sort of thing into the Bill, to ensure the legislation is improved? I know that you and Gordon know each other very well. I am interested to know what your governing body is like.
Bev Robinson: I am thinking of the unintended consequences. It is very easy to say that we can dictate exactly the constitution of a governing body, but if we are looking at further education corporations across the country, some of them are very different. My own, for example, is an outstanding college. We are very strong financially and so on, and we benefit from the mix and balance that we have on the board: we benefit from our business community and from two very able students on the board. I am hesitant about mandating exactly what that board would look like, because it varies by college. If, for example, I were a land-based college, I might want a slightly different mix, so I am hesitant about fully supporting that.
Shane Chowen: There is an interesting overlap in what you are saying, in terms of what the new accountability and regulatory landscape would look like after the Bill, with the various new bodies. How does Ofsted interact with the institute? How does the OFS interact with the institute, which interacts with Ofsted? Who inspects HE, given that Ofsted does not have a role within that? There is definitely something in cleaning up that landscape and giving the roles and responsibilities within the sector some very clear and defined lines.
We have not spoken much today about the devolution elements within the Bill—I have been here all day, by the way; I’m a superfan. If you are devolving significant sums of money to combined authorities, the Government are absolutely right, on behalf of the taxpayer, to expect some level of accountability and assurance about that. That should be not only raw numbers of how many people are doing qualifications and at what level, but also the extent to which those funds are being managed and accounted for. There might well be another layer of accountability under devolution.
Having said that, combined authorities and LEPs often have representatives on college corporations, so they should be responsible, as governors, for noticing when something is awry—for example, a spike in student complaints when they get their spreadsheets. I am not sure the Bill currently delivers that, so it could be looked at in future.
Shakira Martin: Can I remind everybody that FE has been cut to the core for a long time now? There might be some mismanagement, but when you are cut to the core and trying to change people’s lives on a budget, this is the kind of situation we get into. There is a big call for investment at the moment. I am going to flip this and talk about money and why we need it. Something I picked up from David Hughes this morning is the point about stability and certainty. We are often known as a Cinderella sector. It was welcome to hear the new Secretary for Education put FE at the heart and say that it is a priority. However, investment is needed in that area.
Kelvin Hopkins
Q There were some striking figures this morning about the enormous difference between the spending per student in FE, post-16 and A-level students and in universities. I made the point that at university, you often have a small number of lectures with a couple of tutorials, whereas in FE, and particularly in A-levels and BTECs, you have constant contact with teachers. The level of engagement is much greater between teacher and student.
Shakira Martin: Definitely. There is another thing that is quite frustrating. I welcome the money being put into the adults skills budget, but that is not an investment directly into further education, so I would like the Committee to consider direct investment in FE institutions.
Kelvin Hopkins
In my case, you are preaching to the converted.
Shane Chowen: It might be worth pointing out, just on that point, that there were also figures out last week showing participation in FE and skills, and in the last 12 months we have had the biggest drop in adults participating in basic English and maths training that we have had in six or seven years. That comes at a time when—I think Professor Fuller mentioned this earlier—the UK is ranked bottom of the OECD league tables for literacy and second bottom for numeracy. At a time when we have to send out negotiators and a Secretary of State for International Trade to fly the flag for the UK, those figures look really bad.
The Chair
Order. May I just interrupt here? The questions have to pertain strictly to the provisions in the Bill, as Mr Hopkins well knows. I know it is slightly difficult, but could you keep this answer as short as possible, so that we can move on to questions that do pertain to the Bill?
Kelvin Hopkins
Apologies, Ms Dorries. I have finished now; thank you.
Shane Chowen: I would argue that there would be opportunities in the Bill to place extra emphasis on those kinds of issues that the country faces in international trade negotiations, such as basic literacy and numeracy.
Gordon Marsden
Q I would like to ask this, while remaining within the scope of the Bill. There has been some interesting discussion about priorities, adult skills, training and so on. I want to return us to discussing the institute. If you had been here earlier, Shane, you would have heard a number of questions put to Peter Lauener about the nature of the institute, what its capacity might be and so on. I want to talk about one thing that strikes me about what the Bill is trying to do.
The institute had an interesting genesis, because it did not start out as an institute at all; it started out as a wish list in the Enterprise Bill by the previous Government as to who could actually look after apprenticeships. At one stage, it was going to be trading standards. Obviously, that subsequently was decided not to be the way forward, so the Government brought through, in the Enterprise Bill, the first genesis of the Institute for Apprenticeships, and like Topsy, it has just growed—very beneficially, I think, but that does raise some interesting questions that go to the heart of skills policy and of the new structure that will be set up, so I would like to ask the three of you, from your different perspectives, to answer this. We have heard a lot about apprenticeships. Obviously, that was discussed this morning with Peter Lauener. The technical qualifications are coming into this institute anew, but they bring with them the issue of how many people—actually, adults—need to be retrained and reskilled, the issue of what technical means for them. What should the balance be between the new institute focusing, obviously, on apprenticeships because that is a key Government target—
The Chair
Order. Mr Marsden, we have a vote just before 4 pm, so if we keep to the point of the question, the witnesses will have a chance to answer.
Gordon Marsden
Indeed. What do you think the balance should be in terms of the new institute focusing on apprenticeships, as opposed to focusing on other retraining and reskilling?
Bev Robinson: I would probably go 50:50, because if you look at what we are asking in terms of technical professional education up to levels 4 and 5, there will be a considerable amount of work to do.
Shane Chowen: I would agree, but I also think there is a lot of overlap between the two. One thing we have argued is that the institute could do much more to publicise and promote better data around outcomes for technical education and apprenticeships. That would be the same job for different forms of learning. I am talking about things such as employment outcomes, earnings outcomes, learner satisfaction and employer satisfaction. Those are things that the institute could do jointly between apprenticeships and technical education.
Shakira Martin: One thing that the institute could do is define what an apprenticeship is—is it employment or work? There could also be better initiatives to get young people or just people back into work. An example is council tax exemptions. What does that mean for students who are estranged from their parents or whose parents are on low incomes? If it can be clarified whether an apprenticeship is education, work or both, perhaps we would be able to take steps forward in anticipating what we actually need.
Gordon Marsden
That involves the Minister discussing some of these things with his friends in the DWP and brings us back to the 16-hour rule and also to the conclusion of the sitting, I suspect.
The Chair
Does anyone else have any questions? If there are no further questions from hon. Members, I thank the witnesses for travelling here today and giving evidence.
Ordered, That further consideration be now adjourned.—(David Evennett.)
Criminal Finances Bill (Fifth sitting)
Tuesday 22nd November 2016
(8 years, 1 month 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 22 November 2016 - (22 Nov 2016)
The Committee divided: - Ayes: 5 / Noes: 8 - Question accordingly negatived.
The Chair
With this it will be convenient to discuss the following:
Government amendments 61 to 72.
That schedule 3 be the Third schedule to the Bill.
Clause 33 stand part.
That schedule 4 be the Fourth schedule to the Bill.
Government new clause 18—Forfeiture of terrorist cash.
Government amendments 73 to 75.
The Minister for Security (Mr Ben Wallace)
Good morning, Mrs Main. I am delighted to serve under your chairmanship. This group deals with the provisions in the Bill that allow for the seizure and forfeiture of terrorist property. I suggest that we covered some of this ground in our debates last week on clauses 12 and 13, which will do likewise for proceeds of crime, and I will seek to avoid repeating all the same points.
Clause 32 and schedule 3 cover the seizure and forfeiture of moveable personal items such as precious metals and gemstones where they are earmarked for terrorism, are the resources of a proscribed organisation or are intended for use in terrorism. Clause 33 and schedule 4 give law enforcement agencies new powers to freeze funds held in bank or building society accounts that are suspected to be terrorist money, and provide for such funds to be forfeited if law enforcement agencies or the courts are satisfied that that is the case. Hon. Members will know that the threat from terrorism is constantly evolving. In the same way that we should have a mechanism to deal with criminals who launder money to evade disruption, we should have the ability to seize items that represent terrorist property.
Although this is a powerful new measure, several safeguards are built into the Bill to ensure that the interference with individuals’ rights to enjoy private property is managed in a way that is proportionate and guards against innocent parties being disadvantaged. Seized property may initially be detained for only 48 hours before an application must be made to a magistrates court in England, Wales or Northern Ireland, or to the sheriff in Scotland, for further detention for up to two years. There is therefore judicial oversight of this provision. Individuals who are joint owners of property will be able to claim back the value of their share.
Denying access to funding is already a key part of our counter-terrorism strategy, but the current powers in the Terrorist Asset-Freezing etc. Act 2010 may not always be the most appropriate operational route for combating the financing of terrorism, as they are designed to freeze the entirety of someone’s economic assets, carry a relatively high threshold for use and do not include forfeiture powers. That is why we have tabled several amendments to this part of the Bill.
New clause 18 will ensure that UK law enforcement agencies have the ability to seek forfeiture of terrorist cash without requiring a court order. An administrative forfeiture power is already provided for in the Proceeds of Crime Act 2002, as amended by the Policing and Crime Act 2009. However, the terrorist cash provisions in the Anti-terrorism, Crime and Security Act 2001 were not amended at that time, and we seek to address that anomaly. The new clause will ensure that the best use is made of both the courts’ and the police’s time and resources by providing that there is no need for law enforcement bodies to involve the courts where forfeiture is uncontested.
However, these provisions are not without oversight. Where terrorist cash is seized, extended detention beyond an initial 48-hour period is already subject to oversight by a magistrates court, or the sheriff in Scotland. There is therefore early judicial involvement in the detention and forfeiture process. In addition, the administrative forfeiture of cash will be exercisable only by a senior officer who is a police officer of at least the rank of superintendent.
The other amendments in this group make several technical and consequential changes to complement those provisions. In particular, they address inconsistencies in the definition of “senior officer” in the Anti-terrorism, Crime and Security Act 2001 and the Terrorism Act 2000 to ensure that such a person is at least the rank of superintendent. The amendments will also ensure that a court can order that property be detained under the powers in ACSA for up to six months per application, with an overall cap of two years, which is consistent with the Proceeds of Crime Act, and that these administrative forfeiture powers can be applied for and implemented in Scotland. Taken together, these measures will strengthen law enforcement agencies’ ability to disrupt terrorist financing in a proportionate and effective way.
Dr Rupa Huq (Ealing Central and Acton) (Lab)
I apologise for being slightly late, Mrs Main. Her Majesty’s Opposition support the amendments.
Question put and agreed to.
Clause 32 accordingly ordered to stand part of the Bill.
Schedule 3
Forfeiture of certain personal (or moveable) property
Amendments made: 61, in schedule 3, page 117, line 36, leave out “3” and insert “6”.
This amendment has the effect that an order for the detention of seized property under new Part 4A of Schedule 1 to the Anti-terrorism, Crime and Security Act 2001 may be made for a period of up to 6 months, rather than 3 months. This is in line with the provision made by Part 5 of the Proceeds of Crime Act 2002.
Amendment 20, in schedule 3, page 122, line 28, leave out “designated” and insert “counter-terrorism”.
See the explanatory statement to amendment 16.
Amendment 62, in schedule 3, page 122, line 38, leave out “inspector” and insert “superintendent”.
This amendment has the effect that a police officer must be of at least the rank of superintendent, rather than inspector, in order to be a senior police officer for the purposes of new Part 4A of Schedule 1 to the Anti-terrorism, Crime and Security Act 2001.
Amendment 63, in schedule 3, page 126, line 33, at end insert—
“(5) If sub-paragraph (6) applies, the court or sheriff may order the property to which the application relates to be released to the applicant or to the person from whom it was seized.
(6) This sub-paragraph applies where—
(a) the applicant is not the person from whom the property to which the application relates was seized,
(b) it appears to the court or sheriff that the property belongs to the applicant,
(c) the court or sheriff is satisfied that the release condition is met in relation to the property, and
(d) no objection to the making of an order under sub-paragraph (5) has been made by the person from whom the property was seized.
(7) The release condition is met—
(a) in relation to property detained under paragraph 10C or 10D, if the conditions in paragraph 10C or (as the case may be) 10D for the detention of the property are no longer met, and
(b) in relation to property detained under paragraph 10G, if the court or sheriff decides not to make an order under that paragraph in relation to the property.”
This amendment adds to new paragraph 10O of Schedule 1 to the Anti-terrorism, Crime and Security Act 2001, which concerns the release of property seized under new Part 4A of that Schedule, provision which is equivalent to section 301(4) and (5) of the Proceeds of Crime Act 2002.
Amendment 21, in schedule 3, page 127, line 18, leave out “designated” and insert “counter-terrorism”.
See the explanatory statement to amendment 16.
Amendment 22, in schedule 3, page 127, line 20, leave out “designated” and insert “counter-terrorism”.
See the explanatory statement to amendment 16.
Amendment 23, in schedule 3, page 127, line 28, leave out “designated” and insert “counter-terrorism”.— (Mr Wallace.)
See the explanatory statement to amendment 16.
Schedule 3, as amended, agreed to.
Clause 33 ordered to stand part of the Bill.
Schedule 4
Forfeiture of money held in bank and building society accounts
Amendments made: 24, in schedule 4, page 129, line 1, leave out “designated” and insert “counter-terrorism”.
See the explanatory statement to amendment 16.
Amendment 64, in schedule 4, page 129, line 7, leave out “inspector” and insert “superintendent”.
This amendment has the effect that a police officer must be of at least the rank of superintendent, rather than inspector, in order to be a senior officer for the purposes of new Part 4B of Schedule 1 to the Anti-terrorism, Crime and Security Act 2001.
Amendment 65, in schedule 4, page 131, line 37, leave out “: England and Wales and Northern Ireland”.
This amendment is consequential on amendment 66.
Amendment 66, in schedule 4, page 131, line 38, leave out “made by a magistrates’ court”.
This amendment has the effect of extending the application of the provision in new Part 4B of Schedule 1 to the Anti-terrorism, Crime and Security Act 2001 about the administrative forfeiture of terrorist money held in bank and building society accounts from England and Wales and Northern Ireland to the whole of the UK.
Amendment 67, in schedule 4, page 134, line 11, leave out “a magistrates’” and insert “the relevant”.
This amendment is consequential on amendment 66.
Amendment 68, in schedule 4, page 134, line 16, after “the”, insert “relevant”.
This amendment is consequential on amendment 66.
Amendment 69, in schedule 4, page 134, line 22, after “the”, insert “relevant”.
This amendment is consequential on amendment 66.
Amendment 70, in schedule 4, page 134, line 26, after first “the”, insert “relevant”.
This amendment is consequential on amendment 66.
Amendment 71, in schedule 4, page 134, line 29, after first “the”, insert “relevant”.
This amendment is consequential on amendment 66.
Amendment 72, in schedule 4, page 134, line 35, leave out “, is to be paid into the Consolidated Fund.” and insert—
“—
(a) if, before being forfeited, the money was held in an account in relation to which an account freezing order made by a magistrates’ court had effect, is to be paid into the Consolidated Fund;
(b) if, before being forfeited, the money was held in an account in relation to which an account freezing order made by the sheriff had effect, is to be paid into the Scottish Consolidated Fund.”
This amendment is consequential on amendment 66.
Amendment 25, in schedule 4, page 138, line 15, leave out “designated” and insert “counter-terrorism”.— (Mr Wallace.)
See the explanatory statement to amendment 16.
Schedule 4, as amended, agreed to.
Clause 34
Extension of powers to accredited financial investigators
Amendments made: 26, in clause 34, page 90, line 28, leave out from beginning to end of line 17 on page 91 and insert—
“Counter-terrorism financial investigators
63F Counter-terrorism financial investigators
(1) The metropolitan police force must provide a system for the accreditation of financial investigators (“counter-terrorism financial investigators”).
(2) The system of accreditation must include provision for—
(a) the monitoring of the performance of counter-terrorism financial investigators,
(b) the withdrawal of accreditation from any person who contravenes or fails to comply with any condition subject to which he or she was accredited, and
(c) securing that decisions under that system which concern—
(i) the grant or withdrawal of accreditations, or
(ii) the monitoring of the performance of counter-terrorism financial investigators,
are taken without regard to their effect on operations by the metropolitan police force or any other person.
(3) A person may be accredited if he or she is—
(a) a member of civilian staff of a police force in England and Wales (including the metropolitan police force), within the meaning of Part 1 of the Police Reform and Social Responsibility Act 2001;
(b) a member of staff of the City of London police force;
(c) a member of staff of the Police Service of Northern Ireland.
(4) A person may be accredited—
(a) in relation to this Act;
(b) in relation to the Anti-terrorism, Crime and Security Act 2001;
(c) in relation to particular provisions of this Act or of the Anti-terrorism, Crime and Security Act 2001.
(5) But the accreditation may be limited to specified purposes.
(6) A reference in this Act or in the Anti-terrorism, Crime and Security Act 2001 to a counter-terrorism financial investigator is to be construed accordingly.
(7) The metropolitan police force must make provision for the training of persons in—
(a) financial investigation,
(b) the operation of this Act, and
(c) the operation of the Anti-terrorism, Crime and Security Act 2001.”
This amendment provides for a new system of accreditation and training of financial investigators for the purposes of exercising certain powers under the Terrorism Act 2000 and the Anti-terrorism, Crime and Security Act 2001.
Amendment 27, in clause 34, page 91, line 24, leave out “designated” and insert “counter-terrorism”.
See the explanatory statement to amendment 16.
Amendment 28, in clause 34, page 91, line 36, leave out “designated” and insert “counter-terrorism”.
See the explanatory statement to amendment 16.
Amendment 29, in clause 34, page 91, line 38, leave out “designated” and insert “counter-terrorism”.
See the explanatory statement to amendment 16.
Amendment 30, in clause 34, page 91, line 45, leave out “designated” and insert “counter-terrorism”.
See the explanatory statement to amendment 16.
Amendment 31, in clause 34, page 92, line 2, leave out “designated” and insert “counter-terrorism”.
See the explanatory statement to amendment 16.
Amendment 32, in clause 34, page 92, line 5, leave out “designated” and insert “counter-terrorism”.
See the explanatory statement to amendment 16.
Amendment 33, in clause 34, page 92, line 7, leave out “designated” and insert “counter-terrorism”.
See the explanatory statement to amendment 16.
Amendment 34, in clause 34, page 92, line 11, leave out “designated” and insert “counter-terrorism”.
See the explanatory statement to amendment 16.
Amendment 35, in clause 34, page 92, line 14, leave out “designated” and insert “counter-terrorism”.
See the explanatory statement to amendment 16.
Amendment 36, in clause 34, page 92, line 16, leave out “designated” and insert “counter-terrorism”.
See the explanatory statement to amendment 16.
Amendment 37, in clause 34, page 92, line 20, leave out “designated” and insert “counter-terrorism”.
See the explanatory statement to amendment 16.
Amendment 38, in clause 34, page 92, line 22, leave out “designated accredited” and insert “counter-terrorism”.
See the explanatory statement to amendment 16.
Amendment 39, in clause 34, page 92, line 26, leave out “designated” and insert “counter-terrorism”.
See the explanatory statement to amendment 16.
Amendment 40, in clause 34, page 92, line 28, leave out “designated” and insert “counter-terrorism”.
See the explanatory statement to amendment 16.
Amendment 41, in clause 34, page 92, line 36, leave out “designated” substitute “counter-terrorism”.
See the explanatory statement to amendment 16.
Amendment 42, in clause 34, page 92, line 42, leave out “designated” and insert “counter-terrorism”.
See the explanatory statement to amendment 16.
Amendment 43, in clause 34, page 92, line 44, leave out “designated” and insert “counter-terrorism”.— (Mr Wallace.)
See the explanatory statement to amendment 16.
Question proposed, That the clause, as amended, stand part of the Bill.
Mr Wallace
Across UK policing, more use is being made of skilled individuals who are not warranted police officers to support the full range of police work, allowing warranted officers to focus on the activities that need their specific training and experience. The financial aspects of terrorism investigations are unlike proceeds of crime investigations—this is not about identifying illicit wealth and taking the profit out of crime. For terrorism, financial investigation allows the police to disrupt terrorist activity by removing access to funds, and to make links in terrorist investigations.
As I set out last week, clause 34 provides for the creation of a new category of civilian financial investigator, to be known as a counter-terrorism financial investigator, which will exercise certain existing investigatory powers, including applying to a court for production orders, financial information orders or account monitoring orders, and to seize terrorist cash or moveable stores of value. The investigator will also be able to use new disclosure order powers being created under the Terrorism Act 2000 and the new bank account seizure and forfeiture powers in the Anti-terrorism, Crime and Security Act 2001.
The new provisions do not confer on counter-terrorism financial investigators any of the search powers available in the legislation for terrorist investigations, and the Government amendments we debated last week will ensure that the investigators will be subject to training and monitoring by the Metropolitan Police Service. The changes are entirely consistent with the changes currently being brought in through the Policing and Crime Bill, which will give chief officers a greater ability to designate civilians with the powers of constables.
Finally, clause 35 introduces offences of obstructing or assaulting the investigators. It is important that a civilian performing the functions of, and exercising the same powers as, a police officer is afforded the same legal protections from assault or wilful obstruction as their police counterparts. That is consistent with the approach taken in the Proceeds of Crime Act 2002 and elsewhere in the Bill. I hope the clauses stand part of the Bill.
Dr Huq
We support the clauses but we also have tabled a forthcoming new clause that questions a couple of things. If we are looking at increasing workload, we like the idea of the extension of powers of the accredited financial investigators, but we would like to see some commensurate resources. On the other stuff, public servants should never be assaulted in the line of duty, so we wholeheartedly support that provision.
Question put and agreed to.
Clause 34, as amended, accordingly ordered to stand part of the Bill.
Clause 35
Offences in relation to accredited financial investigators
Amendments made: 44, in clause 35, page 93, line 3, leave out “designated” and insert “counter-terrorism”.
See the explanatory statement to amendment 16.
Amendment 45, in clause 35, page 93, line 4, leave out “designated” and insert “counter-terrorism”.
See the explanatory statement to amendment 16.
Amendment 46, in clause 35, page 93, line 7, leave out “designated” and insert “counter-terrorism”.
See the explanatory statement to amendment 16.
Amendment 47, in clause 35, page 93, line 36, leave out “designated” and insert “counter-terrorism”.
See the explanatory statement to amendment 16.
Amendment 48, in clause 35, page 93, line 37, leave out “designated” and insert “counter-terrorism”.
See the explanatory statement to amendment 16.
Amendment 49, in clause 35, page 93, line 41, leave out “designated” and insert “counter-terrorism”.—(Mr Wallace.)
See the explanatory statement to amendment 16.
Clause 35, as amended, ordered to stand part of the Bill.
Clause 36
Meaning of relevant body and acting in the capacity of an associated person
Question proposed, That the clause stand part of the Bill.
Mr Wallace
Mrs Main, this is like an auction—the speed at which you are dealing with matters. The only person who can understand these things is the auctioneer.
Clause 36 defines essential terms that establish the scope of the new corporate offences of domestic and foreign failure to prevent tax evasion. It defines those entities that can be liable under the new offences, and those persons for whom a corporation can be liable if it fails to prevent them from facilitating tax evasion. The relevant bodies that can be liable under the new offences are defined as bodies incorporated and partnerships, not individual men or women, reflecting the responses to HMRC’s consultation on the provisions. The new offences can therefore be committed by companies, whether established to make a profit or for charitable purposes; partnerships; and similar entities established under foreign law. Indeed, the not-for-profit sector publically welcomed the offence applying to its sector, recognising that charities can be misused to facilitate tax evasion. Individuals involved in facilitating tax evasion will of course continue to face prosecution under existing tax evasion offences.
We will go on to debate the provisions in greater depth, but for now it is important to stress that part 3 of the Bill creates offences of corporate failure to prevent the criminal facilitation of tax evasion. They are not offences of corporate failure to prevent tax evasion itself and do not create a legal obligation for corporations to prevent their client’s tax evasion.
The clause also defines broadly the persons who could attract liability for a relevant body. Those include an employee, an agent and any other person who provides services for, or on behalf of, the relevant body. That mirrors the similar offence of corporate failure to prevent bribery in the Bribery Act 2010. That is important because we have seen in the past that corporations structure their affairs to try to insulate themselves from liability by deliberately contracting out the most risky services, typically to persons based in the most secretive jurisdictions. The definition of associated persons in the clause addresses that and closes that potential loophole.
However, it is important to appreciate that not every act of, say, an employee will give rise to criminal liability for the relevant body. For example, where an employee who has gone home from work and is acting in their private capacity criminally facilitates a tax evasion offence by their partner, that will not give rise to any liability for the employing relevant body because the criminal facilitating act was not done in the capacity of employee. I hope that that explanation provides a useful introduction to how the subsequent clauses will function.
Dr Huq
We support the clause. The Minister mentioned the Bribery Act 2010, from which there has been an unusually small number of successful convictions. Does he have any thoughts as to whether there will be a beefed-up number from this legislation? That is largely what I wanted to ask about it. Many big companies have been blogging that it is a bad idea, which makes me think that it must be a good one.
Mr Wallace
In response to what has been said by the Opposition spokeswoman, it is important to note that the Bribery Act has two effects: prosecution, but also change of behaviour. If one goes out to many parts of the world where British companies are engaged in export or trying to win orders, it is clear that the message has gone out loud and clear not to bribe them and not to be involved in bribery. I was in Kenya a couple of weeks ago, and it is clear that British businesses there—people wishing to do business—do not even ask. That is a cultural change so, as I said, the effect is twofold. One thing that can be said about the Bribery Act is that it certainly went to the heart of things. There were no favours drawn: the first person convicted under the Bribery Act was an employee of the Ministry of Justice, and was convicted quite soon after the introduction of the legislation, so we all work under it, whether we are a civil servant or a business.
Question put and agreed to.
Clause 36 accordingly ordered to stand part of the Bill.
Clause 37
Failure to prevent facilitation of UK tax evasion offences
Amendment made: 50, in clause 37, page 95, line 40, after “England” insert “and Wales”.—(Mr Wallace.)
This amendment corrects an omission in clause 37(8)(b).
Question proposed, That the clause, as amended, stand part of the Bill.
Mr Wallace
Clause 37 creates a new offence that will apply to relevant bodies who fail to prevent persons acting in the capacity of persons associated with it from criminally facilitating a UK tax evasion offence. It also provides a defence for the relevant body of proving that it had in place reasonable procedures designed to prevent persons associated with it from criminally facilitating tax evasion, or that it was not reasonable in the circumstances to expect them to have such procedures.
The offence will apply to any legal person, based anywhere in the world. It does not matter where in the world a relevant body is based. If people are criminally facilitating UK tax fraud, that body can commit the offence and be tried by the UK courts. The offence was first announced in March 2015 and has been subject to two public consultations, including one on draft clauses and guidance. A succession of high-profile data leaks has shown the lengths to which some people will go to hide their taxable income and gains from HMRC, and that there are professionals willing to help them to perpetrate that fraud. There has been unprecedented international action to increase tax transparency around the globe, but that must be coupled with action to tackle those professionals and corporations who are complicit in tax crime.
The existing criminal law already makes it an offence to evade tax. When an individual taxpayer evades their tax, they can be prosecuted. When a professional such as a banker or an accountant is complicit in the fraud, that individual can also be prosecuted. However, for the relevant criminal acts to be attributed to the corporation itself, the existing law on corporate criminal liability requires the most senior members of a corporation to be involved in and aware of those acts. At present, they can simply say, “I did not commit the crime” and blame the individual employee for the offence. That current approach to corporate criminal liability simply does not reflect the decentralised way in which decisions are made in large multinational organisations, and it can leave them beyond the reach of the criminal law.
The new offence will change that. By moving beyond seeking to attribute specific criminal acts to the relevant body, and by focusing instead on its failure to prevent those who act in its name from breaking the criminal law, we can better ensure that relevant bodies take reasonable steps to ensure that crimes are not committed when services are being provided on their behalf. The improved approach to criminal corporate liability has already been adopted with success in relation to the Bribery Act 2010. Businesses are already accustomed to the offence of corporate failure to prevent bribery and much of the new offence will be familiar. I know that hon. Members would like the approach that we are taking to go further still, to cover fraud more generally, money laundering and false accounting. That is an issue to which we will come later, in the debate on new clause 6, which has been tabled by the hon. Member for Ealing Central and Acton.
It is important to note that the offence we are considering is one of tax fraud—tax crime. It is not about tax non-compliance that falls short of being criminal, such as accidental non-payment of taxes. There has been much discussion about how the offence will operate in relation to tax avoidance. Tax avoidance, and even aggressive avoidance, is not a crime and falls outside the scope of this measure. The Bill is, after all, about criminal finances. However, it is right that we distinguish between actions that are within the letter if not the spirit of the law, and fraudulent acts dressed up and marketed as tax planning. We must robustly challenge those who mislabel their criminal behaviour as avoidance or planning; and the Act will address such behaviour.
The clause is not intended to criminalise conduct that is not currently against the criminal law. It is not primarily about what is a crime, but rather about who is held to account before the criminal courts. It seeks to ensure that when crimes are committed in the name of a relevant body, that relevant body can be placed in the dock, alongside the taxpayer evading their tax and the professional enabler criminally facilitating that offence.
I stress that reasonable prevention procedures are needed for the defence to be available. “Reasonable” does not mean excessively burdensome, unduly expensive, disproportionate or foolproof; nor does it demand the impossible. It means taking a risk-based and proportionate approach. Under clause 39, the Government will issue guidance to help business to assess its risks and put prevention procedures in place.
As is the case for the individual accountant, it will not matter where the relevant body is based. British businesses have welcomed the global reach of the new offence as it requires businesses providing services to UK taxpayers, regardless of where in the world those businesses are based, to operate to the same high standards as British businesses. I welcome the cross-party support, and support from the NGOs that I have met, that has been expressed for the measure.
Dr Huq
We support the clause, its global reach and the idea of weeding out corporate bad apples, if that is not mixing too many metaphors—weeds and apples at the same time. The Minister is correct; we think the clause could go further. We have tabled amendments to the next clause.
Richard Arkless (Dumfries and Galloway) (SNP)
We support the clause and, like the Opposition spokesperson, we commend its international reach. We look forward to discussions, perhaps this afternoon, on new clause 6, but instinctively, like Opposition Members, we are minded to take the clause further.
As time goes on, we ought to monitor the issue of designing processes that demonstrate that reasonable measures have been taken not to facilitate tax evasion. As a consumer finance lawyer, I have seen large multinational organisations roll out various folders of processes, procedures and protocols, but we were not always convinced that those had been followed to the letter. Some sort of monitoring mechanism would be most helpful.
We ask the Government to take note of the evidence we heard last week that these measures could disproportionately impact smaller organisations; larger organisations may be more suited to gathering this information in order to set out processes and procedures. We should keep an eye on those two things. We look forward to discussions on new clause 6 and support the clause.
Mr Wallace
To clarify, I think that statutory guidance is first published in draft. Given the hon. Gentleman’s experience, I would welcome his input on whether that guidance is appropriate. We did that with the Bribery Act; I remember when that came out. Statutory guidance is an important tool for small businesses, because big businesses have big compliance departments and can do all the work even without the statutory guidance, but for small or medium-sized businesses, the statutory guidance is a good starting point. It is really important both that we get it right, and that we get it written in plain English.
I reiterate the offence created by the clause: if someone in a Crown dependency or overseas territory—I know that hon. Members are interested in those—is advising UK citizens to evade UK tax, it does not matter that they have no nexus here; they are criminally at risk. As regards trying to change the behaviour of overseas territories or tax havens, this offence will allow us to prosecute people anywhere in the world who are encouraging people to evade UK tax. That is a major and significant step. If someone on a Caribbean island calls themselves a tax consultant and encourages British people to evade tax, we will come after them. That is a major change that goes beyond the shores of the United Kingdom. I hope that the action that we have taken to stop that will go some way to alleviating colleagues’ concerns about the behaviour of some tax havens around the world.
Question put and agreed to.
Clause 37, as amended, accordingly ordered to stand part of the Bill.
Clause 38
Failure to prevent facilitation of foreign tax evasion offences
Dr Huq
I beg to move amendment 5, in clause 38, page 96, line 6, after “United Kingdom” insert—
“Crown dependency or British overseas territory”.
This amendment would extend the offence of failure to prevent facilitation of foreign tax evasion offences to companies incorporated in a British Overseas Territory or Crown Dependency.
The Chair
With this it will be convenient to discuss the following:
Amendment 6, in clause 38, page 96, line 7, after “United Kingdom” insert—
“Crown dependency or British overseas territory”.
This amendment would extend the offence of failure to prevent facilitation of foreign tax evasion offences to companies doing business in a British Overseas Territory or Crown Dependency.
Amendment 7, in clause 38, page 96, line 9, after “United Kingdom” insert—
“Crown dependency or British overseas territory”.
This amendment would extend the offence of failure to prevent facilitation of foreign tax evasion offences to conduct conducted in a British Overseas Territory or Crown Dependency.
Dr Huq
These amendments in my name and those of my hon. Friends the Members for Swansea East, and for Bootle, seek to extend the offences of failure to prevent facilitation of foreign tax evasion, and all the other good work described in clause 37, for which the Scottish National party and ourselves praised the Minister, to companies incorporated in a UK overseas territory or Crown dependency. I stress how much we welcome the new offences on failing to prevent tax evasion, and the fact that they can apply anywhere in the world, as the Minister pointed out. However, we wish that they related to all economic crime, rather than just tax evasion, and that they covered companies doing business in overseas territories and Crown dependencies, and offences committed there.
This is quite a chunky Bill that is broad in scope, but this seems to be the gaping hole—the elephant in the room. Almost all those who gave evidence, and all the speeches on Second Reading, including those from respected Members on both sides of the House, such as the right hon. and learned Member for Harborough (Sir Edward Garnier), mentioned that this was a bit of an oversight. There is no mention of the issue at all in the Bill, and that is why we tabled these probing amendments to help the Committee better understand exactly how the new offences relate to the UK’s tax havens, as the Minister termed them; that is how they are perceived all around the world.
I raise the issue because we all know that the UK may well be facilitating tax evasion through its overseas territories. It is worth pointing out that the Foreign and Commonwealth Office appoints a Governor in each of these jurisdictions. The opaqueness and lack of transparency in these places makes it difficult to know the scale of the problem, but we know that developing countries are losing out massively. This legislation rightly seeks to hold directors of companies in the UK accountable for their business’s actions, but why does it not also apply to the UK’s overseas territories? The lack of accountability of directors there is dangerous.
Let us take the example of the British Virgin Islands, the jurisdiction that received the most mentions in the Panama papers, I believe, which is nothing to be proud of. Given its role in the Panama papers, is it not reasonable to talk about having more oversight of this UK-governed territory? It has more than 450,000 companies; nobody quite knows the exact number. That is at least 15 companies for every person—an unusually large number of companies. Every person would need to have 13 board meetings every day to get through all of them in a year.
It sounds like a bold suggestion, but we think that more action is needed. I have five questions for the Minister. When the UK receives information on the beneficial owners of companies registered in the British Virgin Islands, will it use it and look for potential tax evasion? Is there an active duty on the part of the Government? What action will they take if they find any tax evasion? How will owners of British Virgin Islands companies be held to account for their actions? What discussions has the Minister had with leaders of overseas territories and Crown dependencies about these excellent new offences? Are any of them minded to consider introducing something similar on a voluntary basis? We do not want to look like neo-imperialists, going into countries and making them do stuff, so what are they doing of their own volition? If offences are committed in UK-governed overseas territories, under what circumstances would prosecutions be possible under this new legislation?
The last question is the most important one, and the one that would help me to understand this: does the Minister concede that, as clause 40(1) refers to clause 38(2), his Bill effectively allows places such as the British Virgin Islands and the Cayman Islands to facilitate tax evasion on an industrial scale, provided that the companies have no business dealings in the UK? There has to be that link first; they have to have an office, or be somehow incorporated, in the UK. Sham businesses go to those territories only because they are implicitly backed by UK law. Historically, overseas territories and Crown dependencies have been able to market the attractiveness of their financial services by highlighting the fact that the UK rule of law underpins their systems; thus the situation is perpetuated. The fact that people can stash their dirty cash there is part of the unique selling point of these places. I am curious about how the provisions would apply to overseas territories and Crown dependencies if that UK link was not there.
Richard Arkless
We are interested in hearing what the Minister has to say on the clause before we make any submissions. We take the point about the link to a UK company, but we are also concerned about this House’s authority to legislate—or be seen to be legislating—over Crown dependencies.
Mr Wallace
I understand the importance that Members attach to the amendments, and what they are trying to do. They allow us to begin the debate on the response of the British overseas territories and Crown dependencies to tax evasion, and fraud and corruption more broadly. I am sure that that debate will continue as we consider other amendments later today.
The Opposition’s amendments 5, 6 and 7 are designed to give the foreign tax evasion offence a broad scope, and to ensure that corporate complicity in tax evasion is tackled effectively. On that objective, I share the intentions of the hon. Member for Ealing Central and Acton. Before addressing the amendments specifically, I want to clarify that the foreign tax evasion offence in clause 38 would, as drafted, apply to a relevant body that is incorporated under the law of the UK, or carrying out part of a business activity from the UK, and where a person acting in the capacity of an associated person of the relevant body criminally facilitates tax evasion from within the UK, regardless of where the relevant body is based. The offence would, therefore, require there to be some nexus with the UK for our authorities to exercise jurisdiction; that would include a bank that is based or doing business in the overseas territories and Crown dependencies also doing business in the UK.
However, the hon. Lady’s amendments would criminalise, under the UK law, a situation where there is no link to the UK. For example, if a Norwegian were to set up a business in a tax haven, and that business were to advise an American citizen on how to evade tax, and it had nothing to do with the UK at all—we had no loss of revenue and no business with either the Norwegian or the American—the hon. Lady would be asking us to criminalise that person, and effectively to become the world’s policeman on that issue. We would have no nexus whatsoever to go after that individual; neither they nor the company helping them to evade tax would be British. We would perhaps have some ability, in some instances, to help our neighbour’s tax authorities, as we share data under agreements reached over the last year or so. For example, if we find out that someone is helping the French to evade tax, our law enforcement agencies do share information.
The amendment seeks to force Crown dependencies and overseas territories to change their law. It seeks to use neo-imperialism, to use the hon. Lady’s term, to force our will on territories with those statuses. That is a major step to take. As I said earlier, we have come a long way—90% of the way—with the establishment next year of automatic sharing of data via beneficial registers of ownership. Yes, that is not public, and I know that we will come on to that later in the Bill, but we have come a considerable way, and we should remember that.
We should also remember that because of the City of London, there will not be many financial organisations that do not have a nexus in this country. I am not going to finger a particular country, but the bank of a fictitious country with tax haven status would not be much of a bank if it did not have an operation in the UK. If that bank was encouraging people to evade tax, even if they were not British citizens or were not evading UK tax, we could deal with it, because it would have a branch here. If those concerned were convicted, they would most likely lose their banking licence. A bank that cannot trade in one of the major financial institutions of the United Kingdom is effectively a dud. In a sense, we could take quite considerable action. The fundamental difference is that we think there has to be a link. The alternative is to impose our will directly on these Crown dependencies and overseas territories.
I would like to correct the hon. Lady on two things. They are not “our” territories; we do not own them. The Crown dependencies have never been ours. They have never been part of the British Empire—well, they have never been part of our colonies. We do not even own the overseas territories. We have a governing oversight, but they have Parliaments and elections of their own, and they make their own decisions.
I think the direction of travel—my officials have been directly in touch with the Crown dependencies and the overseas territories—has been right. We are going some considerable way from where we were three or four years ago. Those places have smelt the coffee, and the world is moving forward.
Richard Arkless
We agree with that summary from the Government. The Minister describing the amendment as “neo-imperialism” put the seal on my view of it. The Scottish National party is reluctant to legislate on areas where there is no locus and no nexus and we fully accept that that is the position of the Crown dependencies. We accept the Minister is keen to see that direction of travel continue. In that vein, we have held meetings with representatives of the Crown dependencies over the last few weeks and have been assured that their co-operation in providing information for the register of beneficial ownership is groundbreaking. It will be co-operative and give the authorities in the UK the armoury they need to tackle financial criminality.
I agree it is very likely, if not probable, that organisations facilitating tax evasion, whether in the Crown dependencies or overseas territories, will have a link to the UK and are more likely, more often than not, to have their head office in the UK. We may need to address that again once we leave the European Union, but we can discuss it.
Dr Huq
I listened carefully to what the Minister said and was slightly disappointed. I said precisely that I do not want to be neo-imperialist. I do not want to rush into these countries, which is why I asked what was happening already and whether there is any way those people can do things on their own. I did not say that we own those places; I simply said that the UK rule of law underpins their systems.
The Prime Minister said on the steps of Downing Street that she wants an economy that works for everyone. This looks like an anomaly from all the evidence we have had from all those groups, and from all the speeches on the Floor of the House on Second Reading. However, we are not going to push the measure to a vote. It was a probing amendment. I wanted to hear more about the anomaly where there is a direct UK connection. I do not think it is sufficient to turn a blind eye while this goes on.
The Minister mentioned what has happened in some of these places and I have information that will be more relevant when we consider new clause 21. Therefore, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendment made: 51, in clause 38, page 96, line 37, after “England” insert “and Wales”.—(Mr Wallace.)
This amendment corrects an omission in clause 38(7)(b).
Question proposed, That the clause, as amended, stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
New clause 7— Corporate probation order—
‘(1) A court before which a relevant body (B) is convicted of an offence under section 37 or 38 of this Bill may make a corporate probation order in relation to B.
(2) A corporate probation order—
(a) shall require B to implement a compliance procedure or make changes to an existing compliance procedure to prevent persons acting in the capacity of a person associated with B for committing UK tax evasion facilitation offences or foreign tax evasion facilitation offences;
(b) may require B to appoint an external body to verify that compliance programme, costs of which shall be met by B.
(3) A corporate probation order may be made only on an application by the prosecution specifying the terms of the proposed order. Any such order must be on such terms (whether those proposed or others) as the court considers appropriate having regard to any representations made, and any evidence adduced, in relation to that matter by the prosecution and on behalf of B.
(4) Before making an application for a probation order the prosecution must consult such enforcement authority or authorities as it considers appropriate having regard to the nature of the relevant offending.
(5) An organisation that fails to comply with a corporate probation order is guilty of an offence, and is liable—
(a) on conviction on indictment, to a fine,
(b) on summary conviction in England and Wales, to a fine,
(c) on summary conviction in Scotland or Northern Ireland, to a fine not exceeding the statutory maximum.
(6) For the purposes of this clause “relevant body” has the same meaning as in section 36.’
This new clause would allow courts to require bodies found guilty of a UK or foreign tax evasion facilitation offence to make steps to improve their internal procedures to minimize the chance of persons working for that company committing the same offence in the future.
New clause 8—Facilitation of tax evasion offences: disqualification of directors—
‘(1) Where a body (B) has been convicted of an offence under sections 37 and 38 of this Act the Secretary of State must arrange for the relevant enforcement authorities to investigate the conduct of the directors of B.
(2) The purpose of the investigation under this subsection is to determine whether the directors of B were grossly negligent by failing to ensure that B had in place reasonable prevention procedures.
(3) In section 8 of the Company Directors Disqualification Act 1986, after sub-paragraph (ii) insert—
(iii) an investigation under section [Facilitation of tax evasion offences: disqualification of directors] of the Criminal Finance Act”
(4) For the purposes of this section—
“enforcement authorities” means one or more the bodies listed in subsection 362A(7) of the Proceeds of Crime Act 2002.
“prevention procedures” has the same meaning as in subsection 37(3) where B was convicted of an offence under section 37, or as in subsection 38(4) where B was convicted of an offence under section 38.’
This new clause would require the Secretary of State to investigate the directors of a company found guilty of a UK or foreign tax evasion offence to see whether the directors should be subject to a disqualification order for the failure to have proper procedures in place to prevent agents of that company facilitating tax evasion.
Mr Wallace
Perhaps I may clarify for the hon. Member for Ealing Central and Acton that I said she used the word “neo-imperialism”—I never implied that she wanted to be neo-imperialist, but some people could describe it as that if we were to impose our will on Parliaments in some of our overseas territories.
Clause 38 creates a new offence that will be committed by relevant bodies that fail to prevent persons associated with them from criminally facilitating evasion of taxes owed to a country other than the United Kingdom. We have seen that criminals seeking to provide services to further their clients’ tax evasion will try to operate between the gaps between the legal systems of different countries. The measure will ensure that the UK is not a safe harbour for professional facilitators or the businesses for which they work. The new overseas tax evasion offence can be committed by relevant bodies that are formed or incorporated in the UK, or which are carrying out a business activity in the UK, or where the criminal act of facilitation occurs within the UK.
There is a necessarily broad scope for the new offence. It holds corporations that carry out a business in the UK, or the representatives of which are acting in the UK, to operate to the same high standards as UK businesses. The message is clear. Tax evasion is a crime. It is wrong. It is no less wrong where the revenue loss is suffered by another country. If a body is part of UK plc, or sends people to the UK, it is not okay to allow people to criminally facilitate the evasion of taxes, wherever they are owed.
The offence requires a dual criminality. Essentially, that means that, for a relevant body to be liable, the criminal law of the country suffering the tax loss must recognise tax evasion and the facilitating of tax evasion as criminal offences in their jurisdiction, and the laws must be broadly equivalent to those in the UK.
The offence does not require relevant bodies to have a thorough understanding of the tax laws in each jurisdiction, but rather to ask itself the question, “If we were providing these services to a UK taxpayer client, would this be legal?” If the answer is yes, there is no question of criminal liability under the new overseas fraud offence.
The offence is not about the UK policing the world’s tax affairs. We envisage that a prosecution for the overseas tax evasion offence will take place only where there would otherwise be a failure of justice—for example, where the country suffering the tax loss was unwilling or unable to take action because of an inability to handle a complex international fraud trial, or was unable to investigate and prosecute because of corruption concerns. I will leave my explanation of the clause there and allow the hon. Member for Ealing Central and Acton to speak to her new clauses before I respond.
Peter Dowd (Bootle) (Lab)
It is a pleasure to serve under your stewardship, Mrs Main. The Minister referred to this as the Criminal Finances Bill and the clue is in the name. People who commit an offence and go to prison come out and go on probation. New clause 7 would create a similar thing—a sort of corporate probation order that would allow courts to require bodies found guilty of a UK or foreign tax evasion facilitation offence to take steps to improve their internal procedures and minimize the chance of a person working for that company committing the same offence in future. That would be an important step in encouraging large organisations to take responsibility for those they hire and the actions they undertake, and more importantly in ensuring that financial crime and misconduct is not repeated by others in the organisation.
Before making an application for a probation order, the prosecution would have to consult enforcement agencies. Once a corporate probation order had been issued, any organisation that failed to comply with it would be subject to a fine. Currently, the only remedies a court may impose upon a company convicted of an offence is a fine, disgorgement of profit and compensation. Corporate probation orders would be an additional tool that prosecutors could seek. Courts could impose conditions requiring companies to undertake remedial action to their management and compliance procedures to ensure that the offending is not repeated.
Under the Corporate Manslaughter and Corporate Homicide Act 2007, courts can impose remedial orders on companies to require them to remedy any management failure that led to an offence occurring. This provides a workable pre-existing model for such orders. Under the Crime and Courts Act 2013, if a company is offered a deferred prosecution agreement, or DPA, a prosecutor can require a company to implement a compliance programme or make changes to an existing compliance programme. There is no equivalent power in relation to convictions. DPAs are reserved for companies that self-report their misdemeanours and co-operate with enforcement authorities.
Although prosecutors could, theoretically at least, use financial reporting orders to require a company to provide financial information, under the Serious Organised Crime and Police Act 2005, it is not clear that that would include information on compliance procedures. Additionally, such orders are heavy-handed, require separate court proceedings and require a prosecutor to prove that the risk of reoffending is sufficiently high.
The effect of that discrepancy is a ridiculous imbalance: companies that self-report and co-operate may be subject to greater monitoring of their compliance programme than companies that do not and are convicted. The result is that the companies that most need monitoring of their compliance procedures—those whose procedures did not pick up the wrongdoing in the first place—get none, which is a huge deterrent to self-reporting, and puts a greater burden on enforcement agencies.
The Opposition believe that corporate probation orders are required to remedy that clear anachronism. Companies and defence lawyers have noted the more stringent compliance programme monitoring requirements under DPAs as one factor, among others, that puts companies off self-reporting wrongdoing to the Serious Fraud Office. The discrepancy between what happens under DPAs and what happens on conviction is creating a disincentive for companies to self-report.
At the end of the day, we need to encourage self-reporting in a framework in which companies feel that they are able to work with enforcement agencies to deal with rogue elements or individuals. The alternative would see the continuation of a culture of secrecy in which those at the top deliberately turn a blind eye to what those at the bottom do, and in which financial misconduct is not limited to an individual, but instilled and passed on to others in an organisation.
Richard Arkless
The Scottish National party is broadly in support of the new clauses. In particular, a corporate probation order would give an opportunity for an offending company to have its processes meticulously examined to ensure that they are fit for purpose going forward. We support new clause 8 on the potential disqualification of directors, which goes beyond the relevant body offences in the Bill. As a matter of principle, we think it will concentrate minds and ensure the protocols are fit for purpose if the directors at the top of the organisation feel the liability could be at their heels, as it were. I am interested to hear what the Minister has to say.
Several hon. Members rose—
The Chair
Order. I gather that Mr Dowd wants a second bite at the cherry on new clause 8.
Peter Dowd
I apologise, Mrs Main. I was going to deal with new clause 8 and was pre-empted, I am afraid. New clause 8 relates to the facilitation of tax evasion offences and the disqualification of directors.
It will be pretty apparent to hon. Members that a central theme to proceedings so far, as promulgated by virtually everybody, is the notion of transparency in the actions of those in positions of stewardship, such as directors of companies. Opaqueness has its advantages, I have no doubt, but when it leads to illegality there must be action to deal with it. Given that, the new clause would require the Secretary of State
“to investigate the directors of a company found guilty of a UK or foreign tax evasion offence to establish whether the directors should be subject to a disqualification order for the failure to have proper procedures in place to prevent agents of that company facilitating tax evasion.”
Under the new offences covering the facilitation of tax evasion, a company could be criminally held to account if an employee commits such an offence. That is a huge step forward. However, there is a danger that senior executives, who are ultimately responsible for ensuring the company has in place the procedures to prevent its involvement in the facilitation of tax evasion, will escape any individual accountability under such an offence. The purpose of new clause 8 is to ensure that, where a company is convicted, the director of that company should be investigated with a view to disqualification, as happens currently when a company is held to have breached competition law, for example.
A perfectly legitimate question is whether new clause 8 is taking a hammer to crack a nut. That has been alluded to in past debates. I contend that it is not, because tax evasion has huge implications for the public purse, not just in lost revenue but in relation to public confidence in the tax system.
Mr Wallace
I am grateful to the hon. Member for Bootle and pleased to say that the Government are supportive of what he is trying to achieve—that the new offences should be as effective as possible at changing corporate behaviour, and that law enforcement should have the tools it needs to police the new laws effectively. However, I hope to reassure him and his hon. Friends that those matters are already provided for.
As the hon. Gentleman said, new clause 7 would introduce a system of corporate probation orders, which would allow a court to require relevant bodies found guilty of the new corporate offences to make changes to their prevention procedures. Hon. Members should be aware that clause 43(2) adds those offences to the list of offences for which a serious crime prevention order can be imposed under the Serious Crime Act 2007. Serious crime prevention orders allow for a court passing sentence on a person or corporate body to impose prohibitions, restrictions or requirements to prevent, restrict or disrupt involvement in serious crime. Those orders are already available and can successfully disrupt tax fraud. Where such an order is made against a relevant body, its terms may require the body to allow a law enforcement agency to monitor how it provides services in the future.
Additionally, where the corporation in question is in the regulated sector, the regulator may, quite independently of a serious crime prevention order, undertake monitoring of the relevant body, relevant to failings in its systems and controls. For example, the Financial Conduct Authority could take steps to disqualify directors or put extra conditions on to the companies. It is the Government’s view that the hon. Gentleman’s objective can be achieved by applying the existing power to impose serious crime prevention orders on conviction of the new offences, or within the terms of the deferred prosecution agreement. Those orders can do anything that corporation probation would do.
New clause 8 would create a duty on the Secretary of State to investigate the directors of a company found guilty of a UK or foreign tax evasion offence, to see whether they should be disqualified. The existing law already allows the Secretary of State to apply to a court to have a director disqualified where he or she believes that that is in the public interest. A court can grant such an order when it is satisfied that the director’s conduct makes him unfit to be concerned in the management of the company. There is no evidence of which we are aware that the power is not being used in the appropriate cases. When not used, it is not used for appropriate reasons. When company directors are charged with offences, the sentencing court can consider disqualification.
Where the new offence is charged and the relevant body is not tried alongside a director, prosecutors will still be able to refer cases to the Secretary of State so that an application for disqualification can be considered. Indeed, there may be cases when sentencing judges recommend that this is done in their sentencing remarks. In short, rather than creating new law, we again consider it proper for the new offences to sit alongside, and work within, the existing legislative framework for disqualifying directors. If regulators have evidence that a director is unfit to be concerned in the management of the company, they can refer the case to the Secretary of State to make an application to have that director disqualified.
I hope that the hon. Members for Ealing Central and for Bootle, and others, agree that these points are therefore already accounted for, that they do not feel the need to move their new clauses, and that clause 38 can stand part of the Bill.
Question put and agreed to.
Clause 38, as amended, accordingly ordered to stand part of the Bill.
Clause 39
Guidance about preventing facilitation of tax evasion offences
Question proposed, That the clause stand part of the Bill.
Clause 39 requires the Government to produce guidance on reasonable prevention procedures, and empowers the Government to agree supplementary guidance produced by others, such as industry and trade bodies. The aim of the guidance is to help organisations to understand and avoid committing the new offences by undertaking a risk assessment and establishing reasonable prevention procedures to address their risks. The guidance is vital to the success of the offences and will mean higher levels of compliance with the new legislation, creating the desired culture change, and ultimately leading to a reduction in the criminal facilitation of tax evasion. In parallel, it will help to avoid an unnecessarily defensive approach to compliance, whereby excessive prevention procedures are adopted that constitute an undue regulatory burden.
Whether any relevant body can avail itself of the reasonable procedures defence will always be a matter for the criminal courts. The guidance will be only an illustrative set of principles, not a list of absolute requirements. Departure from the guidance will not mean that the defence is unavailable and that the relevant body is guilty. There may well be many different approaches—all equally reasonable—to preventing tax evasion facilitation offences by those who act in the relevant body’s name. Equally, following the guidance does not lead the relevant body to safe harbour rendering it immune from prosecution. Even full compliance with the guidance might not amount to having reasonable prevention procedures if the prevention procedures ignore a particular risk that the relevant body’s particular business carries.
Her Majesty’s Revenue and Customs consulted with industry extensively on what support was needed to ensure compliance with the new offences. The overwhelming feedback revealed a desire for guidance akin to that already produced for the similar offence of corporate failure to prevent bribery in the Bribery Act 2010. The last draft guidance was published at the same time as the introduction of the Bill and has received positive feedback. HMRC continues to work with a number of leading financial service trade bodies on developing detailed supplementary guidance for the sector. I hope the clause stands part of the Bill.
Dr Huq
We all need guidance in life. The measures sound eminently sensible and the Minister described them cogently. We support the clause.
Question put and agree to.
Clause 39 accordingly ordered to stand part of the Bill.
Clause 40
Offences: extra-territorial application and jurisdiction
Question proposed, That the clause stand part of the Bill.
Mr Wallace
Clause 40 provides for the extraterritorial application of the corporate failure to prevent offences. The UK’s criminal courts will have jurisdiction to try the domestic tax offence in clause 37, regardless of where the conduct took place. The UK courts claim jurisdiction as a result of the UK suffering the tax loss. With respect to the foreign tax offence, our courts again claim jurisdiction on the basis that the relevant body has a nexus with the UK, such that it can be regarded as part of UK plc and thus is required to abide by the criminal law of this country. We have seen, and our partners in other jurisdictions have confirmed that they have also seen, that those deliberately facilitating tax evasion will typically offshore illicit services to try to avoid detection and to hide in the gaps between domestic legal systems.
Those facilitating offshore tax evasion often do not provide those services from within the geographic borders of the country whose tax loss they are facilitating. It is therefore vital that both the domestic and the overseas tax evasion facilitation offences capture activity that takes place outside the United Kingdom. Failure to apply the laws in such a way would lead to loopholes that could be easily exploited. By its very nature, the foreign tax evasion offence is likely to raise a complicated range of competing interests and issues, including those relating to international relations and diplomatic affairs.
Clause 41 puts appropriate safeguards in place by requiring that a decision to prosecute the offence is taken only by, or with the authority of, the director of these prosecuting bodies: the Director of Public Prosecutions, the director of the Serious Fraud Office or the Director of Public Prosecutions for Northern Ireland. A similar protection is in place for prosecutions for the corporate failure to prevent bribery under section 7 of the Bribery Act. I hope the clauses stand part of the Bill.
Dr Huq
Her Majesty’s loyal Opposition support clause 40.
Question put and agreed to.
Clause 40 accordingly ordered to stand part of the Bill.
Clause 41 ordered to stand part of the Bill.
Clause 42
Offences by partnerships: supplementary
Question proposed, That the clause stand part of the Bill.
Mr Wallace
Clause 42 makes provision for rules of criminal procedure in relation to the prosecution of companies to apply to prosecutions of partnerships for the new offences in part 3. It mirrors section 15 of the Bribery Act 2010 and provides that proceedings for an offence under clauses 37 or 38 are to be brought in the name of the partnership and not that of an individual partner; and that any resulting fine is paid out of the assets of the partnership. The clause also applies existing rules of criminal procedure applicable where bodies corporate are prosecuted. They cover various matters including the transfer of cases from the magistrates court to the Crown court, the representation of the relevant body in court, the entering of pleas and the taking of action in the relevant body’s absence.
As I mentioned in debating an earlier group, clause 43 amends a number of pieces of existing legislation, adding the new offences created by part 3 to the lists of offences for which various powers are available, which will assist the effective investigation and prosecution of the offences. That includes allowing the CPS to require suspected persons to answer questions or provide information in relation to those offences; allowing for serious crime prevention orders to be imposed on relevant bodies; and providing for deferred prosecution agreements.
Clause 44 is simply an interpretation clause, defining terms within part 3. I hope the clauses stand part of the Bill.
Dr Huq
We support the clauses.
Question put and agreed to.
Clause 42 accordingly ordered to stand part of the Bill.
Clauses 43 and 44 ordered to stand part of the Bill.
New Clause 9
Immigration officers
‘(1) Section 24 of the UK Borders Act 2007 (seizure of cash) is amended as follows.
(2) For the heading substitute “Exercise of civil recovery powers by immigration officers”.
(3) For subsection (1) substitute—
(1) Chapters 3 to 3B of Part 5 of the Proceeds of Crime Act 2002 (civil recovery) apply in relation to an immigration officer as they apply in relation to a constable.”
(4) In subsection (2)(a), for “section 289” substitute “sections 289 and 303C and Chapter 3B”.
(5) In subsection (2)(c), for “and 297A” substitute “, 297A and 303E and in Chapter 3B (see section 303Z2(7))”.
(6) In subsection (2)(d), for “section 292” substitute “sections 292 and 303G”.
(7) In subsection (2)(e), for “and 293A” substitute “, 293A, 303H and 303I”.
(8) In subsection (2)(f), in the words before sub-paragraph (i), after “295(2)” insert “or 303L(1)”.
(9) In subsection (2)(f)(ii), after “298” insert “or (as the case may be) 303O”.
(10) In subsection (2)(g), after “298” insert “, 303O or 303Z14”.
(11) In subsection (2)(h), after “302” insert “, 303W or 303Z18”.” .—(Mr Wallace.)
Immigration officers exercise the civil recovery powers conferred by Chapter 3 of Part 5 of the Proceeds of Crime Act 2002 by virtue of section 24 of the UK Borders Act 2007. These amendments of section 24 provide for immigration officers to be able to exercise the civil recovery powers conferred by new Chapters 3A and 3B of Part 5 of the Proceeds of Crime Act 2002 (see clauses 12 and 13 of the Bill) in the same way.
Brought up, read the First and Second time, and added to the Bill.
New Clause 10
Forfeiture of cash
‘(1) In section 289(6) of the Proceeds of Crime Act 2002 (meaning of cash for purposes of Chapter 3 of Part 5 of that Act), after paragraph (e) insert—
“(f) gaming vouchers,
(g) fixed-value casino tokens,”.
(2) After section 289(7) of that Act insert—
“(7A) For the purposes of subsection (6)—
(a) “gaming voucher” means a voucher in physical form issued by a gaming machine within the meaning of the Gambling Act 2005 (see section 235 of that Act) that represents a right to be paid the amount stated on it;
(b) “fixed-value casino token” means a casino token that represents a right to be paid the amount stated on it.”
(3) In Schedule 1 to the Anti-terrorism, Crime and Security Act 2001 (forfeiture of terrorist cash), in paragraph 1 (meaning of terrorist cash)—
(a) after sub-paragraph (2)(e) insert—
(f) gaming vouchers,
(b) fixed-value casino tokens,”;
(b) after sub-paragraph (4) insert—
“(5) For the purposes of sub-paragraph (2)—
(a) “gaming voucher” means a voucher in physical form issued by a gaming machine within the meaning of the Gambling Act 2005 (see section 235 of that Act) that represents a right to be paid the amount stated on it;
(b) “fixed-value casino token” means a casino token that represents a right to be paid the amount stated on it.””—(Mr Wallace.)
This new clause provides for casino tokens and what are commonly referred to as “ticket in ticket out vouchers” to be treated as cash for the purposes of the civil recovery powers conferred by Chapter 3 of Part 5 of the Proceeds of Crime Act 2002 and by Schedule 1 to the Anti-terrorism, Crime and Security Act 2001.
Brought up, read the First and Second time, and added to the Bill.
New Clause 18
Forfeiture of terrorist cash
‘(1) Schedule 1 to the Anti-terrorism, Crime and Security Act 2001 (forfeiture of terrorist cash) is amended as follows.
(2) In paragraph 3 (detention of seized cash)—
(a) in sub-paragraph (2)(a), for “three” substitute “6”;
(b) after sub-paragraph (8) insert—
“(9) Where an application for an order under sub-paragraph (2) relates to cash seized under paragraph 2(2), the court, sheriff or justice may make the order if satisfied that—
(a) the condition in sub-paragraph (6), (7) or (8) is met in respect of part of the cash, and
(b) it is not reasonably practicable to detain only that part.”
(3) After paragraph 5 insert—
Part 2A
Forfeiture of terrorist cash without court order
Cash forfeiture notice
5A (1) This paragraph applies while any cash is detained in pursuance of an order under paragraph 3(2).
(2) A senior officer may give a notice for the purpose of forfeiting the cash or any part of it if satisfied that the cash or part is terrorist cash.
(3) A notice given under sub-paragraph (2) is referred to in this Schedule as a cash forfeiture notice.
(4) A cash forfeiture notice must—
(a) state the amount of cash in respect of which it is given,
(b) state when and where the cash was seized,
(c) confirm that the senior officer is satisfied as mentioned in sub-paragraph (2),
(d) specify a period for objecting to the proposed forfeiture and an address to which any objections must be sent, and
(e) explain that the cash will be forfeited unless an objection is received at that address within the period for objecting.
(5) The period for objecting must be at least 30 days starting with the day after the notice is given.
(6) The Secretary of State must by regulations made by statutory instrument make provision about how a cash forfeiture notice is to be given.
(7) The regulations may (amongst other things) provide—
(a) for a cash forfeiture notice to be given to such person or persons, and in such manner, as may be prescribed;
(b) for a cash forfeiture notice to be given by publication in such manner as may be prescribed;
(c) for circumstances in which, and the time at which, a cash forfeiture notice is to be treated as having been given.
(8) The regulations must ensure that where a cash forfeiture notice is given it is, if possible, given to every person to whom notice of an order under paragraph 3(2) in respect of the cash has been given.
(9) A statutory instrument containing regulations under this paragraph is subject to annulment in pursuance of a resolution of either House of Parliament.
(10) In this Part of this Schedule—
“senior officer” means—
(a) a senior police officer;
(b) an officer of Revenue and Customs of a rank designated by the Commissioners for Her Majesty’s Revenue and Customs as equivalent to that of a senior police officer;
(c) an immigration officer of a rank designated by the Secretary of State as equivalent to that of a senior police officer;
“senior police officer” means a police officer of at least the rank of superintendent.
Effect of cash forfeiture notice
5B (1) This paragraph applies if a cash forfeiture notice is given in respect of any cash.
(2) The cash is to be detained until—
(a) the cash is forfeited under this paragraph,
(b) the notice lapses under this paragraph, or
(c) the cash is released under a power conferred by this Schedule.
(3) If no objection is made within the period for objecting specified in the notice under paragraph 5A(4)(d), and the notice has not lapsed, the cash is forfeited (subject to paragraph 5D).
(4) If an objection is made within the period for objecting, the notice lapses.
(5) If an application is made for the forfeiture of the whole or any part of the cash under paragraph 6, the notice lapses.
(6) If the cash or any part of it is released under a power conferred by this Schedule, the notice lapses or (as the case may be) lapses in relation to that part.
(7) An objection may be made by anyone (whether a recipient of the notice or not).
(8) An objection means a written objection sent to the address specified in the notice; and an objection is made when it is received at the address.
(9) An objection does not prevent forfeiture of the cash under paragraph 6.
(10) Nothing in this paragraph affects the validity of an order under paragraph 3(2).
Detention following lapse of cash forfeiture notice
5C (1) This paragraph applies if—
(a) a cash forfeiture notice is given in respect of any cash,
(b) the notice lapses under paragraph 5B(4), and
(c) the period for which detention of the cash was authorised under paragraph 3(2) has expired.
(2) The cash may be detained for a further period of up to 48 hours (calculated in accordance with paragraph 3(1A)).
(3) But if within that period it is decided that neither of the applications mentioned in sub-paragraph (4) is to be made, the cash must be released.
(4) The applications are—
(a) an application for a further order under paragraph 3(2);
(b) an application for forfeiture of the cash under paragraph 6.
(5) If within that period an application is made for a further order under paragraph 3(2), the cash may be detained until the application is determined or otherwise disposed of.
Application to set aside forfeiture
5D (1) A person aggrieved by the forfeiture of cash in pursuance of paragraph 5B(3) may apply to a magistrates’ court or (in Scotland) the sheriff for an order setting aside the forfeiture of the cash or any part of it.
(2) The application must be made before the end of the period of 30 days starting with the day on which the period for objecting ended (“the 30-day period”).
(3) But the court or sheriff may give permission for an application to be made after the 30-day period has ended if the court or sheriff thinks that there are exceptional circumstances to explain why the applicant—
(a) failed to object to the forfeiture within the period for objecting, and
(b) failed to make an application within the 30-day period.
(4) On an application under this paragraph the court or sheriff must consider whether the cash to which the application relates could be forfeited under paragraph 6 (ignoring the forfeiture mentioned in sub-paragraph (1)).
(5) If the court or sheriff is satisfied that the cash to which the application relates or any part of it could not be forfeited under that paragraph the court or sheriff must set aside the forfeiture of that cash or part.
(6) Where the court or sheriff sets aside the forfeiture of any cash—
(a) the court or sheriff must order the release of that cash, and
(b) the cash is to be treated as never having been forfeited.
Release of cash subject to cash forfeiture notice
5E (1) This paragraph applies while any cash is detained under paragraph 5B or 5C.
(2) The person from whom the cash was seized may apply to a magistrates’ court or (in Scotland) the sheriff for the cash to be released.
(3) On an application under sub-paragraph (2), the court or sheriff may direct the release of the cash or any part of it if not satisfied that the cash to be released is terrorist cash.
(4) An authorised officer may release the cash or any part of it if satisfied that the detention of the cash to be released is no longer justified.
Application of cash forfeited under cash forfeiture notice
5F (1) Cash forfeited in pursuance of paragraph 5B(3), and any accrued interest on it—
(a) if first detained in pursuance of an order under paragraph 3(2) made by a magistrates’ court or a justice of the peace, is to be paid into the Consolidated Fund;
(b) if first detained in pursuance of an order under paragraph 3(2) made by the sheriff, is to be paid into the Scottish Consolidated Fund.
(2) But it is not to be paid in—
(a) before the end of the period within which an application under paragraph 5D may be made (ignoring the possibility of an application by virtue of paragraph 5D(3)), or
(b) if an application is made within that period, before the application is determined or otherwise disposed of.”
(4) In paragraph 7(4) (release of cash on appeal against decision in forfeiture proceedings), after “of” insert “the whole or any part of”.
(5) In paragraph 9 (victims), after sub-paragraph (3) insert—
“(4) If sub-paragraph (5) applies, the court or sheriff may order the cash to be released to the applicant or to the person from whom it was seized.
(5) This sub-paragraph applies where—
(a) the applicant is not the person from whom the cash claimed was seized,
(b) it appears to the court or sheriff that the cash belongs to the applicant,
(c) the court or sheriff is satisfied that the release condition is met in relation to the cash, and
(d) no objection to the making of an order under sub-paragraph (4) has been made by the person from whom the cash was seized.
(6) The release condition is met—
(a) in relation to cash detained under paragraph 3, if the conditions in that paragraph for the detention of the cash are no longer met,
(b) in relation to cash detained under paragraph 5B or 5C, if the cash is not terrorist cash, and
(c) in relation to cash detained pending the conclusion of proceedings in pursuance of an application under paragraph 6, if the court or sheriff decides not to make an order under that paragraph in relation to the cash.”
(6) In paragraph 19 (general interpretation), in sub-paragraph (1), at the appropriate places insert—
““cash forfeiture notice” has the meaning given by paragraph 5A(3),”;
““senior officer” (in Part 2A) has the meaning given by paragraph 5A(10),”.”—(Mr Wallace.)
This new clause makes various amendments of Schedule 1 to the Anti-terrorism, Crime and Security Act 2001 to bring it into line with the provision made by Chapter 3 of Part 5 of the Proceeds of Crime Act 2002, including amendments to provide for the forfeiture of “terrorist cash” by the giving of a forfeiture notice. This administrative forfeiture regime will apply throughout the UK; the equivalent regime under the 2002 Act is limited in its application to England and Wales and Northern Ireland.
Brought up, read the First and Second time, and added to the Bill.
New Clause 1
Review of Scottish Limited Partnership
“(1) The Secretary of State must undertake a review into the extent of financial criminal activity associated with Scottish Limited Partnerships, and lay a copy of the review before the House of Commons within six months of this Act receiving Royal Assent.
(2) In conducting the review the Secretary of State must consult—
(a) the Scottish Government;
(b) the National Crime Agency;
(c) the Serious Fraud Office;
(d) the Financial Conduct Authority;
(e) HMRC;
(f) interested third sector organisations; and
(g) any other persons he deems relevant.
(3) The review must set out what steps the Government intends to take to prevent Scottish Limited Partnerships being used for criminal purposes.”—(Roger Mullin.)
This new clause would require the Secretary of State to conduct a review of financial criminality associated with Scottish Limited Partnerships and set out what steps the Government intends to take to prevent Scottish Limited Partnerships being used for criminal purposes.
Brought up, and read the First time.
Roger Mullin (Kirkcaldy and Cowdenbeath) (SNP)
I beg to move, That the clause be read a Second time.
It is a great pleasure to serve under your chairmanship, Mrs Main. Before I go into the substance of the new clause, I place on the record our thanks to the Minister for his willingness to discuss the issue with us both before and after Second Reading. Although I am a relatively new Member of Parliament, this is the fifth Bill Committee on which I have served in just over a year, and this is the most listening Minister I have come across. I would like to acknowledge that.
Roger Mullin
Yes, this is the gentle dagger.
I rehearsed on Second Reading many of the specific instances of abuse using Scottish limited partnerships. I do not intend at this moment to repeat all that, but for the Minister’s benefit, I would like to add to what has already been said.
First, we have had further discussions with the Law Society of Scotland and others. They indicate a willingness to assist us in moving forward to address what the solutions may be to Scottish limited partnerships. I have also had discussions with an individual who was named in evidence to us, Mr Richard Smith, who has undertaken a lot of research into this matter. He, too, has indicated a willingness to assist.
Why do we consider that a review is needed? A lot of research has been undertaken, including by Mr David Leask, who gave evidence to the Committee just last week. However, in our view, before the Government move towards precisely how they will take action to secure SLPs from abuse in the future, it would do us a lot of good if we conducted a detailed review, sponsored by the Government, to ensure that all forms of abuse are properly understood. It would be good to do that before we move towards saying what the precise solutions will be. Therefore, it would be valuable if the Minister, when he comments on the new clause, indicates whether he thinks there is still scope for the Government to consider a detailed review such as that which we have discussed.
I shall conclude now and allow the Minister to respond. Our hope is that the response will be such that there will be no need for us to push the new clause to a vote.
Mr Wallace
I thank the hon. Gentleman for his kind words. As the son of a Fifer, I know that one always does well to listen to a Fifer—or one faces the consequences.
I am also grateful to the Scottish National party and The Herald newspaper for raising this issue. It is a genuine issue of abuse, as they have rightly pointed out. We have taken important steps to prevent the misuse of corporations for money laundering, corruption and tax evasion. The UK’s public register of company beneficial ownership went live this year—we were the first G20 country to put such a register in place. At the London anti-corruption summit, we committed to going further and creating a register of the beneficial ownership of foreign companies that own real property or wish to be involved in public sector procurement contracts in the UK.
However, we must not be complacent. Hon. Members have rightly raised the issue of Scottish limited partnerships a number of times. I hope they are assured that I take it very seriously. The stories in The Herald and the intelligence assessments that I have received from our law enforcement agencies are very concerning.
As I committed to do on Second Reading, I have spoken on this subject to the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Stourbridge (Margot James), who is responsible for small business, consumers and corporate responsibility, and she shares my concerns about the abuse of SLPs. We agreed that we need to get the balance right between ensuring that the UK remains a good place to do business for the law abiding and cracking down on abuse. Her Department recently published a discussion paper that invites views on a number of questions about transposing corporate transparency requirements under the fourth anti-money laundering directive. The catchy name is “Implementation of the Fourth Money Laundering Directive—Discussion paper on the transposition of Article 30: beneficial ownership of corporate and other legal entities”.
Mr Wallace
I can repeat it for those who want to write it down. That was launched on 3 November. I think that it is a six-week consultation. As a starting point, I strongly urge the Scottish National party to make a submission.
Roger Mullin
We are aware of that consultation with a snappy title, and it is our understanding that, appropriately, submissions have to be in by St Andrew’s day— 30 November. We intend to make a submission.
Mr Wallace
One issue raised in the paper is whether SLPs should be brought within the scope of the directive by including them on the UK’s public company beneficial ownership register, which would go some way to revealing the people behind some of those arrangements. The Government propose that SLPs should be on the register, although we must wait to see the responses to the consultation before we make a final decision. Hopefully my office will be in touch with hon. Members to arrange a meeting to discuss both that and some of the other issues they have raised.
New clause 1 proposes a statutory review of SLPs. The existing discussion paper already provides for interested parties to submit their views on identifying the beneficial owners of SLPs, which is a good first step. I reassure hon. Members that officials and Ministers in multiple Departments are looking closely at the wider issues related to SLPs, and I hope we will have more to say about that on Report. For now, I hope the hon. Gentleman feels suitably encouraged to withdraw his new clause.
Roger Mullin
I thank the Minister for his encouraging response. I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 2
National Crime Agency: Report on staff training
“Section 3 of the Proceeds of Crime Act 2002 is amended as follows, after subsection (7) insert—
‘(8) The National Crime Agency must make an annual report to Parliament on the provision of training to persons under this section.’”.—(Dr Huq.)
This new clause would require the National Crime Agency to make a report to Parliament about the training it provides to its staff in financial investigation and the operation of the Proceeds of Crime Act.
Brought up, and read the First time.
The Chair
With this it will be convenient to discuss
New clause 5—Accredited financial investigators: Recovery of training costs—
“(1) The Secretary of State shall have a duty to work with enforcement authorities to ensure that enforcement authorities have in place training cost agreements with staff who are trained by the enforcement authority to be accredited financial investigators.
(2) For the purposes of this section
“Enforcement authority” has the same meaning as in section 362A(7) of the Proceeds of Crime Act 2002
“training costs agreement” means an agreement requiring an employee who has been trained as an accredited financial investigator to repay the cost of their training if they voluntarily leave the employment of the enforcement authority within 3 years of their training being completed.
“accredited financial investigators” has the same meaning as in section 47A(2) of the Proceeds of Crime Act 2002.”.
This new clause would place a duty on the Secretary of State to work with enforcement agencies to ensure that the agencies have appropriate HR arrangements in place to recover the costs of training accredited financial investigators where the AFI leaves the employment of the agency within 3 years of completing their training.
Dr Huq
New clause 2 would ensure that the National Crime Agency makes an annual report to Parliament on the training it provides to enforcement agency staff who are defined under both this Bill and the Proceeds of Crime Act 2002 as having the power to exercise civil recovery proceedings. We selected the National Crime Agency to be subject to the proposed duty because it is the sole body responsible for the training of other enforcement agencies with such powers under POCA.
Our main reason for wanting to introduce a duty on the National Crime Agency to make an annual report is that new clause 2 is nothing new. All this stuff was in the two influential Select Committee reports—the report by the Select Committee on Home Affairs on the proceeds of crime, and the report by the Public Accounts Committee. The report by the Home Affairs Committee showed that there is a lack of understanding at enforcement level regarding confiscation orders. There is sometimes confusion about where the buck stops.
The Home Affairs Committee report makes it clear that that misunderstanding is manifested in a number of ways, and I will give two quick examples. Some enforcement staff are not aware of their power to exercise civil recovery procedures and/or actions to that end, and confiscation orders are regularly not factored in at the beginning of criminal investigations—that is on page 13 of the report. The Home Affairs Committee alleges that, as a result, criminals regularly have time to hide their assets and that that has contributed to the poor recovery rate of confiscation orders. We know there is a lot wrong with those orders and that a lot of money falls through the cracks. According to the Committee report, as of last year there was a total of £1.6 billion in outstanding debt from confiscation orders.
The Public Accounts Committee also recently reported that administering the orders costs £100 million, yet £175 million was recovered through the orders last year. I am not arguing that that is solely down to staff training or a lack of knowledge among the staff, but the Home Affairs Committee report makes it clear that a number of causal factors contribute to the poor rate of recovery. Those factors include, but are not limited to, the overworked ELMER IT system for suspicious activity reports. My right hon. Friend the Member for Leicester East eloquently mentioned that several times in the debate on the Floor of the House. The creaking IT system is overloaded and overworked as it is. I cannot account for where he is now, but I am sure that he will be there when needed. That is one factor. There is also a reluctance among barristers and judges to specialise in asset recovery law, as the Home Affairs Committee report also mentioned. Arguably, there is a lack of specialist confiscation courts.
Obviously, we are not arguing that the amendment would suddenly wave a magic wand to remedy those problems, but building in the audit mechanism through an annual report would allow us to identify weaknesses in the context of training provided by the National Crime Agency. One problem contributing to the poor recovery rate for confiscation orders, as I mentioned earlier, is that they are not factored into the very beginning of criminal procedures. The Minister talked about behaviours. If there were a regular report, we could identify similar behaviours and remedy the problem. In theory, we would increase the rate of recovery. To that end, Labour see the duty to report as being a cost-effective performance enhancer. There is nothing quite like the fear of having to make a statement that must be relayed on the Floor of the House orally or in writing or both, and it would focus the mind on the tasks at hand.
Regular reporting would allow Parliament to assess in real time the necessity of adjusting NCA training—that form of crime and the techniques underpinning it change in real time. Since the Proceeds of Crime Act 2000, 16 years ago, we have seen technology change how such evil crimes are effected—hopefully, they are ineffective. To that end, I draw Members’ attention to the debate on whether NCA training should be mainstreamed or extended to new enforcement agencies. Detective Superintendent Clark, head of the economic crime directorate at the City of London Police, has been positive about the idea of mainstreaming National Crime Agency training, so that some of it can be taken over. That is on page 9 of the Home Affairs Committee report.
That level of detail may be for another day, but the point I am trying to make is that regular reports to Government would allow the House to keep a closer eye on the quality and quantity of training provided. The reports could then be factored into more well-informed discussions at a later date about things such as mainstreaming training. Whether or not we are now living in an age of austerity, everyone in this House wants best value for money from our public services, particularly when budgets are tight. When it comes to underperforming services, we can all agree that making institutional or procedural change, rather than just throwing money around in an unfocused way, can help to drive up standards. I believe that regular, up-to-date, detailed reports would provide this and future Governments with the ability to make such changes.
The amendment is not intended to be political; it is technical. I know that the Minister is a reasonable man, and I think that he will agree that it is fair and reasoned. Everyone in the House appreciates the great work done by the NCA on our behalf, but it is only fair that we monitor and have an up-to-date understanding of the training that it provides.
Dr Huq
Yes. New clause 5 is simple and does what it says on the tin. We want the Secretary of State to work with the enforcement agencies, using accredited financial investigators, to hammer out some form of agreement whereby if an accredited financial investigator chooses to leave his post within the first three years of qualifying as an AFI, they must repay the cost of training before doing so. There are some figures.
Mr Wallace
The Government recognise the importance of ensuring that investigation and prosecution agencies have sufficient expertise and resources to carry out their functions under the Proceeds of Crime Act 2002. Section 3 of the Act places a statutory duty on the National Crime Agency to provide a system for the accreditation of financial investigators who use the powers under POCA. This is done through the National Crime Agency’s Proceeds of Crime Centre. The accreditation system includes provision for monitoring performance and, importantly, accreditation can be removed from an investigator who fails to meet the accreditation standards.
The training can be lengthy and expensive. The Home Affairs Committee, during its recent inquiry into asset recovery, identified the risk of the private sector poaching trained resources with the promise of better pay and benefits. It was a good report. I read it in full as well as the Public Accounts Committee report.
The NCA already publishes statistics on the training activities undertaken by the Proceeds of Crime Centre in its annual report. Their last report showed the delivery of 95 training courses, support for 760 delegates through that training, and the completion of 1,400 registrations and re-accreditations. Those statistics are already published annually.
New clause 5 provides for the use of agreements to tie accredited financial investigators to their agencies, so that they would pay the cost of their training if they voluntarily left the employment of the agency that has funded their training. However, these agencies have tried such agreements and found them difficult and costly to enforce. In most cases, the benefits of such agreements are minimal.
Even if an effective and enforceable form of cost training agreement could be found—I do not want to dismiss the idea out of hand today—making it a requirement in primary legislation would not be appropriate. The operational agencies who use financial investigators should be given the freedom to manage their workforce according to their needs.
In line with the hon. Lady’s concerns, the criminal finance board, which I chair with my hon. Friend the Economic Secretary to the Treasury, commissioned a working group to examine the retention and training of financial investigators. It has not gone away or been swept under the carpet; I assure hon. Members that nothing is swept under the carpet in my Department. There is no conspiracy either—we do not do conspiracies in my Department; we are the conspiracy, according to some. That group is also considering what actions can be taken to incentivise investigators to stay and develop their career within the public sector.
The hon. Lady also referred to ELMER—the database of the suspicious activity reports IT regime. We have committed to replacing the SARs IT regime by October ’18, but in the meantime we have taken steps to upgrade and maintain it as part of the SARs reform package. We have not finished reforming the SARs programme, and before we roll out a new system we need to know what the new suspicious activity reports will look like, because if we are going to have a software database in order to cope with that effectively, we need to know what we are planning to cope with.
I am therefore alive to the issues and will be following the issues raised by the right hon. Member for Leicester East. I will visit to look at the system directly; I will have to bring my 1980s computer knowledge up to date to see whether I can remotely understand what I am looking at. I will certainly make sure that it is on because, like the hon. Member for Ealing Central and Acton, it is not my or the Government’s intention for the system to grind to a halt. It is very important.
It is also important that we register that we are keen to make sure that all those people who benefit from that system—not just the Government but the banks and the other people who use it—perhaps make a contribution towards the new system. That is important. It is for their benefit as well for the system to work successfully and efficiently.
I hope that demonstrates to the hon. Lady that I take both matters seriously. I think the training has already been dealt with, because it is published in the National Crime Agency’s annual report. I hope she is inclined to withdraw her motion on that basis.
Dr Huq
I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 3
Annual reporting: Adequacy of resources
“(1) In Part 12 of the Proceeds of Crime Act 2002 (miscellaneous and general), after section 455, insert—
“455A Annual reports on resources
(1) A relevant authority must, no later than 1 June in each calendar year, prepare an annual report on the adequacy of the resources available from money voted by Parliament for the exercise of any functions of that authority—
(a) under this Act;
(b) in connection with investigations into terrorist financing offences under the Terrorism Act 2000;
(c) under Part 3 of the Criminal Finances Act 2017.
(2) In this section, “a relevant authority” means—
(a) the National Crime Agency;
(b) the Director of Public Prosecutions;
(c) the Director of the Serious Fraud Office, and
(d) Her Majesty’s Revenue and Customs.
(3) The reports prepared in accordance with subsection (1) shall be sent—
(a) in the case of the National Crime Agency, to the Secretary of State;
(b) in the case of the Director of Public Prosecutions and the Director of the Serious Fraud Office, to the Attorney General, and
(c) in the case of Her Majesty’s Revenue and Customs, to the Chancellor of the Exchequer.
(4) The person receiving annual reports in accordance with subsection (3) must lay those reports before each House of Parliament in the form in which they were received no later than 30 June in the same calendar year, together with a statement on plans for future resources to be provided from money voted by Parliament.”.”.—(Peter Dowd.)
This new clause would require the National Crime Agency and other agencies to report annually to Parliament on the adequacy of its resource to fulfil its functions relating to combating financial crime.
Brought up, and read the First time.
Peter Dowd
I beg to move, That the clause be read a Second time.
This is not a technical clause. It goes to the heart of transparency of resources for the enforcement agencies concerned. It is crucial that they are adequately funded, given the nature of the task that they are dealing with. They are chasing billions of pounds of evaded tax in relation to crime, with a particular emphasis on concerns around terrorism, and it is therefore perfectly legitimate for Parliament to be directly reported to on the adequacy of resources. That is the starting pitch.
In the evidence session, I, along with other Members, in particular the hon. Member for Portsmouth South, as I recall, asked many questions of witnesses about the resources available to law enforcement agencies. To Detective Superintendent Harman, who heads the national terrorist financial investigation unit at the Met, the hon. Lady asked:
“Are you confident that the enforcement agencies will have sufficient resources to make full use of the new powers in the Bill?”––[Official Report, Criminal Finances Public Bill Committee, 15 November 2016; c. 9, Q8.]
“Yes” was the response from the police officer and the witness accompanying him. I have to say, it is a pleasure to have the police helping us with our inquiries, rather than the other way around.
Clearly, the adequacy of resources goes to the heart of the ability of enforcement agencies to stamp out and tackle abuse within the financial sectors, particularly that which is linked to crime and terrorism. It is self-evident that, if the resources are not there, or if they are not used forensically and wisely, the agencies concerned will certainly not fulfil the intention of the Bill. It is worth reminding hon. Members of the intention of the Bill, as set out in the explanatory notes—I alluded to this in the evidence sessions last week—namely,
“to give law enforcement agencies, and partners, the capabilities and powers to recover the proceeds of crime, tackle money laundering and corruption, and counter terrorist financing.”
It is fair to say the Government could not be any more plain on this matter. The measure is, after all, the Criminal Finances Bill, so the clue is in the title. Given that we all agree with the Government’s intention as set out in the overview of the Bill—in the section relating to its mission—it is incumbent upon us to establish whether the resources are available to effect that good and laudable intention, notwithstanding the view expressed by the superintendent and his colleagues that they felt that they had enough money.
One way of holding the Government to account is to ensure that those intentions are backed up with the wherewithal to carry them out through a parliamentary annual review, given the crucial nature of these issues. All those who were asked about the adequacy of the resources to do the job agreed that the intention of the Bill was sound, and I do not dispute that. However, aside from the enforcement agencies themselves, which felt that they had enough to do the job—I am not sure whether that was in hope rather than in expectation—it is fair to say that most of the other witnesses’ enthusiasm for that element of the equation was not quite as clear-cut, although I would stand corrected and am challengeable on that.
For illustration purposes, Members may recall that when I asked the witnesses representing the Centre for Financial Crime and Security Studies at the Royal United Services Institute, Corruption Watch, Global Witness and Transparency International a question about whether they felt that—in their experience—the resources were available to do the job, there was a bit of a tumbleweed moment, with sideways looks at one another. I read the clear body language—and you do not have to be an experienced psychologist to have spotted it—that in their experience they felt that there clearly were not enough resources, and that they felt that that would hinder the enforcement agencies in doing their job. In response to the question from my hon. Friend for Ealing Central and Acton about the adequacy of resources, the director of the Centre for Financial Crime and Security Studies Mr Keatinge said:
“Resourcing is clearly a major issue. Cynically, one of the reasons for involving the private sector is to harness it to do some of the work…I do not believe we have the resources that we need.” ––[Official Report, Criminal Finances Public Bill Committee, 15 November 2016; c. 69-70, Q150.]
I accept that that is a view, but it is a view that has been reached after asking expert witnesses. We at least have to listen to them and take on board some of the concerns that they had. Moreover, when I followed up with the representative from the Metropolitan Police Authority, the National Crime Agency and the National Police Chiefs Council earlier the response to the hon. Member for Portsmouth South, I felt that they had begun to row back a little on their unequivocal answer to the hon. Lady.
That is why it is paramount that the professionals, and those whose day to day job is to tackle financial crime adequately, are adequately equipped with the resources to do the job. That is why we have to challenge them, and it is our responsibility to challenge them. In a sense, it is Parliament’s responsibility to challenge the Government and the Executive, and one of the best ways of doing that is for the information to be reported directly, rather than articulated through some sort of pontifical process to Parliament. I can inform Members now—I do not think I have to, but I will—that the people the law enforcement agencies are trying to catch are ahead of the game in relation to the crimes that they are committing, and we need to ensure that the enforcement agencies have the resources to do the job.
A clear example of where annual reporting would be effective is in the oversight of the IT system for SARs, which I know the Minister has referred to as being revamped or changed. As far as I am aware, ELMER is designed to process up to 20,000 suspicious activity reports; it is currently processing up to 381,000 of them. Of those, only 15,000 are looked at in detail, as was noted in the Home Affairs Committee’s fifth report of the 2016-17 Session, “Proceeds of crime”. That raises the question of whether reporting that many SARs is simply over the top, and borne out of caution on the part of banks. If so, then that approach wastes a good deal of time for those doing the reporting, and for the receiving agencies, who have to search through the haystack. Alternatively, if the reporting numbers are, to all intents and purposes, a reasonable reflection of concern that has reached a mutually agreed threshold, that raises another question: why are so many reports being ignored, brushed aside or not acted on? The Minister has reassured us that they are not under his office carpet.
Mr Wallace
In my response to the hon. Member for Ealing Central and Acton on new clauses 2 and 5, I explained what we are doing to assess the capacity and capability of investigator resource. The new tools in the Bill are a key part of strengthening our response to economic crime. The Government continue to invest in law enforcement agencies through the asset recovery incentivisation scheme, which returns recovered assets back to the frontline. A top-slice of £5 million has been set aside every year until the end of this Parliament to fund key national asset recovery capabilities, and I can announce today that we are going further. We made a manifesto commitment to return a greater percentage of recovered assets to policing, and we are implementing that commitment by investing in policing the whole Home Office share of amounts above a certain baseline collected by the multi-agency regional asset recovery teams. That will give the agencies greater financial resources, if performance continues to increase—100% of the Home Office share, rather than the 50% that they currently get. There we are: an announcement in a Bill Committee—a new way of venturing forward.
Let us be honest: I say to the hon. Member for Bootle that in Government, we never have enough resources across all our priorities, because different priorities are preyed on by events such as flooding in the west of England, or issues for the Home Office such as a surge in terrorism. I therefore question the use of the word “adequacy” in the new clause. We can scrutinise accounts or budgets, but asking a police officer whether he feels he has enough is like asking, “How long is a piece of string?” Of course we never have enough for crime fighting across the country. If I had millions of pounds, I could find things to spend that money on immediately, and so could every Member in this Committee Room.
I am concerned about whether it would be right and fair to publish a report to Parliament, as the new clause demands. The agencies that use their powers under the Proceeds of Crime Act already report on their resources and results through the departmental annual accounts, which are subject to scrutiny from the National Audit Office and the Public Accounts Committee. The use of criminal justice tools and powers is also subject to scrutiny by Her Majesty’s inspectorate of constabulary and, in the case of terrorism legislation, by the independent reviewer of terrorism legislation. The criminal finances board also closely monitors performance and resourcing issues. I hope that the hon. Members for Ealing Central and Acton, and for Bootle, can see that there is already significant scrutiny of resourcing. I invite the hon. Member for Ealing Central and Acton to withdraw the motion.
Dr Huq
I was interested to hear a groundbreaking announcement in this Committee. I completely get the Minister’s point that we will never feel satiated, and that there will always be inadequacy, but my hon. Friend the Member for Bootle made a really powerful case. He mentioned SARs and the ELMER IT regime. Originally, 20,000 SARs were anticipated, but there are now 381,882—my hon. Friend said there were “up to” 381,000 of them, but there are even more, and the figure is rising.
I want to mention the NCA’s ability to cope with the greater workload. It takes an increasing length of time to get investigations into the courts. We have heard that it could take more than 200 days, with the new SARs regime. The NCA was created as a successor to several different organisations. The budget of those it replaced was £812 million, but the NCA’s new annual budget was £474 million. Those figures put the situation into context. The Government have cut that budget even further since the NCA’s creation; it received £411 million in 2015-16. I accept that there was a one-off £200 million cash injection last year, but the agency needs steady long-term funding to carry out its functions effectively. It is no good just sprinkling blockbuster sums now and then; it needs a consistent funding model.
My hon. Friend the Member for Bootle made some powerful points. For effective crime fighting, we should not have agencies that are overworked and under-resourced. The announcement that 100% of assets will go to the Home Office conflicts with an amendment that we have tabled.
Mr Wallace
Not the Home Office; it is going to the law-enforcement agencies.
Dr Huq
Okay, so it is within the system. We have tabled new clause 20, which is about repatriating assets to the jurisdictions they came from. Some charities—Christian Aid and all those people—are saying that third-world health budgets get robbed when someone buys a house in Hampstead with such proceeds. Are we going to—
Richard Arkless
I would like to make a very small point about the Minister’s comments on new clause 3. He rightly suggests that if we were to ask any police officer or public servant whether they had enough resources, the answer would clearly always be no, but the new clause does not seem like a generic question about whether there is enough generally. The hon. Member for Bootle is asking whether adequate resources are available for specific functions to be exercised under the Proceeds of Crime Act 2002. That is a marked departure from asking any Department the generic question, “Have you got enough, guv?”, to which we would almost certainly know the answer. The new clause is about activities undertaken under the Act, and I do not think it is fair to categorise the suggestion as the Minister did.
Mr Wallace
Perhaps I can clarify some of the issues. Obviously the word “adequate” is subjective. We heard evidence in Committee from members of the law enforcement agencies, and they did use the word “enough”. My point is that we scrutinise the accounts in this place, and then compare that with agencies’ performance and outcomes. That is how we come to a decision—subjective, often—on whether there are adequate resources. It is not necessary to put that in primary legislation.
Perhaps I could clarify for the hon. Member for Ealing Central and Acton the issues around asset recovery and where those funds go. At the moment, if we recover assets from drug dealers, for example, the money is split, with 50% going to the Home Office, and 50% to the Crown Prosecution Service and all the other agencies—the National Crime Agency or the police—involved in that operation, so that they can invest it in their capabilities, and use it to increase their ability to fight crime. I can say today that further to our manifesto commitment, in future, instead of having that 50% of the cake, they will be able to keep 100% of the amount coming in above the baseline, which was set in 2015, if I am not mistaken. They have a very strong incentive to ensure that they are rewarded for their good work, and to make sure that we go after big sums as well as small. That is important.
On the point the hon. Lady raised about returning money that is stolen—we will come back to this—we sent back £27 million to Macau recently. Where we identify the ownership of stolen assets that we can return to a foreign country or wherever, we will, and we have already done that. My colleague the Minister for Immigration signed a memorandum of understanding with the Nigerian Government in August to make it even easier for us to return stolen property or assets to a country’s people. It is absolutely our intention to do that.
Across the money laundering piece, we can identify the owners of certain assets and take steps to return them. Other assets that accrue because of the high margins in the illicit trade of, say, drugs may be harder to return. In fact, the people who contributed to those sums may have committed a crime themselves, so there is a difference there. I recently saw in Mombasa some confiscated stuff that we will be returning, as soon as we can get through the paperwork. It is not our intention to divvy up the proceeds from the house in Knightsbridge and hand them all over to the National Crime Agency, and rob the third country from which the money was stolen.
Mr Wallace
No. As I said earlier, we have spent money updating and making sure that ELMER is maintained, but we are also in the process of drawing up a SAR reform policy. There are a number of reasons why there are so many referrals—380,000-odd—but the Bill will hopefully cut that number. We want quality, not quantity. At the moment, we are getting quantity, partly because in the suspicious activity regime, if a body makes the report, its defence is halfway there—that is the tick-box bit that is highlighted in the report. Also, many institutions currently report a fragment of the transactions, because they say that they are unable to report the complete transaction due to data-sharing barriers. That is why this Bill removes those barriers. Hopefully, instead of 15 pieces of a transaction being reported as 15 separate SARs, we will get one, because one institution will be able to report the transaction from beginning to end.
We are already taking steps to reduce demand on the system. The system is working; people should not think it has stopped working. The challenge is the analysis, and making sure that we act on the suspicious reports and are quick enough to discard the ones that are not, because we want quality, not quantity.
This time last year, we agreed a £200 million capital improvement budget for the National Crime Agency between 2016 and 2020. That is a huge sum of money for it to spend on a whole range of capital projects to bring them up-to-date. We all have lessons to learn—Labour Governments and Conservative Governments—from rushing into IT replacement projects that cost much more than anyone envisaged. It is therefore important we get the new SARs regime right before we replace the system. I assure hon. Members that that is at the forefront of my mind. We are not going to fall over—that is the main thing—and we will make sure that when we replace it, we do so with the right system, so that we are not all back in this Committee Room in a few years’ time saying, “The SARs regime is not working.” I hope that clarifies the point for the hon. Member for Ealing Central and Acton.
Peter Dowd
I started by talking about Parliament being able to have reports from the agencies concerned, given the seriousness of the issue facing us. The Minister, reasonably, told us that 100% of the proceeds will go to the appropriate agencies and be divvied up as appropriate. I completely accept that, in good faith, and repeat the point made earlier: that he is a reasonable man. I do not challenge the Minister’s reasonableness; my challenge is based on the fact that Parliament, given the nature of this issue, is perfectly entitled to receive reports from agencies—no doubt articulated through the Departments in some fashion—on their resources. A definition of “adequacy” is that something is proportionate, or sufficient for its purpose. That is a matter for Parliament to discuss. It will not necessarily be able to do anything other than discuss it, but the discussion may produce views and experiences for the Minister to consider.
As to the Minister’s point that this is not something to go into primary legislation, about this time last year I was on the Committee that for 17 sittings considered the Housing and Planning Bill. There were all sorts of things in that Bill far less important to the health and integrity of the nation. Indeed, in the past, local government Acts—primary legislation—have even included provisions on how many hours off a person in one local authority can have, compared with a person in another. Primary legislation can be used in a range of ways. It is for the Government of the day to say, “We have nothing to fear from the reports coming before Parliament, from openness and transparency, or from challenge.”
Mr Wallace
Anyone who is a victim of financial crime takes that crime incredibly seriously; the same goes for victims of violent crime. The National Crime Agency has a number of threats to deal with, including drugs, firearms, child sexual exploitation, financial crime and foreign national offenders. Our police forces deal with a range of threats. Are we to say, on the principle that the hon. Gentleman has set out, that primary legislation should require our law enforcement agencies to produce a report every year, under each heading across the whole range of crime, on whether they believe they have adequate funding to do their job? If so, I envisage that our law enforcement agencies will be full of people doing reports all year, arguing about whether resourcing is “adequate”, and submitting them to Parliament, rather than getting on and prosecuting the people we need prosecuted.
Peter Dowd
That is a fair point, but we know that, every day, Parliament debates issues that are far less important for the body politic, security and the safety of the country. The point that I am trying to make is that the issue is of great importance and significance. It is so different in degree as to be different in kind. My hon. Friends and I therefore say that Parliament should have this opportunity. This is not a technical proposal. I repeat that, given the nature of the threat to the country, and the importance that people place on the safety of the country, we would like the report to be made to Parliament.
Question put, That the clause be read a Second time.
Peter Dowd
I beg to move, That the clause be read a Second time.
The new clause would create a corporate offence of failing to prevent financial crime. It would compel the financial services industry to take greater steps to stamp out financial crime, and to tackle tax evasion and other economic crimes. At the heart of the new clause is the need for a level playing field, and to end the impunity that many large global organisations have enjoyed, whereby directors have plausible deniability if they are not involved in decisions taken at a lower level by employees.
The 2015 Conservative party manifesto stated:
“We are...making it a crime if companies fail to put in place measures to stop economic crime, such as tax evasion, in their organisations and making sure that the penalties are large enough to punish and deter.”
At the UK anti-corruption summit on 12 May this year, the Government announced that the Ministry of Justice would consult on an extension of
“the criminal offence of a corporate ‘failing to prevent’ beyond bribery and tax evasion to other economic crimes.”
They acknowledged that law enforcement struggles
“to prosecute corporations for money laundering, false accounting, and fraud under existing common laws.”
As far as I am aware, no consultation has been announced; it appears that the consultation is likely to have been downgraded to a call for evidence, bringing further delay and sending the wrong message.
The Opposition are always willing to assist the Government where it is sensible and in the interests of the country to do so. The new clause would enable the Government to fulfil their manifesto promise, which I know is dear to the hearts of every Government Member; I know that they recite the manifesto with catechistic fervour before, during and after meetings of the 1922 committee. The Minister will sleep easier knowing that he has delivered his part of the schedule ahead of time. I expect Government Members will want to fulfil the UK summit’s commitment before the parliamentary calendar becomes clogged up with Brexit-related measures. The Prime Minister has promised to deliver an economy in which everybody plays by the same rules.
UK corporate liability laws rely on a “directing mind” test, which requires prosecutors to prove that senior board level executives intended misconduct to occur. This moves the focus of attention away from the bigger fishes, and on to small and medium-sized enterprises, where directors are more involved and can therefore be more easily prosecuted—quite rightly, if appropriate. This was a concern of some of the witnesses. The system undermines corporate governance by creating perverse incentives to keep boards in the dark about decisions that may lead to misconduct. Several recent major scandals, including LIBOR and Euribor, have resulted in no prosecutions against companies owing to the current corporate liability regime.
Where individuals have been prosecuted under conspiracy to defraud, they have argued that their actions were condoned and encouraged by their employers. However, the Serious Fraud Office has not charged any of the employers concerned, which include Barclays, UBS and Deutsche Bank, and not a single UK financial institution faced criminal charges as a result of the 2008 financial crisis. A “failure to prevent” offence for fraud and conspiracy to defraud would have enabled such prosecutions. Similarly, in 2015 the SFO was forced to drop its case against Olympus after the Court of Appeal found that it was not illegal under current corporate liability laws for companies to mislead their auditors. This was also the case in 2015, when the CPS stated that because of corporate liability laws, it could not mount a successful prosecution against the companies in the phone hacking scandal, which included some of the largest tabloid newspapers in the UK. Although the new clause would not specifically address the phone hacking case, it highlights the urgent need for broader corporate liability reform.
The Government also need to tackle the facilitators of corruption.
Criminal Finances Bill (Sixth sitting)
Tuesday 22nd November 2016
(8 years, 1 month 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 22 November 2016 - (22 Nov 2016)
The Committee divided: - Ayes: 7 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 8 - Question accordingly negatived.
Peter Dowd (Bootle) (Lab)
This morning I was indicating that the Government also need to tackle the facilitators of corruption—by that, I mean those institutions that fail to conduct due diligence on their clients. The UK anti-corruption summit committed countries to pursuing and punishing those who facilitate corruption, and the new clause reaffirms Britain’s commitment to do so.
The failure to include such measures in the Bill will lead to many of our partners accusing us of hypocrisy and double standards; it will severely damage our prestige abroad, or will have the potential to damage our prestige abroad; and it will undermine our reputation. I find it perplexing, as do many others, that not a single bank has yet been criminally prosecuted for handling the proceeds of corruption, despite the fact that they may have been fined for doing so. This is not just about banks, but about some of the people in the banks—that is the important thing to take away. My constituency is similar to those of other Members, in that as well as having lots of local branches, Santander has 2,000 people based there. I am certainly not in the business of pointing the finger at everybody in the banking sector—it is important to make that point.
In March 2012, Coutts was fined £8.75 million by the Financial Conduct Authority for serious systemic failings that resulted in “an unacceptable risk” that Coutts had handled the proceeds of crime, yet despite that fine, in April 2016 Swiss authorities investigated whether money from the 1Malaysia Development Berhad scandal had ended up in Coutts’ bank accounts, which suggests that regulatory action alone is an insufficient deterrent against laundering corrupt proceeds. From that instance, it is clear that an extension of a failure to prevent money laundering offence would significantly enhance the scope for criminal sanctions.
We should not forget that the cost of fraud and money laundering greatly exceeds the cost of tax evasion. In 2016, Her Majesty’s Revenue and Customs estimated the tax gap to be £36 billion, of which tax evasion accounted for £5.2 billion. Some witnesses last week believed it to be higher. In May 2016 the annual fraud indicator put the cost of fraud to the UK economy at £193 billion. The cost to the public sector is £37.5 billion, with procurement fraud costing as much as £10.5 billion a year. We are talking about significant figures, which is why we need significant action. I am pleased that the Government are taking significant action but we want to push them further. The National Crime Agency estimates that billions of pounds of suspected proceeds of crime are laundered through the UK every year. That money, if accounted for, would be more than enough to help fund a whole range of services in the country.
The Crime and Courts Act 2013 specifies that certain economic crimes, which include fraud, money laundering and false accounting, as well as bribery and tax evasion, can be dealt with by way of a deferred prosecution agreement. The absence of an extension to a failure-to-prevent offence to the other economic crime offences listed in the Act results in a disparity in how different economic crimes, which all cause significant damage to the taxpayer, can be dealt with by prosecutors.
New clause 6 would also improve corporate governance. Companies are already subject to criminal law for all the additional offences listed in the amendment, although currently on the basis of the “directing mind” test. In addition, companies are required under FCA regulations to have effective systems and controls in place to prevent themselves being used to further financial crime, including money laundering.
At the end of the day, we are trying to get the message across to the Government. Mostly, in broad terms and in specific situations, the Government have got that message, but it is the duty of the Opposition to push the boundary a bit more where we feel that the Government have not acted as forcefully as they could, in the light of what I have just said about scale, and in the light of the comments we heard from our witnesses last week.
Richard Arkless (Dumfries and Galloway) (SNP)
We broadly support new clause 6, tabled by the Opposition, which seeks to extend corporate financial crime beyond the provisions in the Bill as drafted—beyond tax evasion and bribery. We are generally supportive. It is worth mentioning the point made by the hon. Gentleman that the provisions in new clause 6(4) defining a criminal financial offence are at the moment corporate offences that require the directing mind to be present. To my mind, the new clause would merely remove the directing mind provision from those offences.
We broadly support the new clause, but I question subsection (2)(b), which states that a defence could be that
“it was not reasonable in all the circumstances to expect B to have any prevention procedures in place.”
Although the provision seeks to catch other offences, it strikes me that the bank or organisation would merely need to demonstrate that it was not reasonable to have prevention procedures in place. To my mind, that defeats the purpose of extending the offence so widely. Nevertheless, we broadly support the new clause, and I would like to hear from the Minister about the Government’s inclination, if not to accept new clause 6, then to recognise that, at some future point, corporate financial crime could be extended beyond the provisions agreed in the Bill.
Another way of framing new clause 6 would be to codify specifically the exact offences within the three Acts. That might have negated the need for subsection (2)(b), which strikes me as a direct negative that might defeat the purpose. I would be interested to hear what the Minister has to say about the thought process, but generally speaking we support extending corporate financial crime, and are provisionally minded to agree to and support the new clause.
Dr Rupa Huq (Ealing Central and Acton) (Lab)
It is a pleasure to serve under your chairmanship again, Mrs Main. My hon. Friend the Member for Bootle made an excellent speech. New clause 6 is supported by Amnesty International, CAFOD, Corruption Watch, Global Witness, ONE, Rights and Accountability in Development, Tax Justice Network, The Corner House, Traidcraft and Transparency International UK. Those are some heavyweight organisations. Before we adjourned, my hon. Friend asked what happened to the consultation promised at the anti-corruption summit. I would be interested to hear the answer.
The Minister for Security (Mr Ben Wallace)
New clause 6 highlights an issue raised on a number of occasions when we heard from interested parties about the Bill last week. I am pleased that the Opposition have tabled it, because it allows me to restate that the Government appreciate those concerns and agree that the damage caused by economic crime facilitated by those working for major companies is serious and affects individuals, businesses and the wider economy, and indeed the reputation of the United Kingdom as a place to do business.
As the hon. Member for Ealing Central and Acton is aware, the Labour Government took action in the Bribery Act 2010 in respect of bribery committed in pursuit of corporate business objectives. The Act is widely respected as both a sound enforcement tool and a measure incentivising bribery prevention as part of good corporate governance. We have already debated the new corporate offence of failure to prevent tax evasion created in the Bill. The provisions followed a process of extensive consultation, as did the Bribery Act 2010. I trust that hon. Members will agree that such an approach is necessary when considering the adequacy of the existing legal framework in matters involving complex legal and policy issues.
In respect of the current law governing corporate criminal liability for economic crime, the Government announced that a consultation would take place in May this year. I confirm that we will publish a call for evidence on the subject. In keeping with the considered and methodical approach adopted for the reforms on bribery and tax evasion, the call for evidence will form part of a two-part consultation process. It will openly request and examine evidence for and against the case for reform and seek views on a number of possible options. Should the responses that we receive justify changes to the law, the Government will then consult on firm proposals. The Government believe that it would be wrong to rush into legislation in this area for the reasons I have given. In the light of my assurances and the forthcoming publication of the call for evidence, I invite the hon. Gentleman to withdraw the new clause.
Peter Dowd
As I have said, the job of the Opposition is to push the issue as much as we can. As to what the hon. Member for Dumfries and Galloway said about subsection (2), the reality is that we are building into the new clause the capacity for someone to defend themselves, but not stating categorically, “Someone commits an offence if this happens.” There is room for manoeuvre, which is only right. However, in the light of what the Minister has said and the assurance he has given, I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
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).”’—(Tristram Hunt.)
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.
Brought up, and read the First time.
Question put, That the clause be read a Second time.
Tristram Hunt (Stoke-on-Trent Central) (Lab)
I beg to move, That the clause be read a Second time.
The purpose of new clause 14 is to require the Secretary of State to establish a publicly accessible register of the beneficial ownership of UK property by foreign companies within six months of the commencement of the Act. That is another helpful intervention to support the Minister in his work.
As I read in The Observer on Sunday, money launderers use anonymous offshore companies to acquire properties in the UK with the proceeds of crime. That became evident from the Panama papers. More than 2,800 secret companies set up by Mossack Fonseca held 6,000 Land Registry titles in the UK with combined historical costs in excess of £7 billion. In London alone more than 40,000 properties —one in every 10 in the borough of Westminster—are owned by offshore companies with unknown beneficiaries. There is not only an impact on housing costs in the capital, which can, indeed, spread to St Albans, Mrs Main, but a fear about money laundering and the hiding of finance through the use of London property essentially as a reserve currency.
Requiring offshore companies holding property titles in the UK to declare their beneficiaries would be fully in line with the legal obligations of UK companies to disclose persons with significant control, which came into effect in June. Requiring the Government to set up a public register of the persons with significant control of non-UK corporations holding properties and other assets, or PSCs willing to do business in the UK, will naturally tie the two purposes together: the commitment to lift offshore secrecy; and the passing of the Bill with the aim of the eradication of money laundering in the UK. It will build on exactly what the Minister suggested with reference to the former Prime Minister’s anti-corruption speech in Singapore, and the anti-corruption summit. I hope the Minister will agree to the new clause.
Mr Wallace
At the London corruption summit earlier this year, the Government announced that we plan to create a beneficial ownership register of overseas companies that own or wish to purchase property in the United Kingdom. The Government remain committed to delivering that policy and are developing the detail of how the register will work before we issue a call for evidence in the coming months. Our intention is to bring forward legislation to provide a statutory basis for the register in due course and as soon as possible.
The UK leads the world in corporate transparency. That is a position that the UK Government are rightly proud of: we are the first in the G20 to have started a public register of beneficial ownership. We should build on that position, and I am determined that we complete what we started at the summit.
The proposal is that the register will apply throughout the whole of the United Kingdom. That is important to ensure that control of companies owning land is transparent wherever in the UK the land is. However, Scotland and Northern Ireland have different land registration requirements from England and Wales, which makes the drafting of the legislation more complex. The Government therefore believe that it is important to spend time to get the policy and its implementation correct, and to consult on the policy before legislating.
Mr Wallace
It is getting higher—we will be getting into double figures for The Observer’s readership if we are not careful.
The best time to examine the register is when we have had a full consultation. We have worked closely with the Scottish Government and the Northern Ireland Executive to ensure that we get it right. As the Scottish National party has pointed out, things such as Scottish limited partnerships were set up often for landowners to avoid ownership obligations way back in 1907, if I am not mistaken. Therefore, legislating is easier said than done, and we want to ensure that we get it right so that there are no loopholes or areas in which people can hide in the shadows, which might happen if we rushed it. We want to ensure that public means public. I therefore urge the hon. Gentleman to withdraw his new clause.
Tristram Hunt
I thank the Minister for his response. I understand that such a register throws up legal complexities and matters to do with the interrelationship between the English property market and legal system and the Scottish and Welsh ones. That is why it should be a UK-wide process. I am willing to admit that six months might seem a little aggressive in terms of the full publication of the register. The Minister said “in due course” and “as soon as possible”. On Report, perhaps he will give us slightly greater clarity about the commitment with which the Government are approaching the register. I very much welcome his enthusiasm. On that basis, I beg to ask leave to withdraw the motion.
Motion, by leave, withdrawn.
New Clause 15
Failure to prevent facilitation of tax evasion offences: exclusion from public procurement
‘(1) In section 57 of the Public Contract Regulations 2015 after paragraph 3(b) insert—
“(c) the contracting authority is aware that the economic operator is a body that has been convicted of an offence under section 37 or 38 of the Criminal Finances Act 2017.”’—(Tristram Hunt.)
This new clause would ensure that companies convicted of failure to prevent a tax evasion facilitation offence are excluded from public procurement.
Brought up, and read the First time.
Tristram Hunt
I beg to move, That the clause be read a Second time.
The new clause builds on new clause 6, which we looked at earlier. Exclusion is the key means of incentivising good corporate governance. The threat of exclusion from public procurement is known to be one that companies fear more than fines. Making the new offences subject to exclusion would ensure that companies take preventing such offences seriously. The UK’s anti-corruption summit committed to excluding corrupt bidders from public procurement contracts, so it is important that companies that facilitate tax evasion are similarly excluded.
Under the Public Contract Regulations 2015, public authorities must exclude companies found to be in breach of their obligations related to the payment of taxes. Unless the Bill specifies whether the new offences under clauses 37 and 38 will constitute such a breach, the Crown Commercial Service, which is often narrow in its approach, is unlikely to consider that they do. The purpose of the new clause therefore is to urge Ministers to ensure that the Crown Commercial Service understands there to be a breach in that context.
Mr Wallace
I am grateful to the hon. Gentleman for tabling his new clause because it allows us to cover another important element of the tax evasion offence we debated earlier. I also thank him for meeting me to discuss those proposals.
New clause 15 would create mandatory exclusion from public contracts of a relevant body convicted of an offence under part 3 of the Bill. I fully agree that, where an organisation has been convicted under the new offences and grave professional misconduct has taken place, it should be possible to exclude that organisation from public contracts.
I am pleased to say that existing law already allows for that by virtue of the Public Contracts Regulations 2015, which allow for the exclusion of a body from a public contract
“where the contracting authority can demonstrate by appropriate means that the economic operator is guilty of grave professional misconduct, which renders its integrity questionable”.
That is quite a low threshold if you ask me; nevertheless, it allows us to do it. I know the hon. Gentleman will be interested in this part, because it is a European angle to his proposal. I am advised that it is not possible lawfully to include a new mandatory exclusion under regulation 57, as proposed by the amendment. Regulation 57 contains a list of offences based on the six categories set out in the EU public contracts directive. The categories outlined in the directive are exhaustive. Case law indicates that member states are not free to add new additional grounds for exclusion to those set out in the directive.
Mr Wallace
I hope the Committee is satisfied that, where there has been grave professional misconduct by an organisation convicted under the new offences, contracting authorities will have the discretion to exclude them from public contracts.
Tristram Hunt
I thank the Minister for his answer. As my hon. Friend the Member for Bootle quietly alluded, this might be something we will have to look at again amid the welter of opportunities—count them!—thrown up by Brexit. [Hon. Members: “Hear, hear!”]
As a result of European regulations, I am willing to accept the Minister’s point. On Report, will he say whether we could have included in the statistical bulletins on unexplained wealth orders and other elements of the Bill an account of any corporations excluded from public procurement as a result? Is there a statistical account of whether any companies have fallen foul of the measure? Could we gain some account of that?
Mr Wallace
I am grateful for the hon. Gentleman’s idea, which I think is a good one. I will certainly try to ensure it is released in any statistical bulletins. When the Bill is up and running, I would like to know as much as he would how many people are precluded from public procurement practices.
Tristram Hunt
I thank the Minister. On that basis, I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 16
Failure to prevent facilitation of tax evasion offences: reporting
‘The Secretary of State must make an annual report to Parliament containing the number of prosecutions brought and convictions made under section 37 and 38 of this Act.’ —(Tristram Hunt.)
This new clause would require that the Secretary of State reports annually on the number of prosecutions brought and convictions made for failure to prevent the facilitation of UK and foreign tax evasion offences.
Brought up, and read the First time.
Tristram Hunt
I beg to move, That the clause be read a Second time.
The new clause would
“require the Secretary of State reports annually on the number of prosecutions brought and convictions made for failure to prevent the facilitation of UK and foreign tax evasion offences.”
That is connected to an earlier new clause about culture change within Government to ensure the right degree of ministerial push and importance given to the implementation of the Bill, and to ensure that attention is given at the top of the Home Office and in ministerial offices, which is something a report to Parliament encourages. The fear that I and some of my colleagues have is that, if that detail is hidden away in obscure departmental documents, it does not necessarily have the drive and political push it deserves. The new clause is therefore another attempt to support the Minister in his job, and to encourage proper transparency about this interesting and in many ways useful Bill.
Mr Wallace
I do not want to look ungrateful to the hon. Member who is, as he says, trying to help me enhance the Bill and do my job. I am incredibly grateful for all the suggestions from hon. Members over the last few weeks.
Mr Wallace
I am not that grateful.
New clause 16 would require the Secretary of State to report annually to Parliament on the number of prosecutions brought and the number of convictions made under the new corporate offences. Under the domestic tax evasion offence, HMRC will be the investigating authority and the decision on whether to prosecute will rest with the Crown Prosecution Service. In relation to the overseas offence, the Serious Fraud Office and the National Crime Agency will be the investigating authorities and the decision to prosecute will rest with the SFO or the CPS.
It is important to emphasise that, as with the corresponding offence under the Bribery Act 2010, the number of prosecutions alone will not be a true metric of the level of success of the measure. The new corporate offences are not only about responding to wrongdoing but about changing corporate culture and behaviour. True success will lie in changing corporate culture and preventing wrongdoing from occurring in the first place.
In any case, all of the prosecuting authorities already undertake extensive public reporting on investigations and prosecutions. For example, HMRC publishes quarterly performance updates and the CPS publishes an annual report. Neither of those documents are obscure—they are weighty but not obscure. I can confirm that information relating to the new offences will be included in those existing formats. Accordingly, I invite the hon. Member for Stoke-on-Trent Central to withdraw his new clause.
Tristram Hunt
I will not detain the Committee with an inquiry into the difference between “weighty” and “obscure”; these things can often be lost in the mists of time. As we did not quite generate the success that we needed to on new clause 11, I will not put the measure to a Division. However, I urge the Minister to ensure that, having created this interesting Bill and having delivered these interesting reforms, if the reforms are going to be put to proper effect and have the political momentum—a terrifying word—behind them, then a degree of political transparency and support connected to Parliament is important. On that basis, I beg to ask leave to withdraw the clause.
Clause, by leave, withdrawn.
New Clause 19
Whistleblowing in relation to failure to prevent the facilitation of tax evasion
‘The Chancellor of the Exchequer shall conduct a review of arrangements to facilitate whistleblowing in the banking and financial services sector, including the protection of anonymity, in relation to the disclosure of suspected corporate failure to prevent facilitation of tax evasion, and report to Parliament within six months of the passing of this Act.’—(Roger Mullin.)
This new clause would conduct a review into the facilitation and protection of whistleblowers with a focus on the protection of anonymity for those who suspect corporate failure to prevent the facilitation of tax evasion.
Brought up, and read the First time.
The Chair
With this it will be convenient to discuss new clause 22—The culture of the banking industry and prevention of the facilitation of tax evasion—
‘(1) The Secretary of State must undertake a review into the extent to which the banking culture contributes to the failure to prevent the facilitation of tax evasion in the financial sector, and lay a copy of the review before the House of Commons within six months of this Act receiving Royal Assent.
(2) The review must set out what steps the UK Government intends to take to ensure that banking culture is not facilitating tax evasion.’
Roger Mullin
I rise to speak to new clauses 19 and 22, which are on today’s amendment paper for the Committee to scrutinise thanks to the complacent and worrying attitudes of both the FCA and the BBA at last week’s evidence session, when I specifically raised the issues of banking culture and whistleblowing.
During the previous exchanges, the Minister indicated the importance of culture, for which I am grateful. I have been concerned with culture for a long time. In one of my previous lives, I undertook more than 30 cultural studies of large, complex organisations. As many Members will be aware because I have related this fact more than once, large-scale international studies have shown that around 70% of major corporate failures are primarily as a result of a failure of culture—they are not about detailed regulation or detailed law, but about culture. In that regard, this issue must be taken very seriously indeed.
A very important part of culture for the related new clause on whistleblowing is to assess internal trust within organisations. Unless there is sufficient cultural trust, whistleblowers will not feel secure or safe. Despite advances in recent years in the protection of whistleblowers, I am sure that I am not alone in having had people come to me, an MP for barely over a year, saying that they wish to raise issues in organisations but fear the consequences.
I will highlight that by picking just one example—the case of Paul Moore, with whom some Members will be familiar—from the financial sector to show the importance of culture and whistleblowing. He is best known as the HBOS whistleblower, following his dismissal from Halifax Bank of Scotland in 2004. He was appointed to the role of head of group regulatory risk at the end of 2003 and had formal responsibilities for the bank’s policy and oversight of executive management’s compliance with Financial Services Authority regulation. During 2004, while conducting reviews of the bank’s sales culture, Moore and his team uncovered mis-selling and unethical practice. He reported those findings to the HBOS board as his job demanded, and was fired on 8 November 2004 by the HBOS group chief executive officer, James Crosby. Since then, Mr Moore has been shunned by the financial community for doing his job and doing it well.
Mr Wallace
I am grateful to the hon. Member for Kirkcaldy and Cowdenbeath for his contribution. New clause 19 would require a review of arrangements to facilitate whistleblowing in the banking and financial sectors. Whistleblowing can play an important part in bringing wrongdoing to light. The Government value the contribution of whistleblowers and believe they should be able to highlight wrongdoing without fear of retribution. To that end, the UK has put in place a strong framework of employment rights for workers who disclose malpractice in the public interest.
If a worker loses their job or suffers some other detriment —being overlooked for promotion, for example—as a result of blowing the whistle, they may bring a claim to the employment tribunal for unfair dismissal or detriment. To qualify as a protected disclosure under the Public Interest Disclosure Act 1998, the legislation that protects whistleblowers, the issue in question must fall into one of the categories listed in that Act. Those categories include both criminal offences and failure to comply with the law in other ways, so the issues in the Bill are certainly catered for, as is any new offence as soon as it comes into force.
To retain their employment protections, whistleblowers must generally make their disclosures either internally to the employer or to the relevant prescribed person named in statute. Two such prescribed persons are most likely to deal with issues covered by the Bill. HMRC is prescribed for matters about the administration of UK taxes, and the Financial Conduct Authority is prescribed for matters relating to the conduct of banks and all other funds and firms subject to the Financial Services and Markets Act 2000. MPs are now also prescribed persons, so Public Interest Disclosure Act remedies will also apply if a person suffers a detriment in employment as a result of disclosure to us.
Both HMRC and the FCA have published information for whistleblowers on how to disclose wrongdoing in their workplace. They both accept, and act on, anonymous disclosures. The Public Interest Disclosure Act 1998, under which disclosures are made and protected, was comprehensively reviewed as recently as 2014. There is a code of practice and guidance for its use. The Government are taking significant steps to ensure that effective arrangements are in place to facilitate whistleblowing in relation to tax evasion or other matters. I am not sure that, as yet, I see a case for further review at this stage.
On new clause 22, I agree with hon. Members that the culture of the financial services sector, as well as other sectors such as advisory, accounting and legal, plays a key role in preventing financial crime. That is the very reason that the Government are legislating for the new corporate offences in part 3 of the Bill—to drive culture change among businesses in relation to preventing complicity in and facilitation of tax evasion. A key measure of the success of the new offences will be how businesses respond and drive culture change.
We have engaged extensively with business over the last 18 months on the offences, both in the UK and overseas. We have seen examples of good practice in a number of sectors and organisations, which have responded swiftly to the new measures and are proactively seeking to drive culture change and operate to the highest standards. Some organisations have been slow to react, but HMRC officials have been working with them and their representative bodies to support business in putting in place compliance procedures.
Given that ongoing engagement, I do not believe it would be prudent to conduct a statutory review immediately following Royal Assent, although I share the same objectives as hon. Members. It is the Government’s view that we should focus our efforts on effectively implementing the new offences, and on using them to help trigger further cultural change, prior to diverting resources to a further review of the arrangements. I would be happy to discuss that further with hon. Members in case they have specific concerns that I should raise with other ministerial colleagues, which I am also happy to do. I hope I have provided adequate assurances for now or that we can agree to disagree. I hope the hon. Gentleman feels able to withdraw the new clauses.
Roger Mullin
I thank the Minister for his remarks, particularly his conclusion, when he indicated an open mind, as is only to be expected from him. However, we remain concerned about culture. He mentioned the role of the FCA. After the comments made last week by the FCA representative, I would have thought that the FCA itself needs a bit of a culture review to see whether it is fit for purpose.
Mr Wallace
When the Bill was being rolled out, I specifically asked for a meeting with the FCA to demand that when it comes into force—hopefully it will do so—they will up their game. The overall intention of the Bill is not just the criminal prosecution of individuals, but to bring about cultural change. As a regulator, I would like steps to be taken. One of the things that I welcome in the English part of the Bill is that the perpetrators are faced with unlimited fines for some of the offences—there is no cap on fines. With large fines, we change not only employees’ habits, but shareholders’ behaviour, which is important.
Roger Mullin
I think the Minister for those remarks and I particularly welcome his remarks about his meeting with the FCA. He is to be commended for that, and we would fully support him. Given his remarks, we will not at this stage push either of the new clauses to a Division, but we will reserve our position and perhaps return to it on Report. I beg to ask leave to withdraw the new clause.
Clause, by leave, withdrawn.
New Clause 20
Recovery orders: repatriation
‘(1) The Proceeds of Crime Act 2002 is amended, after section 266, by inserting—
“266A Recovery orders: repatriation
(1) Where a court—
(a) issues a recovery order under section 266; and
(b) has reasonable grounds for suspecting that property subject to the recovery order was obtained through unlawful conduct in a foreign country,
the court must issue a repatriation order in relation to that property.
(2) A repatriation order shall provide that within a year of the property’s having been recovered the property must be repatriated back to its country of origin.
(3) When a repatriation order has been issued, the Secretary of State shall send a request for cooperation and assistance to a representative of the government of the country of origin, in consultation with relevant third parties, and must, upon a court having issued a recovery order, endeavour to agree with that representative—
(a) as to how such property or the value of such property will be used upon its being repatriated to ensure that wherever possible the property repatriated will be used in a manner that will contribute to the implementation of Sustainable Development Goal 16, that benefits victims of the unlawful conduct, or that ensures the repatriated property is used for the original purpose from which it was diverted;
(b) a mechanism for accounting for the disbursement of the property and for making public a report on the use to which the property has been put.
(4) For the purposes of this section—
“relevant third parties” will include civil society actors and non-governmental organisations; independent audit bodies; the Department for International Development and multilateral development banks; and
“victims” will include communities affected by the unlawful conduct as well as the State.
(5) A repatriation order shall not be issued where—
(a) the court is satisfied that on the balance of probabilities that successful repatriation would lead to the property or the value of the property being subject to conduct that, were it within its jurisdiction, would violate the Human Rights Act 1998;
(b) the court is satisfied that on, the balance of probabilities, that successful repatriation would most likely result in such property being subject to illicit financial activity by a Politically Exposed Person in its country of origin; or
(c) the court is satisfied that, on the balance of probabilities, the property would not reach and/or be used for the purposes as agreed to by the Secretary of State and the representative of the country of origin.
(6) The UK may retain the total value of the recovered property where the Secretary of State and the relevant enforcement agency take all appropriate steps as set out in section (3) subsections (a) and (b) to assist the State in question in repatriating such property and yet receive no cooperation from the other State within a year of having taken such appropriate steps.
(7) For the purposes of subsection (6) “cooperation” is defined as the foreign State’s conclusively demonstrating to the Secretary of State and enforcement agency of its having done or being in the process of implementing the necessary steps required to ensure that the property or value of such property will be used for the ends laid down in section (3) (a) and the court is satisfied on the balance of probabilities that the property or value of such property will be used in accordance with those activities and probabilities as laid down in subsection (5)(a), (b) and (c).
(8) The court may order that a repatriation order may grant that the property could be given, subject to an agreement between the Secretary of State and a representative of the government of the country of origin, to a non-state actor who may distribute the property in accordance with subsection (3)(a) and (b) above.
(9) Upon application by the relevant enforcement agency the court may increase the time period within which repatriation must happen up to a maximum of five years if the court is satisfied that operational circumstances preclude the possibility of repatriation within the period previously required.
(10) The relevant enforcement agency may apply to the court for further extensions to the time period, where there is less than a year before the date of repatriation.
(11) Where the court grants an extension the enforcement agency in conjunction with the Secretary of State must publish a public report detailing the reasons why it sought an extension to the deadline for repatriation.
(12) Where the Secretary of State in conjunction with the enforcement agency publishes such a report as set out the Secretary of State may omit sensitive operational information which would preclude the possibility of repatriation being successful should such details be published.
(13) Such a report without redacted information will be passed to the Secretary of State upon each application made to the court for an extension.
(14) No later than one year after such property is repatriated all such reports will be made public in an uncensored form.””—(Dr Huq.)
This new clause would require property that was subject to a recovery order to be repatriated to its country of origin where the money was options through unlawful conduct in that country.
Brought up, and read the First time.
Dr Huq
I beg to move, That the clause be read a Second time.
The new clause would place a duty on the Secretary of State—and the enforcement agencies vested with the power to do so—to receive recovered property under the Proceeds of Crime Act 2002, and to repatriate recovered property where a court is satisfied that the property or the value of the property was begotten by illicit means. I hinted at the issue this morning. The clause builds on former Prime Minister David Cameron’s global forum for asset recovery, which came about after the anti-corruption summit of May 2016. We Opposition Members commend him for that. How he is missed. We have seen the forum begin to bear fruit, with the Government having signed a memorandum of understanding with Nigeria last September. There has clearly been limited progress on repatriation, but the Crown Prosecution Service’s most recent asset recovery strategy laments the low take-up of mutual legal assistance requests:
“Since London is a global centre for finance, there are a large number of criminal proceeds deposited in its financial institutions. Despite this, historically the CPS has not received a high volume of incoming MLA requests for the restraint and recovery of assets.”
Many of the people from the charitable sector who gave evidence worry that, at the end of the process, little will go back to those communities and third-world economies.
The Minister said on Second Reading, in relation to repatriating illicit wealth, that
“It is important to note that we are already doing this. In November 2015, the UK returned £28 million to Macau, which were the proceeds of corruption laundered in the UK. That is a concrete example of our giving back money to those countries that have been robbed by crooks who have used Britain to launder the money or to make the money in its jurisdiction. I want to see more of that and to see it go further.”—[Official Report, 25 October 2016; Vol. 616, c. 198.]
Through this new clause, we seek to help him with that process. He has made a clear commitment to seeing repatriation go further, and to ensuring that there is more of it. The CPS has also stated that mutual legal assistance is seriously underused, and that massive sums of illicit wealth are simply not subject to such requests and are therefore not being repatriated.
The new clause would not obstruct the Minister or the Government in their desire to see greater repatriation of illicit wealth. In fact, it would aid the Government in realising their aims. The new clause seeks to provide a different avenue from mutual legal assistance for repatriating illicit wealth, and it has a number of in-built safeguards to ensure that the UK repatriates such wealth to deserving countries, as well as safeguarding against the UK’s time being wasted.
Although the new clause is substantial in scope and takes up a number of pages in the amendment paper, we are not trying to cause an argument for argument’s sake. A precedent for repatriating wealth has been set, and the Committee has heard an example. The new clause would streamline the process, and I hope that the Government will take that in good faith; the new clause is technical, rather than political.
This is how we envisage the new clause working: where a court is satisfied that property is recoverable and issues a recovery order, and where it is also satisfied that the property was acquired with wealth illicitly obtained abroad, it may instruct a receiving enforcement agency to take steps towards repatriating that wealth upon the property being initially recovered. We term that a “repatriation order”—that is snappy.
Once such an order has been made, the Secretary of State would request co-operation and assistance in the repatriation process from a representative of the Government of the country of origin. The Secretary of State would then be free to enter into consultation with any other relevant third party. After that initial contact, an agreement would be reached with the aforementioned actors on how the value of the property would be used on repatriation.
The purpose of the measure is international development. In the new clause, proposed new section 266A(3)(a) of the Proceeds of Crime Act 2002 states that
“wherever possible the property repatriated will be used in a manner that will contribute to the implementation of Sustainable Development Goal 16”,
or the repatriated property will benefit the victims of the crime, or it will be used for its original purpose. The Government have some flexibility and room for discretion in the phrase “wherever possible”. Proposed subsection (4) contains a list of definitions.
Mr Wallace
First, I think that we all support what we are trying to do: returning money that we take off the bad guys to whomever it belongs to. If that is not possible—I used the example earlier of a criminal enterprise whose wealth was created by drug dealers, rather than by ripping off a state or somebody else’s assets—we return it to the prosecution authorities to ensure that they can continue.
Significantly, in the past, we have seen money paid back in cases of grand corruption. The UK is party to the UN convention against corruption, article 57 of which clearly requires embezzled funds to be paid back to the victim state, so we are already obliged under international law to do that. We must do that, and it is what we want to do. The £28 million returned to Macau that the hon. Lady and I both mentioned fell under the auspices of that convention. As we are subject to international law, there is no requirement to put such provisions in our domestic legislation. Nothing in our law prevents us from returning recovered assets.
Sharing and repatriating assets in asset recovery cases is a fast-developing issue in international law, and it is something that the UK fully supports. For example, there is a requirement, under the EU framework decision on the mutual recognition of confiscation orders, that at least 50% of assets recovered on behalf of another member be sent back to that state. The UK can return assets to any country, and where underpinning international agreements are required, we enthusiastically pursue them. For example, we recently concluded an asset-sharing agreement with Nigeria, under the formal title I referred to earlier.
This helpful debate on the Opposition’s new clause has allowed us to put these points on the record, but I trust that the Opposition will agree that there is no need for further primary legislation. Asset return happens anyway, with my full support and encouragement. Indeed, strict requirements in an Act could restrict our flexibility and make it harder to obtain effective asset-return agreements tailored to the peculiarities of individual cases. I am aware of a number of cases in which another country’s Government members have requested that we effectively co-return assets for certain projects, for fear of them disappearing into other parts of that Government that are corrupt. That type of flexibility is important to make sure that moneys returned do indeed get to the right place, rather than going back to the same place, and the same individual turning the assets of crime back into another townhouse in London.
That flexibility is really important, and while I cannot bind any successor Government, it would be odd if any Government chose to say, “No, thank you, we are going to keep everything, break our international law obligations, and upset a number of countries around the world by just pocketing this for ourselves.” It is not what we have done in the past, and it is not what we will do in the future. I urge the hon. Member for Ealing Central and Acton to look to our obligations under international law; I hope that that will satisfy her that we do not need more restrictive primary legislation on this issue.
Dr Huq
I listened carefully to the Minister. The 14 subsections in new clause 20 have a set of in-built checks and balances, and I know that the development charities would be disappointed if the new clause was not in the Bill. I accept, as I said, that things are being done on this front—the Macau example is a very good one—but as I understand it, the Minister says that there is no need for the new clause because there are international agreements. He mentioned the EU framework; the first money laundering directive also came from the EU, and we are leaving the EU, so I think it is no bad thing to put our own defence in the Bill, if only for ourselves. We would like to put the new clause to a vote.
Question put, That the clause be read a Second time.
Dr Huq
I beg to move, That the clause be read a Second time.
We discussed this subject this morning in connection with clause 38. The new clause would make it incumbent on the Secretary of State to do all that she can to ensure that there are public registers of beneficial ownership in the UK’s overseas territories and Crown dependencies for companies operating and registered in their jurisdictions.
Proposed new subsections (2) to (5) delineate the steps that the Secretary of State would take to ensure that such registers were adopted. Proposed new subsection (3) states that those territories that failed to do so by a specific time would be subject to an Order in Council. I know what was said this morning, but there is precedent for that; I could go through a whole list of examples, but I will not bore the Committee with that quite yet.
The Government have created a Bill with the express intention of stamping out financial crime and clearing up the UK and London’s image. We quite rightly no longer wish to be seen as a country that is a soft touch, or as a City where dirty money can be hidden. To me and others, it is therefore astounding that there is no mention at all of the UK’s overseas territories and Crown dependencies in the Bill.
Thanks to the Panama papers, we and the rest of the world know that the UK overseas territories and Crown dependencies facilitate corruption, money laundering and tax evasion on a global scale. I am sure that the Minister is sick to death of hearing about the issue—we heard about it so many times in the evidence, and pretty much in every speech on Second Reading, with both Government and Opposition Members mentioning it—but I am afraid to say that the public are also sick of hearing about the double standards that exist for the politicians and wealthy elite who do not pay their taxes.
Opinion polling and recent research has shown that more than eight in 10 people think that it is morally wrong for businesses to avoid paying tax, even if that is legal or looks like, prima facie, a victimless crime. Only 20% of people think that any political party has done enough, and 77% think that the Government should be doing more to ensure that companies stop tax-dodging; among leave voters, that figure rises to 83%. More than two thirds of people want the Government to insist on public registers of beneficial ownership in the overseas territories and Crown dependencies. Again, there is a whole alphabet soup of different organisations and charities involved. This is all according to ComRes polling done on the issue for Oxfam and Christian Aid.
The issue will continue to reappear until the Government start listening to the people, finally step in and, if needs be, compel overseas territories to toe the line. None of us wants overseas territories to have registers forced on them, so we would be delighted if they did something. Christian Aid suggested a timeline, a set of goals being put in place to make something happen, because nothing will happen overnight; those jurisdictions are used to propping up tax evasion, so they will not fall into line quickly. A set of dates and objectives, however, would be extremely helpful.
We have already heard today about how overseas territories and Crown dependencies are making progress, but it is not swift enough. They have had three years, but nothing has happened. Under the former Prime Minister, they were first asked to take action three years ago, but not one of them bothered to consult on that request. The ones that responded to it largely said a simple no to the supposed consultations. In April 2014, they were asked again to do so in a letter from the former Prime Minister, but only one, Montserrat, committed to adopting a public register. The worst offenders, however, the ones that facilitate the stealing of wealth from developing countries and so in effect harbour blood money —the British Virgin Islands and the Cayman Islands—ignored the Foreign and Commonwealth Office’s request to meet and discuss the issue. I tried to ask about that this morning, but did not get a proper answer.
At every step of the way, the overseas territories and Crown dependencies have sought to frustrate any real progress. I did not mention any particular ones by name in my speech on Second Reading, but I had a really snotty, or not very friendly, letter from the Isle of Man, basically saying, “How very dare you. You don’t understand any of this.”
The Library brief on beneficial ownership cites a Minister who said:
“We have made huge progress in ensuring that we have registers of beneficial ownership in the overseas territories…The progress that has been made in the overseas territories is the greatest under any Government in history, which perhaps is one reason Transparency International said that the summit had been a good day for anti-corruption.”—[Official Report, 15 June 2016; Vol. 611, c. 1745.]
However, the brief also states:
“Given that some of the Crown Dependencies and British Overseas Territories have already…said very firmly that they will not be creating public registers, it seems likely that any further negotiation towards such registers will not be easy.”
That is an impartial brief. Transparency International recognises that some people are setting their faces against this.
Dr Huq
Yes. The Minister was quoted in the Jersey States Assembly in a question about the fact that
“the U.K. Government hopes the Crown Dependencies might have made their Registers of Beneficial Ownership of Companies public by the end of this year, or into next year.”
The Deputy asked whether the Chief Minister would
“advise what discussions he has had”
and what steps were being taken to put in place the good work that the Minister has mentioned. The following answer came back:
“The U.K. Government accepts, and has accepted in conversations with us, that our approach meets the policy aims that they are trying to meet and international bodies, standard setters and reviewers, have acknowledged that our approach is a leading approach and is superior to some other approaches taken.”
The answer is quite long, and I will bore people if I read it all out, but in essence it was, “We’re doing enough, and we’ve been told that it’s fine.” That is quite scandalous. A supplementary question was also asked. The Chief Minister of Jersey has said, “We’re doing what we’re doing, and it’s enough.” That does not go far enough. As long as such countries can get away with that, they will do that. There is a race to the bottom. They are all saying, “We don’t have to do it; no one else is doing it.”
As I am sure the Minister knows, Orders in Council have been made over the years in relation to different things. One was made in 1991 to abolish capital punishment for the crime of murder in the Caribbean territories of Anguilla, the British Virgin Islands, the Cayman Islands, Montserrat and the Turks and Caicos Islands. In 2009, the UK Government suspended the ministerial Government and the House of Assembly of the Turks and Caicos Islands. The Government basically went in to run the thing: direct rule from London was imposed, despite opposition and criticism. There is a longer list of examples. That has been done before. It seems from the Chief Minister’s answer that Jersey thinks it can get away with it. Could we perhaps set a date of, say, 2020 and say that if it has not published entirely public registers of beneficial ownership by then, we will presume that all money coming through is dirty, or something like that? That may concentrate minds.
I could go on and on about the new clause, but I was told to be brief this afternoon, so I will end there for now. I am curious to hear the Minister’s response.
Richard Arkless
The SNP generally supports that proposition—we would prefer that Crown dependencies and overseas territories held publicly available registers of beneficial ownership—but to further a point that I made earlier, as the Scottish National party, we are obviously reluctant to compel this place in primary legislation to legislate for jurisdictions where it perhaps does not have locus. Proposed new section 2AA(5) in new clause 5 highlights the constitutional quagmire that that would put this place in. It states that this place would
“take all reasonable steps to support the Crown Dependencies to consent”.
Are we going to try to persuade them to consent? I do not quite understand what that subsection is getting at. If we have jurisdiction, we have jurisdiction; if we do not have jurisdiction, we simply do not have jurisdiction.
In conversations that I have had with the Jersey authorities—I have forthcoming conversations with the Isle of Man authorities, which sent me a similar letter, although I perhaps would not describe it in such terms—they have been at pains to stress that this place does not have competency to make such legislative provisions. I am minded to agree, even though I think it would be a good idea if they did, under their own steam, make those public registers available. Our position is that we support the proposition in principle, but we do not see that this new clause is competent, given the jurisdictional capabilities of this place over the Crown dependencies.
Roger Mullin
The SNP has been very supportive of everything today, but I have to say that for the past year and a half I have been having discussions with the Isle of Man authorities, including with the First Minister there, and I have found them genuinely willing to engage in discussions. I think that the language used about the Isle of Man was unfortunate.
Mr Wallace
As the hon. Lady rightly says, this subject has been raised significantly, both on Second Reading and elsewhere. New clause 21 would set a legislative timetable for the UK Government to ensure that overseas territories have a public register of beneficial ownership, and to work with Crown dependencies to achieve the same outcome. There is considerable interest in this specific issue and I am pleased that this amendment allows us to debate it. I understand where the Opposition are coming from and appreciate the desire for these jurisdictions to have publicly accessible registers of beneficial ownership information—David Cameron made this an ambition in 2015. I would be grateful if the hon. Lady clarified why she chooses to treat Crown dependencies differently from overseas territories when it comes to some of the measures; that would be helpful to all Members.
While the overseas territories and Crown dependencies are separate jurisdictions with their own democratically elected Governments, and are responsible for their own economic diversification and fiscal matters, we have been working with them on their role on company transparency. If public registers emerge as a new global standard, the UK Government would expect all relevant jurisdictions to meet that standard. However, it would be wrong to say that, in the absence of public registers, no efforts have been made to increase corporate transparency and tackle tax evasion and corruption. The Crown dependencies and those overseas territories with financial centres are already taking a number of important steps on beneficial ownership and tax transparency, which will put them well ahead of most jurisdictions. This includes some of our G20 partners and other major corporate and financial centres, including some states in the United States. These measures will prevent criminals from hiding behind anonymous shell companies and mark a significant increase in the ability of UK law enforcement authorities to investigate bribery and corruption, money laundering and tax evasion.
I asked officials whether there has ever been an example of our imposing legislation on the Crown dependencies. As far as we can find out, in recent history there has never been an example of our imposing legislation on Crown dependencies without their consent. That is important—we have not gone around imposing our will on Crown dependencies as we see fit. Where we have done so on overseas territories, it has been on very strong moral issues such as capital punishment. Both in Crown dependencies and overseas territories, people have moved quite significantly and, I have to say to the hon. Lady, far more significantly than in 13 years of a Labour Government. We cannot sit here and ignore the elephant in the room.
Under our Government, we now have a position where the debate in this room is about the word “public” and whether registers are going to be public. It is not about whether these islands and other places will have a central register of beneficial ownership. By next year, they will either have a direct central register or linked registers and that is 90% of the way. By the way, our law enforcement agencies will have automatic access to that information.
The best thing, in my view, would be to say, “Yes, we know what David Cameron’s intention was in 2015 when he made that statement; yes, the United Kingdom pretty much leads the world in making our register public for the whole of the United Kingdom”, but also to say, “Let us revisit this once we get the Bill through, once we see whether our law enforcement agencies can use that access to prosecute, deter, change culture and show the way forward.” If that is not happening, of course we can have these debates again, but we should recognise that a lot of those countries have moved without our imposing our will on them, and we are hopefully giving access to our National Crime Agency and HMRC—all the things that we struggled to get for very many years. Let us see where that journey takes us. Our intention is clear. We pretty much lead the world in this. I urge hon. Members to recognise that we are going a long way.
Richard Arkless
The Minister will forgive me if I am wrong, but he has only outlined the position and the progress made by the Crown dependencies in having registers and information sharing. Will he elaborate on the overseas territories or did I miss something?
Mr Wallace
I am grateful to the hon. Gentleman for pointing that out. I meant and/or the overseas territories. The full house will, hopefully by next year, have those registers in place with automatic sharing enabled for our law enforcement agencies, and vice versa—should someone choose to use our country to hide tax from those other countries, their law enforcement agencies will be able to have it.
What I notice about all this is that the world is changing. Transparency is in the ascendancy, secrecy is not. Whether these places are overseas territories or other countries that are nothing to do with the United Kingdom, it is not secrecy that makes them competitive or attractive, but the tax rates and surrounding regulations. That is generational change. Yes, there will be people who wish to hide their wealth for all the wrong reasons, but we are now in a position where our agencies and bodies of law and order will be able to access those areas. They will not have to rely on leaks or third-hand information.
I would not be surprised if, in five or 10 years, we are talking about entirely different countries around the world, maybe even countries that we might think would not be harder to access, but actually are. Those countries might have a more developed legal system and a more protective privacy system that makes it harder for our forces of law and order to get hold of data. I certainly think that these places have come 90% of the way, and we should see whether that works for us. We all have the intention and the United Kingdom is leading by example.
The new clause is a very strong measure. We should not impose our will on the overseas territories and Crown dependencies when they have come so far. Irrespective of the point raised by the hon. Member for Ealing Central and Acton about their attitude and about whether they were pushed or forced, they were not pushed there by a gunboat. It is important to recognise that we have got where we have through cajoling, working together and peer group pressure, which, after all, makes a real difference. Therefore, I urge the hon. Lady to withdraw the new clause.
Dr Huq
It is not good enough to say that we just have to pat ourselves on the back and that everything is fine. I am a bit disappointed with the Minister for trotting out that thing about 13 years of Labour. What did Labour do? We passed the Proceeds of Crime Act 2002, which the Bill amends; the Serious Organised Crime and Police Act 2005; the Bribery Act 2010, section 7 of which we discussed so much this morning; and the Money Laundering Regulations 2007. We created the Serious Organised Crime Agency to ensure a single, intelligence-led response to organised crime.
Dr Huq
Let me finish this list. We also passed the Terrorism Act 2000, part 3 of which we have been amending here, as well as part 2 of the Anti-terrorism, Crime and Security Act 2001—legislation to deal with all these things that we have been talking about, such as terrorist funding. It is a bit low of the Minister to trot out that one about 13 years of Labour. We have been consensual and friendly all the way through this Committee, saying what good legislation this is, so that is a bit tawdry. [Interruption.]
The Chair
Order. It is a bit difficult to hear what the hon. Lady has to say. Is the Minister intervening?
Mr Wallace
We could say that that is a whole list of missed opportunities for Labour to impose its will on the Crown dependencies. The point is that this takes time. I do not expect Labour to rustle up a perfect, tax-transparent solution to the problem; I did not expect Labour to do it in 13 years, and it is unreasonable to say suddenly, “We are going to impose it in the Bill.” There has been a direction of travel all the way through the last decade and a half. This has been about building a slow but thorough process to make sure that we got to where we are. We will be back again on economic crime and reviews of regulators, and to build on some of these issues.
Dr Huq
I respect the Minister and I know that he is a reasonable person, but six years into government, he is dragging up the record of a previous Government. I would like to pass on to him the Hansard of the States of Jersey legislature. In it, the question was asked:
“Can the Chief Minister confirm that this is not something that, from Jersey’s perspective, is immediately on the cards”
or is
“the Minister for Security in the UK”—
that is the Minister opposite me—
“under a misunderstanding of what direction the Crown Dependencies are going in?”
The answer from Senator Gorst, from the governing party in Jersey, was as follows:
“they have decided that the best approach for them is a public register. Of course, they are asking others around the world to consider following their approach. We take the approach which meets the international standard which is, as far as we are concerned, a leading approach.”
Judging from that, Jersey has no plans to have a public register until it becomes the international standard.
I accept that the Minister says that it is bad to compel people to do things, but in my last speech, I said that we could work towards some sort of timeline or some dates. Rather than compelling and forcing people to do things, we can encourage them with dates. Already three years have passed, and very little has happened. From what the Chief Minister and all these people in Jersey have said, it looks very much as though they have no intention of taking this action. Earlier, my hon. Friend the Member for Bootle referred to things looking a bit hypocritical from the outside; I worry that people might judge us that way. I have listened carefully to what the Minister said. We will not push the new clause to a vote, but I am sure that he is aware that a lot of people are concerned about the issue. I thought he would be interested to see that Hansard, in which he is mentioned; it is quite flattering. I beg to ask leave to withdraw the clause.
Clause, by leave, withdrawn.
Clause 45
Minor and consequential amendments
Question proposed, That the clause stand part of the Bill.
The Chair
With this, it will be convenient to discuss the following:
That schedule 5 be the Fifth schedule to the Bill.
Clauses 46 to 51 stand part.
Mr Wallace
The remaining clauses in part 4 are relatively technical and straightforward. I am tempted to sit down after saying that. They are also similar to other pieces of legislation, so I will not delay us much longer, beyond highlighting a few points.
Clause 46 allows the Secretary of State to make by regulation such provision as they consider necessary in consequence of this Bill. Clause 47 sets out the procedural requirement for making regulations in respect of the devolved Administrations, while clause 49 covers the Bill’s territorial extent. Most of the Bill extends to England, Wales, Scotland and Northern Ireland. As I stated on Second Reading, we expect the Scottish Government and the Northern Ireland Executive to seek legislative consent motions from their legislatures; I welcome that, and support them in doing so. I am grateful for our constructive and ongoing engagement with the devolved Administrations.
As this brings us to the end of the Committee, I pay tribute to the Chair and co-Chair for their expeditious and authoritative chairing of our proceedings, and to the many members of the House authorities that have facilitated our consideration of the Bill. They include the Clerks of the Public Bill Office, the Doorkeepers, Hansard and many others.
I am grateful for the constructive approach taken by the Opposition Front Benchers and the Scottish National party in trying to make the best of the Bill. It is not over yet; I understand that there is a long way still to go. I am grateful for the amendments that were tabled, including those from the hon. Member for Stoke-on-Trent Central. I thank the hon. Members for Dumfries and Galloway, and for Kirkcaldy and Cowdenbeath, for pointing out the issues to do with Scottish limited partnerships and other concerns; I shall meet them for discussions.
The fact that the Committee stage is to finish early is a testament to the significantly cross-party approach, it says here. We shall, I hope, return to the Floor of the House with the Committee’s strong endorsement of the Bill as well drafted legislation that will make a difference in the fight against organised crime.
Since I took on my present job, I have had to deal with a range of matters, including terrorists and serious organised crime. The bit that scares me the most is the serious and organised crime—the wealth of those individuals, and the impunity with which they operate. I cannot say how helpful the Bill will be, at least in taking away their profit and returning it to the countries or people they have stolen from or, failing that, to the forces of law and order. When I go to sleep at night, it is serious and organised crime that scares me more than anything else in my brief. I hope that we have gone a long way towards at least deterring those engaged in it, and sending a strong message to people who think that such behaviour is permissible.
Question put and agreed to.
Clause 45 accordingly ordered to stand part of the Bill.
Schedule 5
Minor and Consequential Amendments
Amendments made: 54, in schedule 5, page 140, line 11, leave out “designated” and insert “counter-terrorism”.
See the explanatory statement to amendment 16.
Amendment 73, in schedule 5, page 140, line 32, at end insert—
‘( ) In paragraph 5, in sub-paragraph (1), for “this Schedule” substitute “any provision of this Schedule other than Part 2A”.
( ) In that paragraph, omit sub-paragraph (4).”
This amendment is consequential on NC18.
Amendment 74, in schedule 5, page 140, line 33, at end insert—
‘( ) In paragraph 8(1), for “this Schedule” substitute “paragraph 6”.”
This amendment is consequential on NC18.
Amendment 75, in schedule 5, page 140, line 34, at end insert—
‘( ) After paragraph 9 insert—
Restrictions on release
9A Cash is not to be released under any power or duty conferred or imposed by this Schedule (and so is to continue to be detained)—
(a) if an application for its forfeiture under paragraph 6, or for its release under paragraph 9, is made, until any proceedings in pursuance of the application (including any proceedings on appeal) are concluded;
(b) if (in the United Kingdom or elsewhere) proceedings are started against any person for an offence with which the cash is connected, until the proceedings are concluded.”
( ) In paragraph 10, in sub-paragraph (1) after “Schedule,” insert “and the cash is not otherwise forfeited in pursuance of a cash forfeiture notice,”.
( ) In that paragraph, after sub-paragraph (8) insert—
“(8A) If any cash is detained under this Schedule and part only of the cash is forfeited in pursuance of a cash forfeiture notice, this paragraph has effect in relation to the other part.””
This amendment is consequential on NC18.
Amendment 55, in schedule 5, page 141, line 27, leave out “303O(4) and insert “303O(5)”
This amendment corrects an incorrect cross-reference.
Amendment 56, in schedule 5, page 142, line 2, at end insert—
( ) in paragraph (b) (as amended by section 28 of this Act), for “or 298(4)” substitute “, 298(4) or 303O(5)”;” —(Mr Wallace.)
This amendment is consequential on amendment 15 and corresponds to the amendment of section 82 of the Proceeds of Crime Act 2002 made by paragraph 18(3)(b) of Schedule 5 to the Bill, as amended by amendment 55.
Schedule 5, as amended, agreed to.
Clauses 46 to 48 ordered to stand part of the Bill.
Clause 49
Extent
Amendment made: 52, in clause 49, page 102, line 34, at end insert—
“() section 28(2A);” —(Mr Wallace.)
This amendment is consequential on amendment 15.
Clause 49, as amended, ordered to stand part of the Bill.
Clause 50
Commencement
Amendment made: 53, in clause 50, page 103, line 5, after “25” insert “and 28(2A)”—(Mr Wallace.)
This amendment is consequential on amendment 15.
Clause 50, as amended, ordered to stand part of the Bill.
Clause 51 ordered to stand part of the Bill.
Question proposed, That the Chair do report the Bill, as amended, to the House.
Dr Huq
It has been a pleasure to serve under your chairmanship, Mrs Main, and that of Sir Alan Meale in the earlier sittings. I commend the Minister on the Bill. We can all sleep safely in our beds because of it. I am fortunate that my first Front-Bench service has been with such a nice Minister. I look forward to working constructively with the Government on Report—even if there were some tiny things. However, let us not raise those.
Richard Arkless
I add my thanks to you, Mrs Main, and congratulate you on your splendid chairing today. We got through the Bill at a rate of knots, and like other Members, I am delighted to be leaving before 3.30 pm, thanks to you. I do not wish to inflate the ego of the Minister any further, given the compliments that he has had from all sides. Suffice it to say that with the second name Wallace, I wonder what happened.
There is a great deal of cross-party consensus about the objectives of the Bill. It is about making sure that the bad guys, who elicit huge sums of money from criminal activity, have nowhere to hide. We are all focused on that goal, and we will all come together to make sure that that happens. If we can achieve that—subsequent, obviously, to lengthy conversations that we still have to have on a few points, and I am sure that the Minister will treat those conversations as he has done others throughout the Bill process—then I am sure that we can get to a position that will satisfy us, if not in this primary legislation on Report, then certainly within the contemplation of Government in future. That is certainly our objective. Unlike my more experienced colleague, my hon. Friend the Member for Kirkcaldy and Cowdenbeath, who has been an MP for the same amount of time as me, this is my first Bill Committee. It has not been the most contentious in the world, which I suppose I should be grateful for, but I look forward to the other stages on the Floor of the House, and I thank all Members.
Question put and agreed to.
Bill, as amended, accordingly to be reported.
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Sir Roger Gale (in the Chair)
Once we have heard the opening speech, I will indicate whether it is necessary to impose a time limit. Nine Members are seeking to take part in the debate, so we are probably looking at around five minutes each.
Mr Gary Streeter (South West Devon) (Con)
I beg to move,
That this House has considered the South West Charter for Growth.
It is a pleasure to serve under your chairmanship, Sir Roger—[Interruption.] That is a ringing endorsement. I am delighted to have secured this opportunity to bring to Westminster the campaign for the south-west to be seen as a centre for growth. The business community in the south-west is serious about introducing a framework for growth and economic prosperity in our important and much-loved region, which is what we are here to debate today.
We do not come to the Government with a begging bowl; we come to say that this is what the south-west business community plans to do for our region. The charter is not the brainchild of local authorities, politicians or quangos; it is the voice of business expressing its positive commitment to our region and saying to Whitehall, “This is what we will do. Now, Government, please do the part that only Governments can really do, namely infrastructure. Give us the tools to do the job.”
First, how do we define the south-west for the purpose of this debate? The Government usually describe the south-west as the seven counties from Land’s End to Gloucester, including Bristol and Stonehenge—a wide and disparate area. Not so today: the south-west for the purpose of this debate, the summit and the charter is primarily Cornwall, of course including the Isles of Scilly—I would not want to leave them out—Devon and most of Somerset, excluding the unitary authorities to the north. In other words, we are discussing the territory of the two local enterprise partnership regions of Cornwall and Isles of Scilly and the Heart of the South West.
The charter we are presenting the Government today builds on a growth summit held at the University of Exeter on Friday 21 October 2016. The summit was the initiative of one of the largest private-sector employers in our region, Pennon Group—the owner of South West Water, Bournemouth Water and Viridor—in partnership with the Western Morning News, a great champion of our region. The summit brought together the main economic interests of the south-west, alongside many of the region’s Members of Parliament. I am delighted that so many of my colleagues from Cornwall, Devon and Somerset, and from both sides of the House, are here today. The Opposition Members for our region are a tad depleted these days, but what Labour lacks in quantity the right hon. Member for Exeter (Mr Bradshaw) more than makes up for in quality. I am delighted to see him here today.
Mr Streeter
I probably won’t. I have never agreed with a single word the right hon. Gentleman has said.
The south-west growth charter calls for a new partnership between the south-west and central Government to achieve the goals agreed at the summit, which was attended by more than 200 people, more than 40 businesses, the CBI, the region’s two local enterprise partnerships, academic institutions and 14 local authorities from across the region. The summit was addressed by the Secretary of State for Communities and Local Government, who made an excellent speech that I know the Minister will replicate today. The Minister is a champion for progress, growth and prosperity. Indeed, he oozes them from every pore.
Despite our many successes and the beauty of our region, the south-west has not known the investment and prosperity of other parts of the United Kingdom in recent times—it falls below even the European Union average. What is more, the region has not always made itself heard with a clear, unified voice at Westminster, but we are open for business. We are looking for growth, and we want to build on the success of the northern powerhouse and the midlands engine. Today, we are setting out a positive vision for the south-west region.
The summit and the wider “Back the South West” campaign have shown a clear, unified business voice outlining a vision for the economic future of Cornwall, Devon and Somerset. The campaign has captured imaginations across our region and is a positive initiative from business, with strong support from local media. I always find that quoting local newspapers is a good way of getting in the local newspapers, and the front page of the Western Morning News on 3 October 2016 said:
“Clean beaches, sparkling seas and fresh air. The South West has it all. But while the natural beauty of the region is incomparable, its economy too often lags behind…given the tools, the South West can really fly”.
That is what this debate is all about.
A key part of the “Back the South West” campaign has been about creating a south-west narrative and speaking passionately at national level about why the south-west region is a wonderful place to live, work and do business. We are all immensely proud of our region, but we face challenges, particularly in light of the forthcoming Brexit. The local enterprise partnerships in our region are already showing how well they can work together to address those challenges and take opportunities.
Infrastructure investment needs and connectivity improvements were the overriding themes of the summit. To paraphrase a politician from years ago, we want to talk about three key things today: infrastructure, infrastructure, infrastructure. I remember going to India a few years ago with some Indian businesspeople, and they talked about the creativity of their people and all the resources and energy in that fabulous country. After the monsoons, they showed me roads that had been swept away and told me, “This is what holds us back in India. It is the infrastructure that we simply can’t manage to put in place.” I could say exactly the same thing about our region. All the creativity, the energy and the skills are there, but we need the infrastructure to get the job done.
We are all aware of the historical challenges in the south-west in relation to traditional infrastructure. For most of us, the key issue is the vital rail links to London and the rest of the country.
Neil Parish (Tiverton and Honiton) (Con)
I am delighted that my hon. Friend has secured this debate. We can do much more on the second rail link between Waterloo and Exeter to increase the number of trains and to add more loops so that we can get many more trains through to Exeter and further down into the west country. I would like a junction connecting the rail link to the trams at Seaton.
Mr Streeter
My hon. Friend is a powerful advocate for his region, and I know he speaks to the Government. I am sure he knows that, by sheer coincidence, the Peninsula Rail Task Force’s 20-year plan will be launched at 11 o’clock this morning. The plan will spell out the improvement we seek to our rail infrastructure, and it will include the measures he mentions to equip our region for the 21st century.
Road and air transport are critical too, but it is not only about traditional infrastructure; it is also about wider connectivity. Big strides have been taken as part of the Government’s push to increase digital connectivity, but more needs to be done. As Bill Martin, the editor of the Western Morning News, has said, the south-west is known as
“the region where every telephone conversation ends with the word ‘hello’.”
Digital connectivity is more important than ever in this 21st-century world, so making a success of the digitally enabled economy is critical, particularly for our region where peripherality is our challenge and connectivity is the solution. Now that people can do anything from anywhere and now that we have excellent universities in our region, connecting ourselves will continue to make us the most attractive and wonderful place to live, work and raise a family.
Rebecca Pow (Taunton Deane) (Con)
I thank my hon. Friend enormously for securing this important debate. Encompassing everything, does he agree that the south-west has been very much neglected and left out? The Government ignore us at their peril, because we could be a powerhouse not just for ourselves but for the country.
Mr Streeter
There is no question in my mind but that we have not seen the investment that we might have wanted from Governments of all colours over many years, particularly over the past 30 years. Now that we have come together to speak with a single powerful voice, I believe we will see that change. The Government are listening to us.
Jim Shannon (Strangford) (DUP)
On connectivity, the south-west can benefit from connectivity with the rest of the United Kingdom, including Northern Ireland, and Northern Ireland can also gain from connectivity with the south-west. There are potential advantages for both, including in the agri-food industries, fishing and tourism. Those are three things that we could do together. Does the hon. Gentleman agree that that is how we should do it?
Mr Streeter
We are delighted to work with anyone, and we are always delighted to welcome tourists from Northern Ireland who come to enjoy our wonderful south-west.
The Government need to recognise that European funding has contributed greatly to digital infrastructure in the past, and that a home-grown solution must be provided for the future. We need 5G. Tourism has been a key part of the local economy for many years, but it has also meant a lot of low-paid jobs. We in the south-west have core strengths. We are home to world-class universities including Exeter, Plymouth and Falmouth, and to highly skilled workers. Our response has been for businesses, local leaders and academic institutions to create successful business clusters and networks, such as marine around Plymouth, environment around Exeter, and aerospace and defence around Newquay. The clusters have played a key part in the hundreds of thousands of growing businesses across the aerospace, marine, technology and creative industries, helping the region attract and retain talent. However, we need to do more, and we need the infrastructure to support that growth.
We in the south-west have proved that we are successful. Pennon Group, which has taken the lead on the excellent charter, is born of the south-west and headquartered there, and operates across the whole region, in Cornwall, Devon, Somerset and now Dorset. It is one of the UK’s largest listed companies. There are many other success stories, and no doubt some of my hon. Friends will mention them in a moment.
One of the Secretary of State’s key messages at the summit was about devolution. I will touch on that, and I think that one or two other Members might want to mention it as well. He made it clear that if the south-west wants an ambitious devolution deal, it must accept a directly elected Mayor. His argument was that in other countries in the G7, large regions, particularly around big cities, have a lot more power than we in Britain have traditionally given to regions. Too many decisions in Britain are still made in Westminster when they should be made at local level, but local power is often too fragmented. To make sensible decisions on transport, skills and infrastructure, he argued, we need much more joined-up thinking and a proper combined authority, with one elected person shouldering the accountability.
That has given our region food for thought, and discussions are ongoing, but it seems clear that if we want the devolution deal that the region needs and deserves, we must find a way to deliver a western super-Mayor, a strategic leader—[Laughter.] Do you see what I did there? I have been working on that all night. Perhaps it is time we came together to do so. It is what the business community wants. However, there will be different views, and the conversation is ongoing.
The charter that we will deliver to Downing Street later today is not about going cap in hand to the Government; it is about saying that we in the south-west can do an awful lot for ourselves, but we need infrastructure support. The charter supports the Government’s industrial strategy and sets out how the Government can work with the south-west to increase investment and opportunities for people of all ages.
In the charter, the business community outlines its commitments to the region: to collaborate for growth; to invest in a self-sustaining south-west; to invest in innovation, industry and infrastructure; to invest in productive people and retain talent within our region; to invest in our environment and share the benefits of growth. What do we want the Government to do? We want a new Government partnership with the south-west, a firm focus on south-west growth in the Government’s industrial strategy and a funding road map so that the south-west can move from funding reliance to more innovative funding solutions.
We want investment in digital connectivity: ultrafast south-west, a new partnership with the private sector to deliver ultrafast south-west 5G mobile, fibre and wireless broadband to 90% of the population by 2030. We want investment in energy connectivity—switching on to opportunity—to address transmission and distribution restrictions on regional growth, to be completed by 2025, and a renewed focus by Ofgem, National Grid and Western Power Distribution. Crucially, we want investment in transport connectivity to get business moving. We want Government to back the Peninsula Rail Task Force’s long-term plan for rail improvements, which will be outlined in the report published later today, and to re-affirm commitments to road improvement projects in the pipeline, including the A303, the A30, the A38 and, as my hon. Friend the Member for North Devon (Peter Heaton-Jones) would undoubtedly agree, the A358.
As Chris Loughlin, chief executive of Pennon, said at the south-west growth summit:
“We should be able to get our voice heard. We are, after all, a political battleground. Elections are won and lost on how the south-west votes.”
On that, we all agree.
The south-west charter will be delivered to Downing Street later today. The timing could not be better: it is the day before the autumn statement. The south-west has made a profound contribution to this country throughout our history, and we have some very successful businesses in the region. It is a charter for growth; more than that, it is a charter for aspiration and hope for all in the south-west, but particularly the younger generation. Tomorrow, we will look to the Chancellor to re-commit to the south-west. Leaving the EU creates uncertainty, but also opportunity. The south-west is ready to deliver in the new partnership with the Government, provided that we receive the right commitments. That is the challenge for the Minister in this debate. Hinkley Point C, the third runway at Heathrow and High Speed 2 will all have a positive impact on the south-west, but we need more, and we need more infrastructure commitments specifically for the south-west.
It is not just about the autumn statement tomorrow; we are not going away. We will look to future budgets and the UK’s industrial strategy to position the south-west where it should be: not on the fringes, but at the centre of growth. Our two local enterprise partnerships are working hard together already, with valuable input from the business community, led by Pennon, to ensure that our proposals are developed. We need to add Government to that partnership.
To quote the Western Morning News for the third time—
Mr Streeter
It is a sure-fire thing. The Western Morning News said in its editorial last week:
“The government listens to those who speak loudly and logically and can make a good case. Too often, parts of the West Country have seemed to be pulling in different directions. Faced with petty rivalries, it has been easy for Ministers to dismiss the needs of our region and divert funds and support elsewhere.”
Not today. Here, the south-west is speaking with a united voice, led by the region’s business community and with far wider support from MPs and many in local government. There is clear momentum behind the campaign. I am delighted to throw my weight behind it, as are my colleagues from across Cornwall, Devon and Somerset, from both sides of this House. Together, we will raise south-west growth up the Government’s agenda and secure our region’s place in the new industrial strategy.
Several hon. Members rose—
Sir Roger Gale (in the Chair)
Order Looking around the room at the number of Members who wish to speak, I reckon that given 10 minutes for each of the Front-Bench speakers and a couple of minutes for Mr Streeter to wind up the debate, we probably have about four minutes a head. I do not normally do this, but I will on this occasion, because this debate has clearly and rightly attracted a lot of interest from south-west Members of Parliament: I will give the list and batting order. Mr Bradshaw will speak for the Opposition next. After that, we have Oliver Colvile, Johnny Mercer, James Heappey, Kevin Foster, Sir Hugo Swire, Peter Heaton-Jones, Anne-Marie Morris and Rebecca Pow. I will not impose a time limit; I will impose a self-denying ordinance, on the understanding that those at the end may drop off the list if other colleagues are too greedy.
Mr Ben Bradshaw (Exeter) (Lab)
I will try to adhere to that advice, Sir Roger, but as I am the sole Opposition MP in the region that we are discussing, it will be a challenge. I congratulate the hon. Member for South West Devon (Mr Streeter) on securing this debate, which as he said is timely because the autumn statement is tomorrow, and because once again, overnight, the south-west railway has been cut off by flooding.
I do not think that anyone can criticise the document that we are debating. It is an excellent document, and no one could find fault with it. However, the regular loss of our connectivity, which has happened yet again in the last 24 hours, is a more accurate reflection of the current reality on the ground than the vision that the charter rightly sets out for the future of the south-west. As the hon. Member for Taunton Deane (Rebecca Pow) said in an intervention, the reality is that we in the south-west feel neglected. When we look at all the investment going into London with Crossrail, the north of England with high-speed rail and all the other massive, multi-billion-pound infrastructure investments, we in the south-west feel like the poor relations. The electrification of the railway line to Bristol and south Wales has now been delayed, and even that will not come down to our part of the region, which needs it just as much.
We all remember the grandiose promises made before the last election. We could not move in the south-west, particularly after the Cornish rail collapse, for visiting Prime Ministers, Chancellors and Ministers promising £20 billion of investment in infrastructure in this Parliament. I remember the then Prime Minister saying that he would do whatever it took to put our infrastructure in a good condition, but we have seen very little of that investment so far. Some might even argue that those promises and all those visits helped to sweep an almost full house of Conservative MPs to power in our region, with Exeter the only surviving constituency with Opposition representation. My Conservative colleagues have a big responsibility. If I may give them a little gentle advice, at some stage they will have to play hardball with the Government and demand that the promises made to them before the election are actually fulfilled.
Rail infrastructure is not the only problem. The hon. Member for South West Devon has already mentioned broadband; our broadband roll-out in Devon and Somerset is badly behind schedule and the way it has been handled has been an absolute shambles. Broadband is vital in rural areas, particularly for our small and medium-sized enterprises. There is also an awful lot of uncertainty, as the hon. Gentleman said, about Brexit—particularly in Cornwall, given Cornwall’s reliance on huge economic support from the European Union. Sectors in our region such as farming and fisheries, which are disproportionately involved and engaged in importing and exporting within the single market, face big uncertainties. Our higher education sector is very dependent on the free movement of students and academics and on all the investment that our membership of the European Union brings. All that uncertainty, combined with historic under-investment in infrastructure, raises real concerns in our region.
To add insult to injury, we have learned that our local enterprise partnership in Devon and Somerset—Heart of the South West, which the hon. Member for South West Devon mentioned—has been told that it can expect only a tiny fraction of the money that it had originally hoped to receive in the next round of development support grants. That led to an unprecedented letter, which we all signed last week, to ask the Secretary of State for Communities and Local Government to think again—I cannot remember another time when every single MP in Devon and Somerset signed such a letter. As the hon. Gentleman said, it seems to be something to do with the fact that we do not have an elected Mayor model; we also have a shortage of big businesses to match-fund the Government money. That is stating the bleeding obvious, because our region’s strength is our small and medium-sized enterprises. We have some excellent big companies, but we do not have the large number of big companies that a northern powerhouse, or whatever, has.
I very much hope that the Chancellor’s autumn statement tomorrow will reflect some of the serious concerns expressed in this debate. I also hope that the Communities Secretary will look very carefully at our letter, because there is a lot of anger about how we in the south-west have been treated, and that anger will only get worse if our next growth funding deal is even worse than we expected or is a lot worse than the previous two. I congratulate the hon. Member for South West Devon again on securing the debate; it is well overdue, and I hope the Government are listening. Our region must get the investment that it needs. Sadly, that has been symbolised again in the last 24 hours by its being cut off by flooding.
Oliver Colvile (Plymouth, Sutton and Devonport) (Con)
Thank you for calling me to speak in this timely debate on the south-west regional growth fund, Sir Roger. I congratulate my hon. Friend the Member for South West Devon (Mr Streeter) on securing it.
I have been Member of Parliament for Plymouth, Sutton and Devonport for the last six and a half years. Uniquely for a Conservative constituency, it is an inner-city seat without a piece of countryside—all we have is the Ponderosa pony sanctuary and a rather muddy field. Although it has a low-wage and low-skills economy, it has a global reputation for marine science engineering research, a huge science base, two dynamic and expanding universities with more than 30,000 students and a very fine art college. I am grateful to the Government for the investment that Ministers have put into Plymouth, including the city deal in South Yard, which has also been turned into an enterprise zone. That city deal initiative will turn underused land in the dockyard into a marine industrial production campus, which will ensure that we can help the Government to deliver their industrial strategy and realise our full economic potential.
Although Plymouth’s economic future looks bright, it needs real help to develop its skills base and to improve its transport infrastructure connections. Earlier this autumn, the Ministry of Defence announced that the Royal Marines would be moved from Arbroath, Taunton and Chivenor. In 2020, Plymouth will host the commemorations for Mayflower 400, to celebrate the Mayflower ship leaving to found the American colonies—we might seek to invite the President to pay a visit to Plymouth, to see for himself how wonderful it is. Mayflower 400 will provide a unique opportunity for us to run a spectacular trade fair, just months after the UK withdraws from the European Union, but Plymouth and the surrounding area will need significantly improved train and road infrastructure to deliver that. The Government are reviewing the viability of reopening Plymouth City airport, which is in the constituency of my hon. Friend the Member for Plymouth, Moor View (Johnny Mercer). Later today, we will launch the Peninsula Rail Task Force report on the future of a sustainable railway line from the west country to London and the west midlands. There is also a proposal to convert the A303 and the A358 to dual carriageways.
The two local enterprise partnerships that affect Plymouth have submitted growth deal applications to continue the development of the South Yard city deal, which will create 1,500 new jobs, and the redevelopment of the railway station in my constituency. The latter is vital, because it will ensure that when American tourists visit the place that the founding fathers left from in 1620, they arrive in a dynamic city. By providing the necessary funds for the development of the railway station, the Government will help our local tourist industry; ensure that the increasing number of Royal Marines and Royal Navy sailors based in the Plymouth travel-to-work area arrive in a modern, up-to-date facility; remain good to their word by investing in modern infrastructure; support previous investments; and demonstrate that the people of Plymouth were right to elect a Conservative Government who deliver for the country and the south-west, which is playing its part in economic growth.
Johnny Mercer (Plymouth, Moor View) (Con)
Thank you for calling me to speak in this debate, Sir Roger. I would pay tribute to my hon. Friend the Member for South West Devon (Mr Streeter) for securing it, but time is short.
This debate is of supreme importance. I am afraid that I am going to use Plymouth as an example for the wider south-west. We all talk about investment in the south-west, but I want to put a bit of meat on the bones with some data and statistics. I know that statistics are frightening for some, but they are important.
Plymouth, like the rest of the south-west, is not talked about enough in this place, and the effects of that are clear to see. It was once an industrial powerhouse, centred on the dockyard, where tens of thousands of workers, welders, fabricators, shipbuilders and union shop stewards contributed more to the nation’s security and heritage than Plymouth is ever credited with. The military commitment, although diminished in numbers, as my hon. Friend the Member for Plymouth, Sutton and Devonport (Oliver Colvile) indicated, continues to this day—but Plymouth has always been much more than a military city. The harbour was used by merchant sailors for trade routes to London and all over the world, and transatlantic liners used to depart from Millbay.
There is a feeling in the streets and communities of Plymouth today that should be expressed in this place, which is that as the nature of the modern economy has changed and the nation’s focus on defence, rightly or wrongly, has declined, Plymouth has been forgotten—discarded after use. I therefore welcome the south-west growth charter, which lights a path back to a vision of better things. Hon. Members will all speak on different parts of it; in my short time, I will highlight infrastructure and Government spend in the south-west.
There is no doubt that infrastructure is the catalyst for growth. Regions in transition need a fair deal from the Government in all sectors. Every city’s representatives can come to Westminster and have a moan at the Government, but I want to put some evidence on record. I know that London is different, but the transport spend in Plymouth is £219 per head, compared with £1,869 in London. The public health spend is £47 per head, compared with a national average of £63. Despite being the most deprived area in the south-west, Plymouth is also the most underfunded. Why is so much less being spent on Plymothians? It is just not acceptable.
I am going to be slightly controversial, because I have my own views on why all that has happened. I know that all my colleagues agree that one of our main jobs in this place is to make the Government work for our constituents at the personal and local level. I have my own views on how well that has been done in the past. Locally, I never cease to be surprised by the elected officials in Plymouth; the manner in which they carry on contrasts sharply with the professionalism of the council staff, who work so hard for Plymouth.
One might say that as elected officials, elections are our appraisals from our bosses—the people. For many years now, at every election, local or national, the largest party has not been Labour or the Conservatives, or even the Lib Dems; it has always been the “don’t cares”—those who do not vote. The time for blaming those people for not voting has passed. It is time that we turned that argument on its head and recognised that we have to give people something to vote for, not chastise them for their lack of interest in us. Plymouth is an ambitious city, with gifted, ingenious people who can adapt to change like those in any other city, but Governments of all colours have simply not delivered for too many in our city, as evidenced in our elections.
That has to change, so what do we do? We have a unique opportunity in this Parliament: almost the entire region is represented by the Government party. The biggest, most determining factor in economic growth for a region far from economic engines such as London is transport links to enable big companies to get in and out of our region, thereby providing the skilled jobs and professional development that our ambitious and talented people deserve. We cannot, as a cohort, continue to support the Government unequivocally without genuine “spade in the ground” investment in our transport infrastructure. It is unacceptable for a region so large, diverse and productive as ours to be expected to survive on the rail link we currently have, irrespective of the Government’s plans elsewhere. I strongly congratulate the peninsula Rail Task Force on its report into rectifying the situation. I urge the Prime Minister and her team to read it very carefully indeed before committing to further investment elsewhere in the country.
Politics is a team game, and it works both ways—not only from us to the Government but from the Government to us. I support the Prime Minister in everything she does, as do my colleagues, but our commitment to making the Government work for people in the south-west must trump everything else. I firmly believe that this Conservative Government have done more for our region of late than has ever been done before, but we must let it be known that if the line is crossed we will hold firm and hold together as a cohort to put our region first; otherwise, we will continue the degradation of politics that we are all so keen to avoid.
It is not all bad by any stretch. The jobs lag from a dockyard that employed 35,000 workers in its heyday, but employs 3,500 today, has been filled by enterprising, determined Plymothians who have created a buzzing local economy that just needs a bit more help from central Government. Similarly, when it comes to central Government there can be no doubt that the single biggest factor in improving the life chances of our constituents is a job, and under this Government unemployment has halved since 2010. But we must not take our foot off the gas. The south-west growth agenda is key to our prosperity.
James Heappey (Wells) (Con)
I, too, congratulate my hon. Friend the Member for South West Devon (Mr Streeter) on securing this important debate.
There are six networks that drive productivity, not only in our region but nationally, and they are the air, road, rail, broadband, mobile and energy networks. I am afraid that in the south-west there is under-investment in them all. Bristol airport, which serves the region, has been growing at a great pace in recent years, but we need to ensure that it is better connected southwards so that is can serve the region that it is intended to serve.
Road improvements are coming along nicely, but the work on the A303 and the A358 needs to happen with some urgency. We must also be aware that, as we do that work, we risk making Somerset the rock in the stream, around which the M4 and M5 to our north and west, and the A303 and A358 to our south, move quickly while Somerset remains disconnected.
I encourage the Minister to support the work of my hon. Friends the Members for Bath (Ben Howlett) and for North East Somerset (Mr Rees-Mogg), who are campaigning for better access to north-east Somerset from the M4 to improve connectivity in the north-east of the region, and the ongoing work to support Hinkley Point by improving junction 23 of the M5 to allow better connectivity not only to Hinkley Point but into Mendip. We must ensure that, as we improve the main roads in our region, we do not simply make Somerset the unconnected rock in the stream around which everything moves quickly.
Yesterday, our region was once again cut off. The railway line between Bristol and Taunton was under water, causing huge disruption, not only for Members of Parliament returning to the House after the weekend but for the region as a whole, which feels awfully remote when water is on the tracks and nobody can get to us. It was Dawlish before; yesterday, it was the line through Somerset.
My hon. Friend the Member for Bristol North West (Charlotte Leslie) is leading a debate in Westminster Hall this afternoon on the electrification of the great western railway to Bristol Temple Meads, so I shall not go into that now, other than to say that it is of course not just the electrification of those last eight miles between Bath Spa and Bristol Temple Meads that affects our region so much. Electrification is required in the Thames valley to release the rolling stock that is supposed to come from the Thames valley to serve the Bristol and Bath commuter network, which will in turn release the rolling stock that is supposed to go down to Devon and Cornwall to serve the Plymouth and Exeter networks. The delay to electrification has a real effect, not only in the west country but in the Thames valley. It is needed to increase capacity for commuters in our region. Most of all, it is a shame that the electrification of the great western railway, which we as a region thought was in the bag, now finds itself in competition with the excellent work of the Peninsula Rail Task Force.
On broadband and mobile, I absolutely agree with the growth charter that says that we must go for 90% connectivity by fibre for premises and that we should go for 5G. Let us not forget, though, that right now more than 10% of Devon and Somerset do not have access to a superfast connection at all, and much of the region has connection speeds that are down around 2 Mbps or less. Our mobile phone connectivity is improving, but there are still far too many notspots, so there is work to be done before we embark on the more ambitious targets for the future.
We are a decentralised region with no obvious economic focal point, so it follows that there is no obvious focus for energy generation. I think that, as a region, we are the nation’s leader in the deployment of renewables, but we require real investment in our distribution and transmission systems to support that sort of energy system. The Minister should take note that there is also an opportunity for renewable energy, clean tech and new nuclear to be part of the industrial strategy for the south-west.
The south-west has a great deal to offer, with great universities, including the University of Bristol, the University of the West of England, the University of Bath and Bath Spa University, and great expertise, ambition and potential. We just need to be better connected by air, road, rail, fibre, mobile and electricity wire.
Kevin Foster (Torbay) (Con)
It is a pleasure to serve under your chairmanship, Sir Roger, and to congratulate my hon. Friend the Member for South West Devon (Mr Streeter) on securing the debate. It is a perfect day for this debate—a day when we again see pictures of hanging tracks in the south-west, demonstrating how important links have been cut off. It is a delicious irony that members of the Peninsula Rail Task Force, which has been referred to a lot, had to drive to Reading last night in order to get here to present a report on rail resilience. Why did they have to drive to Reading? Because of a lack of rail resilience. On top of that, my hon. Friend the Member for St Ives (Derek Thomas) and I had charming experiences yesterday: I had an 11-hour journey from Torquay to the House, and his journey was significantly longer.
We could make the debate all about rather negative descriptions of the well-known issues with our transport network, but we could also be positive about the opportunities available and what is already going on. On Thursday last week, the Western Morning News published an opinion piece on how the south-west should unite to build on a charter for investment and infrastructure. On the very same page there were details of the work being done by four local colleges that have come together to expand their opportunities and help to support tech businesses. The article, written by the principal of South Devon College, Stephen Criddle, gives details of the world-class high-tech and digital innovation centre being created for the photonics industry, which has a long history in Torbay.
Before I address what I think the Government should be doing, it is important to look at what we can do ourselves. We clearly need to ensure we have the skills for businesses, because there is little point in creating jobs and opportunities if we do not have people with the skills—particularly in science, technology, engineering and maths—to take them up. There are also well-known shortages of skills and professionals in our health and social care industries. We need to look at what can be done at local authority level. I welcome the fact that my local council has put £50 million into a growth fund. I must say it makes the £15 million that is potentially going to be assigned to the local enterprise partnership look rather small when Torbay Council on its own is planning a fund of around £50 million.
It is welcome that that money is being used and—without giving away some of the details that perhaps would not be appropriate to share publicly—it has been encouraging to speak with the Torbay Development Agency and the council about the ways in which some of that public investment might be used to unlock schemes that we have been waiting some time for, not least in our town centres in both Torquay and Paignton.
Transport infrastructure makes a huge difference. We have had the welcome investment of the Kingskerswell bypass, which serves my constituency and goes through the constituency of my hon. Friend the Member for Newton Abbot (Anne Marie Morris), after the small matter of a 61-year wait since it was first proposed. That delay also brings home why it is so important that we get on with some of these projects. We have issues such as Stonehenge that are almost as long-standing. The debates around Dawlish, which began in the 1930s and were delayed by world war two, are still going. Also, once decisions are made, we need to crack on and deliver what we can.
Also, it is important not only to look at the tracks but to have trains running over them. While we are debating rail resilience, at the same time I have CrossCountry Trains trying to axe most of their services to my constituency. We need the tracks and the services running over them.
I am conscious both of the time and that other colleagues wish to speak. I hope to see more investment in broadband speeds, but the key message that I would join others in giving is that we now have a united voice in the south-west, including, to be fair, the support of our sole Opposition representative, the right hon. Member for Exeter (Mr Bradshaw). We do not have some of the petty rivalries that we saw in the past. That is why it is important for the Government to back the plans that are coming forth from the region, which will deliver not only for the south-west but for the country as a whole.
Sir Hugo Swire (East Devon) (Con)
I congratulate my hon. Friend the Member for South West Devon (Mr Streeter) on securing this timely debate. It is the latest in a series of debates on the south-west and it is fantastic to hear so many colleagues speaking with one voice about our area.
I welcome the south-west growth charter, which originated, as we have heard, at the south west growth summit at Exeter University. I was able to attend part of that summit and I congratulate Pennon, the CBI and the Western Morning News on putting it together. Too often, we have not spoken as one voice in the south-west; the time to do so is now.
It is no secret that the south-west has lost out in terms of infrastructure investment in comparison with other areas. I just say gently to the right hon. Member for Exeter (Mr Bradshaw), who talked about successive periods of under-funding, that he was a member of a Labour Government that did nothing for the south-west for 13 years. Nevertheless, it is true to say that during those years, and before, we have suffered from under-investment. One example is that during the past 20 years transport spending in the south-west has averaged £35 a head compared with a national average of £98 a head, which has left the region £2 billion behind other areas. That has been a wasted opportunity, considering the vast economic potential of the area.
To take my own constituency of East Devon as an example, just a week or so ago I was at Exeter science park to look at the new £97 million Met Office supercomputer, which will make Exeter and the surrounding area a world-class place to do science. There is also the brand new and growing community of Cranbrook, just near Exeter airport, which offers another fantastic opportunity for local growth. As for Exeter airport itself, I very much hope that the Chancellor will say something about air passenger duty, which discriminates against Flybe, which operates out of the airport.
The south-west has huge connectivity, not least to Northern Ireland. When I was Minister of State for Northern Ireland, I used to fly regularly from Exeter to Belfast. I must say that the south-west welcomes tourists, of course, not least—I am pleased to say that I was in some way involved with this—the First Minister of Northern Ireland, who has holidayed in Cornwall in the past few years and who enjoyed herself there very much indeed.
I welcome Government plans to dual and upgrade the A30 and the A303. This is a much-needed and overdue upgrade that should have been carried out decades ago. I regret that there is still a question over some of the funding for this project; that question needs to be urgently resolved. Personally, I am disappointed that full dualling of this stretch of the road has been ruled out. I believe that a half-baked compromise will give the impression, once again, that the south-west is forgotten when it comes to infrastructure investment.
I give wholehearted support to the work of the Peninsula Rail Task Force. We have heard about the timely announcement today; it is also an appropriate announcement, in a sense, given the problems we are experiencing today as a result of all trains from Exeter to Taunton being either delayed or cancelled. That underscores, yet again, the need for greater resilience, faster journey times, more capacity and connectivity. These are absolutely the right priorities.
I also agree with the right hon. Member for Exeter that too often over the years when we have heard about investment in the “south-west”, people are talking about Bristol. However, some of us in the Chamber mean Exeter, Plymouth, Penzance and so forth, and we would like to see some of the money that is going to the north of England to unlock the northern powerhouse and to provide HS2 being used instead for small projects in our area. For instance, I support Devon County Council’s bid to the new stations fund for a new station at Marsh Barton, in the right hon. Gentleman’s constituency, which will make it much easier for constituents in East Devon and so forth to travel into and around Exeter and the surrounding area.
On broadband, we have had some leaked announcements, or some possible announcements, coming out of the autumn statement that we will have more money for connectivity and broadband. Again, we cannot argue for that too much in the south-west; it is absolutely a priority. Curiously, it is the more urban parts of East Devon, such as the Exeter suburb of Newcourt, that often have the worst internet speeds in the area, so improving connectivity and broadband is absolutely key.
As for the growth deal funding, considering the historic underfunding and the future potential of the south-west, it is disappointing—to say the least—that the provisional growth deal award is set to be so low. The Heart of the South West local enterprise partnership put together a £109 million growth deal that contained 26 projects, including investment in superfast broadband. The provisional allocation of £15 million to £20 million is nowhere near sufficient and the Government need to go away and look at this issue.
As the right hon. Member for Exeter reminded me, it was the south-west Members of Parliament who delivered a victory for the Conservative party in 2015. So, we are owed for the victory that led to the formation of a Conservative Government. We had a manifesto for the south-west and at the next election in 2020 we should feel proud to be held to account for the commitments that each and every one of us stood on. At the moment, we have made a start, but we are by no means there. Nevertheless, this debate today represents a good move in the right direction.
Peter Heaton-Jones (North Devon) (Con)
I, too, congratulate my hon. Friend the Member for South West Devon (Mr Streeter) on securing this very important debate. He made a clear statement and the phrase that sprang out for me was that we do not come here today with a “begging bowl”. Indeed we do not, but, as other Members have said, it would be remiss of us if we did not point out that for many years, and under Governments of all colours, the south-west has not received its fair share of investment. We need to put that right.
The reason is that, as this charter for growth shows very clearly indeed, the south-west is a vibrant and dynamic place to do business. The south-west has a very bright economic future and that was very much the feeling at the south west growth summit on 21 October in Exeter. That is also very much the feeling in my part of the south-west—North Devon.
This issue is all about setting out how the Government can work with the region to increase investment, productivity and economic opportunities. I must stress that it is about working together; this is a partnership. In the south-west, including in North Devon, there are brilliant and resourceful businesses, public authorities and third sector organisations bursting with ideas, which make the south-west a magnet for investment. However, to release all of that potential and to make things happen, we need investment in our infrastructure, as colleagues have said only too clearly.
For me, the key is one word and that is “connectivity”. My hon. Friend the Member for South West Devon and other colleagues have mentioned the roads that need to be vastly improved: the A303; the A30; and the A358. Also, I am sure that my hon. Friend also meant to mention the A361, which is the North Devon link road and the vital link between the M5 and North Devon. The former Prime Minister, David Cameron, once accused me of “banging on” about that road, which was a charge I was absolutely proud to plead guilty to. We must have investment in the North Devon link road.
Another issue is the resilience of our rail network. All the various newspapers have been mentioned—I am sure that the story is also in the North Devon Journal this morning—and they have pointed out that the rail links to the south-west are pretty much cut off this morning. That is something up with which we must not put.
On broadband, we hear that there is talk of investment in “hyper-speed” broadband. I have to say that in some parts of North Devon we have “no-speed” broadband at the moment. So let us at least get the car on the road before we push down the accelerator pedal.
Industrial strategy is also important. My right hon. Friend the Prime Minister made some very welcome remarks about industrial strategy yesterday and I hope we will hear some more about it in the autumn statement tomorrow.
It is reckoned by those who put together the south-west growth strategy that properly investing in our region’s connectivity could give gross valued-added economic benefits of £41.6 billion and create 22,000 jobs, and there could be extra economic benefits in things such as tourism and financial services of another £21 billion on top of that. It should not be a matter of whether we like the growth idea but of when we make the necessary moves to ensure that the south-west can grow in the way the document foresees. Yes, we want our fair share of Government investment, and the charter for growth shows that we are more than ready, willing and able to use that investment potentially to create a regional economy like no other. We are like a coiled spring, ready to unleash all that economic energy. I say, “Give us that chance. Northern powerhouse, you ain’t seen nothing yet”.
Anne Marie Morris (Newton Abbot) (Con)
Today we ask the Government for support. We ask for support for the south-west charter for growth. We speak with one voice—businesses, politicians, the community. As my hon. Friend the Member for North Devon (Peter Heaton-Jones) said, we have huge, untapped potential. The figures need to be written in stone. The potential is there, yet we are the second-lowest funded region in the country. We could do so much better.
One of the challenges is that our economy is not well understood. People look at the south-west and think of us as a sleepy farming community or sleepy fishing community. That is completely wrong. Farming and fishing are very important. We feed the country; we have £2.7 billion turnover from our farming. As for tourism, we are the second most visited area after London, with 19% of those who come to this country coming to the south-west. So we have own powerhouse, thank you very much, but our potential must not be forgotten. Our marine sector represents a fifth of the UK’s marine sector. That is not small beer. We are a nuclear industry leader and we have the UK’s first nuclear industrial cluster. We have the brains. We have the power, and we want to be able to unleash it. In aerospace and advanced engineering we have 14 of the 15 top companies, plus 900 smaller supply chain companies. Some of the larger ones—for example, Centrax Industries and Centek Group—and some smaller ones, including Teignbridge Propellers, are in my constituency.
We are the south-west engine. We want a partnership with Government to build an industrial strategy to deliver productivity, not just for the south-west but for UK plc. We will collaborate. We will invest together. This is not just putting out a begging bowl to the Government. We will invest, train and retain. There is an increasing number of young people in our community and many young people come through our first-class education system and universities, so it simply is not true that the south-west is full of those who have retired. But we need the Government’s commitment to the south-west. We need, as my colleagues have argued, money going into road and rail. We need support for the Peninsula Rail Task Force report that will be released later today, and we must not forget the airports and the ports. They are very important.
The digital connectivity issue can never be under-estimated, and although I am sure I could spend the rest of my four minutes talking about it, the points have already been clearly made. Without mobile, without broadband, we simply cannot unleash the potential. The point about energy connectivity is right. We lead in renewables but we do not have a joined-up system, and that is preventing inward investment.
The south-west engine has the third-highest number of businesses in the UK behind London and the south-east, so we should not be underestimated. We have the most untapped potential but for that investment from the Government, and we, as local businesses, are prepared to play our part. We have huge investment potential. I echo my hon. Friend the Member for North Devon: dream on northern powerhouse, the engine is here in the south-west.
Rebecca Pow (Taunton Deane) (Con)
I feel like I ought to go like a train, Sir Roger, in the time limit, but not like the trains that were running out of the south-west yesterday, which were not going at all. I sometimes feel like I am the Boadicea of the north of the south-west region, and that my hon. Friend the Member for South West Devon (Mr Streeter), who so gallantly brought this debate to the House, is like the Alan Sugar of the south of the region, but in between, we have a myriad of talent. We are a talented force and we are joining forces and working together for our region.
We should not be underestimated. As my right hon. Friend the Member for East Devon (Sir Hugo Swire) said, the south-west Conservative MPs won the election—to get political about it. There are 51 of us and we should not be underestimated. We came into this House on a manifesto promise to increase productivity in the south-west, and we are determined to do that but we cannot do it without the right framework behind us. We already have so much going in the south-west; we are achieving a lot. We have a lot of top-quality businesses and companies, but we could do more with the right framework, so I urge the Minister to listen and not to take us for granted.
One must always have a plan and a strategy, and we do. We have the south-west growth charter, and we also have our local enterprise partnerships working. We have a really solid framework from which to work. We are not working individually—although we all have our individual bids—but as a team, particularly on infrastructure and our particular asks.
In the time I have I will focus on just a couple of areas: skills and infrastructure. As I said, we already have some top-quality companies in my constituency. I must mention the Claims Consortium Group, with its Investors in People gold standard, the Ministry of Cake, Peter Brett Associates, Albert Goodman, Francis Clark, and Viridor, which is under the Pennon banner. There are so many of them, all doing great work, but they could all do more. So often, we find it difficult to attract the right talent and keep it in our region, and that is something we need to concentrate on. I applaud the Government’s apprenticeship scheme—I think it will work well—but we need to work more. I have the first nuclear apprenticeship degree in my constituency, being run through Bridgwater and Taunton College, and, as has been said, we need to build on the nuclear strength we have in the south-west.
We need to build on health, aerospace, textiles and marine —the things we are really good at and strong in already—but it is important that we work with the region as part of the Government’s industrial strategy. We must ensure that we do not miss out on any designations that are being handed out under the strategy outlined in the Green Paper. We need to be part of the bidding process but we need to win, and we must not be hampered if we do not happen to have signed a devolution deal yet. We are already doing good work and we must not be hampered, or even penalised.
I will just mention AgustaWestland, as many people who live in my constituency work there. I had a very good meeting with the company. It employs 17,500 people across the south-west. It particularly urges innovation and investment in science and technology, with which I think we would all agree.
Rebecca Pow
I will give way to my hon. Friend, because the company is in his constituency.
Marcus Fysh
Yes, that is a wonderful industry and we need to focus on it and raise its skill levels. Investing in infrastructure is absolutely fundamental to what we are trying to achieve in the area.
Rebecca Pow
My hon. Friend is right. The company stressed to me that it is not just about wanting engineers to build helicopters but about attracting young people into the area to be those engineers. The industry is inspirational and is going somewhere. We need the seed-corn money from business, and grants for medium and small companies so that they can start to do research in that field. We can do that in the south-west; we can build on it and we can all take advantage of it.
I just want to throw in that we need a university. We are warm-hearted in Somerset, but we are a cold spot where academia is concerned. I would like to speak to the Minister about how we ease the numbers game so that we can apply to be a university.
I will sum up on the infrastructure note. We all agree that we have lots of ideas but the Minister needs to bring it on. We want to see the spades in the ground. I want to see the A358 come to fruition before the next election. We have to have junction 25 upgraded, we have to have the A303, and we have to have the road to Barnstaple done. They all work together. I ask the Minister to put some money back into growth deal 3. It was almost in the bag, but the bag seems to have been opened and the money has been let out. Please can we have that, devolution or no devolution?
We can do it in the south-west. Give us the tools and we will deliver, but do not destroy our beautiful environments at the same time. We are a spectacularly stunning region. We can make the economy work but we can also make it work in a glorious environment.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
It is a pleasure to serve under your chairmanship, Sir Roger. I, too, congratulate the hon. Member for South West Devon (Mr Streeter) on securing this debate. Owing to lack of time, I will not be able to reflect on all hon. Members’ contributions, which were extremely powerful in sending a message—I am sure the Minister received it—about the importance of the south-west and industry in the south-west. I want to reassure the hon. Gentleman that I do not see the south-west as a sleepy area. I am an MP for the north-east, which some may think is as far away from the south-west as one can get geographically, but in the north-east we are very fond of and admire the south-west. We share a history of mining and agriculture, as well as railways and great engineers, as other Members have mentioned.
The south-west has huge success stories, from the scientists of the Eden project to the engineers of the SC Group and AgustaWestland and the wine producers of the Campbell Valley. We would see such projects thrive if the Government sought fully to unleash the capabilities of all the regions of our United Kingdom. The charter for growth is a key step in achieving that. It is an opportunity for the Government to deliver on their promises, as has been pointed out by hon. Members, particularly by my right hon. Friend the Member for Exeter (Mr Bradshaw).
We could say that, before the election, the Conservative party issued letters of promise for investment in the south-west to be redeemed after the election, but they have yet to be redeemed, as is clear from the contributions so far. I look forward to the Minister setting out how he will make right on the promises so freely given before the election.
Mr Bradshaw
One of the welcome differences with the current Prime Minister was an apparent willingness to invest more in infrastructure based on borrowing, which had been a long-time Labour policy. Does my hon. Friend agree that tomorrow will be a test of whether she was serious about that?
Chi Onwurah
I thank my right hon. Friend for that intervention. It is absolutely clear that the economic failure of the previous Government to recognise the importance of counter-cyclical state investment has been rejected—in words at least—by the current Government. We will see tomorrow whether that rejection is made solid.
The previous Government’s abolition of the regional development agencies, which supported growth outside London, exacerbated the problem. Growth in the regions of the UK, particularly the south-west, faced economic hardship from austerity, particularly in the way in which it drained demand and reduced income for those in the public and private sectors. The Government have an opportunity to address those failings. I understand the sense of disappointment expressed by many MPs about the current indications that the local LEP will be materially disadvantaged in terms of regional funding because it does not have an elected mayor model. Now is the time for the Government to show they recognise that regions can achieve greatly without necessarily having a big man, a mayor, to meet the Government’s requirements.
The need for the charter is urgent. The south-west received €1.5 billion from the European structural funds throughout the 2014 to 2020 funding cycle and that stimulates development in the region. In fact, the south-west received the second highest amount of money from the European Union, second only to nearby Wales. Business in the area must be concerned about the Government’s toxic combination of indecision, doubt and confusion about Brexit. A commitment to a growth charter would be the first step in providing some answers for companies in the south-west.
Investment in physical infrastructure is one of the very important points in the charter. I must say I admire and respect the south-western Members of Parliament for making it to Parliament today, given the extraordinary lengths that some had to go to to make the journey from the south-west. For proper investment, we need long-term patient funding rather than the current short-term free market approach. For example, as has been mentioned, the A303, A30 and A358 corridor between Taunton, Honiton and Amesbury is key to reducing journey times to markets, promoting the inward investment that will help make the south-west’s economy more self-sustaining, as well as strengthening the already vibrant tourism in the area.
As hon. Members have said, rail links are equally important. The 20-year plan will bring jobs and growth to the region, as well as faster connections to the London airports. Businesses in the south-west should have better access to Bristol, London and the midlands, as well as to Heathrow and Gatwick. Rail links are key not just to link the south-west to other English economic hubs, but to support British industry and manufacturing. This investment should be brought forward and considered a priority. How will the Minister ensure that the Infrastructure Commission is independent and fully funded to make the much needed investment in our regional infrastructure?
However, physical infrastructure is not the whole story. As Member after Member has pointed out, in the face of the fourth industrial revolution, digital connectivity is just as important, so the plan for an ultra-fast south-west is welcome. The Labour Government left office with fully costed plans for universal broadband by 2012. As has been said today, we still have many businesses and individuals who cannot even get access to broadband speeds of 2 megabits, never mind the ultra-high speed mentioned in the announcements made today; and the universal service obligation is still four years away.
The European Union investment that was so welcome in Cornwall will not be available post-Brexit, and yet Ofcom researchers showed that in rural areas 48% of premises are unable to receive speeds above 10 megabits. I look forward to the Minister saying specifically how his Government will invest in rural broadband.
James Heappey
The shadow Minister is obviously aware of the speech delivered by the then Prime Minister and Chancellor in January last year setting out the long-term economic plan for our region. Her speech today has reflected that Conservative vision for our region. Should we assume she supports it?
Chi Onwurah
I thank the hon. Gentleman for that intervention. I support regional economies that are strong and sustainable, where investment is in people, skills and infrastructure. I support economies that deliver high-quality jobs that enable his constituents to make plans for their own futures, rather than being at the whim of short-term, zero-hour, low-skill, low-value jobs. That is the vision for the future economy of the south-west, and indeed for the country, that I wholeheartedly support.
I look forward to the Minister setting out exactly what his industrial strategy is. The Prime Minister has created a Department with industrial strategy in its title—I have yet to hear what the strategy is. The Prime Minister’s speech yesterday did not set out how the Government will, for example crowd in investment from the private sector in innovation, new opportunities and skills. As a Member of Parliament for the north-east, I too regret the skills brain drain from our regions to the capital because of its stronger economy.
I particularly look forward to the Minister setting out how the Government’s industrial strategy is not simply an ever-growing reduction in corporation tax but one that takes our whole country with it to invest in increased industry, shifting the centre of gravity away from London to support our great regions, such as the south-west. The south-west growth charter is to be welcomed. I look forward to the Minister demonstrating that he will support its implementation.
Sir Roger Gale (in the Chair)
Order. Before I call the Minister, due to the incredible self-discipline exercised by colleagues, we have a reasonable amount of time. I congratulate you all on achieving that. We have called 13 Members in one form or another in addition to the Front-Bench spokespeople. I regard that as exceptional. Without wishing to incite insurrection, that does mean that the Minister will therefore probably be able to take interventions and still allow time for Mr Streeter to respond at the end of the debate.
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Jesse Norman)
Thank you, Sir Roger, for that incendiary opening remark. It is a pleasure to serve under your chairmanship and it is an absolute delight to take part in such a generally wise, good-natured, warm and constructive debate. It is a particular delight for me to look round Westminster Hall and see the serried ranks of Conservative MPs from the south-west, and even the conservative Member from the Opposition, the excellent right hon. Member for Exeter (Mr Bradshaw), who in so many ways shares so many of our inclinations.
I congratulate my hon. Friend the Member for South West Devon (Mr Streeter) for calling this debate on a very important area and set of issues. We have already heard reference to Boadicea and Sir Alan Sugar from my hon. Friend the Member for Taunton Deane (Rebecca Pow), but I like to think of my hon. Friend the Member for South West Devon as a kind of Abraham—a patriarch of the south-west, bringing his wisdom to bear and providing moral and spiritual, as well as parliamentary, leadership.
We have heard some excellent contributions. Not everyone is still in their place for reasons we perfectly understand. I have heard strong support for the area, the skills and the genius of the south-west; concern about infrastructure and connectivity; recognition of the Government’s achievements to date; and a desire for Government to step forward and do more. I will not run through all of the excellent contributions we have heard, Sir Roger. It is testimony to your brilliant chairmanship that the imposition of a self-denying ordinance, an interesting contradiction in terms, has had the excellent effect of enlisting so many outstanding and brief contributions.
Let me just point to one or two wider considerations in response to the hon. Member for Newcastle upon Tyne Central (Chi Onwurah) and pick out some aspects of the industrial strategy, before turning to where we are with the south-west. It is fair to say that there is not a Member of this House who does not believe in the importance of economic growth. If there are any, let us invite them to consider the alternative, which is not only painful but regressive. Economic growth is a very important part of our lives and is likely to always remain so. It is also important to attend to the kind of growth that that implies, which is not always the same. We have seen boom and bust over the last few years nationally and that is not attractive. What we are looking for, and what I know colleagues across the south-west are looking for, is a sustainable basis for long-term economic development—and rightly so. That must be development that enhances the genius of the people involved to create higher productivity and greater real wealth.
If we look at the industrial strategy, the hon. Member for Newcastle upon Tyne Central suggested that somehow it is some great failure. The Government have talked about industrial strategy almost continuously since they were appointed and are undertaking a very careful, considered process of framing a consultation document to be launched in the next few weeks, which will invite every section of our society, not just businesses and corporations, to contribute and reflect on what could be the source of that long-term economic growth.
Rebecca Pow
On my point about AgustaWestland and other businesses, will the Minister ensure that we are investing enough money in business-oriented innovation and science, so that we can build a solid future, not a one-off industrial strategy, for our young people in particular?
Jesse Norman
It would, I think, be injudicious of me to anticipate announcements to be made over the next few days and, in some cases, already trailed. There has certainly been widespread speculation in the press about great support for research and innovation, including the development and technology side of the equation. We have already seen that. The structure of the Government being focused on trying to concert better relationships between sources of research, be they industrial or commercial, and the development and commercialisation of those technologies, makes that very clear. We will see a lot more of that over the next few weeks.
Mr Bradshaw
The Minister talks about the Government bringing forward a consultation document. We do not need a consultation document. That is what Governments say when they are going to do absolutely nothing and kick something into the long grass. Clear and specific promises were made by the Conservative party in the run-up to the last general election, with money behind them, which all the Conservative MPs speaking in the debate today have referenced. When will those promises be delivered? Where is the plan to deliver them?
Jesse Norman
I detect a slight faux indignation on the other side, and I am sorry about that. The industrial strategy of this country is a serious, long-term matter. It needs to be agreed in a bipartisan spirit. It needs to include the whole country, including the devolved Administrations and nations. It is not something to be decided and cut off. That, if I may say, is an expression of Blairite, Napoleonic Government. We are looking for a consensus and a stable basis for future development, which can be shared by all and can survive a change of Government—it is essentially long term in character.
An industrial strategy has been attempted at various points in our past in this country, not always with great success. In the 1940s and 1950s, we had models of industrialisation based on the armed forces and people in Whitehall yanking levers that steered the ship of state. We had the corporatism of the 1970s. I suspect that we are looking to something somewhat different. If hon. Members doubt the necessity, let me remind them of two things. First, those who say they do not have an industrial strategy almost invariably have one without knowing it. Secondly, no company or charitable organisation would dream of attempting to take money from investors or donors and use it over a period of time without having a strategy for how to do so. Nor should the Government.
Neil Parish
I am encouraged by that, but is part of the strategy broadband? When we talk about superfast and extra-superfast, can we make sure that the rural areas of this country are connected with some form of broadband?
Jesse Norman
As my hon. Friend understands, I am not the Minister for Culture, Media and Support. He also knows that when I was Chair of the Culture, Media and Sport Committee, I took an active interest in that issue, and we commissioned a very reputable report from a group of academics and industry experts, which found, among other things, that BT Openreach was under-investing in its network by hundreds of millions of pounds a year. It was accretive to investors and was not down to its cost of capital. I do not want to speculate on the reasons for that, but its effect has been massively to penalise people—particularly those in rural areas. I am sure my hon. Friend supports today’s announcement of a new fund to support other players in fibre through balance sheet-matched funding, which will enable fibre roll-out, particularly in rural and suburban areas, to proceed much faster than hitherto. That is a very welcome development.
James Heappey
The Minister is being very generous in giving way, and I am grateful. The long-term economic plan, to which I referred during the shadow Minister’s speech, was delivered 18 months or so ago. In its analysis of the region’s infrastructure and our sectoral opportunities, it is not a thousand miles away from an industrial strategy. Will the Minister commit to making that long-term economic plan, which was delivered by the previous Prime Minister and Chancellor, the foundation for his industrial strategy for our region? Our region widely welcomed it at the ballot box.
Jesse Norman
The idea is not to slow the process of investment—as has been recognised today, there has been considerable investment across the south-west, in the form of city deals, enterprise zones, expansions and local growth funding—but to incorporate it within a more nuanced national consensus about what the future will look like, out of which we should get a shared view of how the south-west and other parts of the economy can grow.
I draw my hon. Friend’s attention to the Prime Minister’s early words: she pointed out that there are no privileged areas of the country. Some might have had deals in the past, on the basis of areas coming together, but that model can be embraced by everyone. One of the interesting things about this debate is that the unity of Members of Parliament is so evident, but it is not absolutely evident that that unity is shared all the way down the tree of local government. It might be worth reflecting on whether that might have an impact on the region’s long-term development.
Sir Hugo Swire
My hon. Friend the Minister is doing a magnificent job at a time when it is impossible to get from Exeter, the capital city of Devon, to London because we have no trains. Can he communicate our frustration to the Government? If that were the case on the lines from Leeds to London, from Bradford to London, or from Manchester to London, there would be merry hell. We will not continue to put up with this sort of neglect for much longer.
Jesse Norman
I welcome my right hon. Friend’s point. I need not say it myself, because he did so much more eloquently than I could. I recognise the issue that he and my hon. Friend the Member for Torbay (Kevin Foster) referred to, which was mentioned in the Peninsula Rail Task Force report, and on which campaign work has been done. I congratulate them on that.
I am conscious of the passage of time, notwithstanding your incendiary words, Sir Roger, so let me proceed. The key themes of the industrial strategy will be those that have been flagged up in this debate. There will be an emphasis on sectors, the commercialisation of research and development, and innovation, and there will be a particular focus on infrastructure, skills and abilities, and the embedded institutions in particular regions. Those issues have been brought out very well today.
As the hon. Member for South West Devon said, this is a relatively tightly defined debate in terms of place, but an industrial strategy has to reflect the fact that places are very different from one another. Defining what the south-west is and where it ends can be a challenge for the Government, even if it is not a challenge for those who live there. It is an extraordinarily diverse, beautiful region, which has extraordinary assets to be cherished and developed. It is home to world-class universities, very skilled people and hundreds of thousands of growing businesses, many of which are in advanced, high-tech areas. The development at Hinkley Point C, which has already been mentioned, will give the region a major boost. The counterpart to that is the need to invest in smaller pieces of infrastructure.
An awful lot of people’s happiness, certainly in rural areas —I speak as a Member of Parliament for Herefordshire, which can only gaze at the quality of the south-west’s infrastructure and its access to higher education—depends on small-scale road and rail infrastructure, as well as large-scale connectivity. I certainly hope, as I know colleagues do, that that aspect of infrastructure development will be reflected in the plans to come.
Jesse Norman
I am afraid I am running out of time, owing to your excellent work, Sir Roger.
Chi Onwurah
He has not said anything; it was a totally content-free speech.
Jesse Norman
I am happy to take an intervention with your approval, Sir Roger.
Chi Onwurah
Before the Minister finishes, he said that the industrial strategy will take some time and that it will take allowance of skills and sectors. Will he give a concrete indication of how long the consultation will last and when the industrial strategy will be published? During that time, will he give a running commentary on what is in the industrial strategy so business can make appropriate plans?
Jesse Norman
It is difficult if remarks one has already made have not been heard. I have already said that the industrial strategy will be launched in the form of a consultation paper in the next few weeks. It is not a thing in and of itself. The Government anticipate that there will then be contributions and a further refinement. At some point, it will be published, and it will then be a reference document from which regions and businesses can take comfort and refer to when making their own plans.
That is the structure of the industrial strategy. It is fair to say, in that context, that the south-west has made its voice heard in a way that few other regions have succeeded in doing. It has done wonderfully well in flagging up the advantages of that part of the world. It is a pleasure for me to work with the two LEPs that have been mentioned. I salute the work of the south west growth summit and the charter. We can only hope that that work will continue to be transferred into local energy and further Government investment.
Mr Streeter
The Minister, who knows I am a huge admirer of his, referred to the serried ranks of Conservative Members of Parliament from the south-west, and indeed he is right. The right hon. Member for Exeter (Mr Bradshaw) is also right that commitments were given in the run-up to the previous election, particularly about infrastructure. If the Minister thinks that if we fail to deliver on those commitments there will still be serried ranks of Conservative MPs from the south-west after 2020, I am afraid he is sadly mistaken. In 2020, we will be judged on the infrastructure and connectivity we deliver for our region. We have heard some very warm and supportive words from the Government, and it is great that we will have an industrial strategy, but we want action. There is a time for making promises and commitments, and there is a time for delivery. The time for delivery is now.
This positive charter was put together by the business leadership in our region. It is very positive about what they will do in our region, but it asks the Government to make specific commitments about delivery over the next five years. It talks about digital, energy and transport connectivity. My wife, who is coming up to London today, looked at the Great Western Railway website and said, “I cannot catch a train from Plymouth to London.” Colleagues were stranded yesterday afternoon and evening when trying to get from their constituencies to vote in an important debate in the House of Commons. People cannot get from Plymouth to London today by rail. It is not good enough. The time for promises is over. The time for delivery is now.
We want a new partnership between the private sector and the Government for the south-west. It is not rocket science. We know how to do infrastructure and connectivity. We want the Government to give us the resources and the commitment. We have the passion; give us the commitment.
Question put and agreed to.
Resolved,
That this House has considered the South West Charter for Growth.
Accident and Emergency Services: Merseyside and Cheshire
(8 years, 1 month ago)
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John Pugh (Southport) (LD)
I beg to move,
That this House has considered accident and emergency services in Merseyside and Cheshire.
It is a pleasure to serve under your chairmanship, Sir Roger, and a pleasure to see the Minister in his place. We spent many a happy hour on the Public Accounts Committee in years gone by, and I have great respect for him. I am sure he will give due consideration to what I say.
The debate title is a slight misnomer, however, because it was intended to entice other colleagues from the Cheshire and Merseyside region. Sadly, they have not taken the bait, perhaps because of the limited time available, so I will talk largely and almost exclusively about my own patch.
Southport is a large seaside town on the Lancashire coast, with one of the most elderly populations in the UK. I have to point that out, because for some reason I am often confused with the Member for Stockport and I am referred to as such. Southport, however, is nothing like Stockport. Southport is a seaside town and has one district general hospital on a split site with Ormskirk. The accident and emergency provision, though, is split by age between the two sites, which is a bone of contention in Southport.
For the purpose of the sustainability and transformation review, Southport was grouped with other hospitals ringing Liverpool, including those in Aintree, St Helens, Whiston and Warrington. Southport has recently had a poor Care Quality Commission report on its A&E department and an equally poor review of its surgery. It has responded positively with further investment of £600,000 into the A&E department, so that now, according to the stats—I checked this with the chief executive only this week—it has one of the best-performing A&E departments in the north-west.
That might have been the end of the story, because the CQC report dates from some time back and because of the improvements, but for suppressed drafts of the Cheshire and Lancashire sustainability and transformation review that have been leaked. The leak showed a number of things, including a possible downgrading of Southport A&E and of other A&E departments in the area—the hon. Member for Macclesfield (David Rutley) is now in the Chamber, and his is one of the areas affected, as we have discussed—as part of a cost-saving exercise.
That is not the first time that the suggestion has been made apropos of Southport, but the Minister knows from his own experience in Ludlow how politically explosive such suggestions can be and have been. He will also appreciate that those suggestions are sometimes entirely simplistic and often linked to another further bright suggestion that people come up with, which is to close down wards. The consultants charged with balancing the books, and often deferred to by the national health service, might come up with the brilliant suggestion that the best thing to be done with a loss-making hospital is to get it to do less—to stop admitting people to A&E, and finding space for them in wards, and therefore to close down A&E and shut down a few wards.
The Cheshire and Merseyside sustainability and transformation plan proposals were reneged on somewhat in the final draft, so they fell short of actually advocating downgrades. However, that is not to say that that is not in mind as an ultimate objective.
David Rutley (Macclesfield) (Con)
I congratulate the hon. Gentleman on securing the debate. Like him, I am concerned about the proposals set out in the STP and, with regards to east Cheshire, the document actually sets out that options being considered include downgrading from an A&E to an urgent care centre in Macclesfield. There needs to be greater transparency about the options and a frank conversation with people. There is already a Macclesfield petition signed by 8,000 people opposing any downgrading of A&E services in our area.
John Pugh
There is also a petition in Southport, and I am sure there will be petitions wherever in the country this sort of thing happens. As the hon. Gentleman suggests, the ownership of the sustainability and transformation reviews is wholly unclear. No one quite knows who writes the plans, or how they are agreed, and few democratically elected bodies or people, or patients, have any kind of input. In fact, the Liverpool local authorities wrote in some indignation to the authors of the report to ask, “How can we be involved? It alleges in your report that we are involved, but we do not appear to be.” Furthermore, no one quite knows why the hospitals have been grouped as they are.
Southport hospital is in a particularly unfortunate position, because it has changed its chair recently and suspended its chief executive over a period of a year, so it is unclear to me how Southport and Ormskirk’s views could have been represented in any review. Roadshows were organised by the clinical commissioning groups to talk about the financial plight of the local NHS and things that need to be done, and I have attended some of them, but they spend all their time talking about things such as savings on prescriptions and none on the big league stuff that is agreed and discussed in NHS boardrooms. There is absolutely no transparency, and I am sure hon. Members share in my cynicism. We await the real cost-saving proposals—or, in some cases, the empire-building proposals that are often disguised by blather about clinical efficiency and safety, which come almost after the event.
I speak with some cynicism, because I am a veteran of such carryings-on. I regret all the back-stage manoeuvres and, in particular, that no one has been around to champion my local hospital in the review. There is a good case for keeping our A&E—elderly people throughout the country are the major clients of A&E, for obvious reasons.
Jim Shannon (Strangford) (DUP)
The debate is clearly about Merseyside, but the issues for accident and emergency are the same everywhere in the United Kingdom, including in Northern Ireland. Does the hon. Gentleman share my concern about A&E being on the frontline of the NHS, so that is where the spend clearly needs to be? Does he also share my concern about Government policies to close some pharmacies, with their role, which will push many minor ailments to A&E, creating even more problems?
John Pugh
Precisely. I am going on to some brief analysis of the problems of A&E, but it is certainly the line in the sand that we must defend.
Elderly people are obviously the major clients for A&E, and Southport by any analysis has an enormous number—a very high percentage—of people who will require A&E. Moreover, as the ambulance service says, and as the hospital will confirm, when people arrive at A&E these days they are iller than ever before. The reason for that is that access to GPs and to social care is worsening—social care has suffered extensive cuts, and has done so in my area, and is struggling.
To make matters worse, one reason for A&E throughput being a little slow is that, more than ever, people going to A&E are not being turned around and sent home, but need to be admitted, so beds are needed for them, although previous reports recommended ward closures in Southport hospital. Furthermore, discharging people from existing wards is a slower process, because social services are, frankly, struggling. The system is getting logjammed, with ambulances at one end and people not being discharged at the other.
To add to the problem is a matter that the hon. Member for West Lancashire (Rosie Cooper) will wish to bring up: the CCGs have taken the community care contract off Southport hospital, where I thought it was well placed, and given it to two organisations new to the field. How that is supposed to help integration, I do not know.
Rosie Cooper (West Lancashire) (Lab)
There is a serious problem in West Lancashire and the Southport conurbation. The local population has been excluded from all these decision-making processes. There is a serious need for the NHS bosses to explain what they mean by “downgrading”, as their perception of A&E can vary quite significantly from my community’s understanding. Simply sharing information without any explanation leads to anxiety and serious distress about the future of health services. I come back to the point that the hon. Gentleman has just been making: in the face of the fact that it will destabilise the hospital, the CCG—that is the local GPs—has just awarded the contract for urgent and community services to Virgin Care, which has no real track record. We do not have a real assessment of what is going on, and my constituents are being put at risk.
John Pugh
I thank the hon. Lady for that clarification and amplification. There really is a problem with integration, and I do not know how that will be better solved by bringing more organisations—particularly untried organisations—into the fray.
We are all exasperated by watching people make a hash of things and create rather than solve problems. CCGs are neither accountable nor always reasonable, and frankly sometimes have their own agendas. They are often tough on hospitals but less so on GPs. They are of course GP-led organisations, which is a weakness in how they are structured. I have a letter from the biggest surgery in my patch complaining about abuse received by receptionists. Hon. Members will be able to guess what that abuse is about. It is not excusable, but the rationale for that abuse is that people are having real difficulty making appointments in a timely and effective way, and as a result they are going to A&E, sometimes in desperation. Surveys that I have done over time have shown GP access to be as much of an issue in my constituency as A&E waiting times. As the hon. Lady just said, NHS bosses collectively are either deliberately or accidentally causing the destabilisation and unbalancing of provision in the area, and no one can stop them.
Margaret Greenwood (Wirral West) (Lab)
I thank the hon. Gentleman for being so generous. Does he share my concern that the STP for Cheshire and Merseyside talks of
“leaving the work at STP to focus on creating a framework to support development of”
accountable care organisations? ACOs are generally associated with insurance-based systems such as those that exist in the US. Does he share my concern that that fragmentation is to do with breaking up the national health service?
Rosie Cooper
CCGs are nominally accountable to the Secretary of State or NHS England. Will the Minister address who actually guarantees that CCGs will provide really good service? The incompetent CCG in Liverpool that presided over the unholy mess at Liverpool Community Health NHS Trust has been allowed to preside over future services and new contracts in Liverpool. It is the same incompetent organisation. How is that okay?
John Pugh
The hon. Lady reinforces the point that I was going to make next. No one in the NHS locally is in a position to bang heads together and say, “Hang on, what do the public actually want or expect here?” The CCGs speak to NHS England and the Secretary of State. They are the decision makers. It seems to me that one of the coalition Government’s biggest mistakes was abolishing the regional strategic arms of the NHS—the bodies accountable for integrating and making things work together and making services across an area work effectively. Instead, we have groups of special interests—the big providers on one side and wholly unaccountable CCGs on the other—and, frankly, a recipe for chaos.
Margaret Greenwood
On accountability, does the hon. Gentleman share my concern—I would welcome a response from the Minister on this point—that the Health and Social Care Act 2012 took away the Secretary of State’s duty to provide and secure a national health service in England? That is one of that Act’s key flaws.
John Pugh
There was actually an attempt to make clear in that legislation where responsibility lay. I am very familiar with that debate and do not want to re-engage with it at the moment.
There is an absence of a genuine force for integration at a local level. We all know that there are institutions in any local environment that will be shored up at all costs, regardless of the clinical benefits to the population. Like the banks, a big private finance initiative such as the Royal Liverpool hospital will never be allowed to fail, because when PFIs fail, they revert to the Government’s books. Such services therefore tend to attract neighbouring services, whether or not it is a good idea for those neighbouring services to be attracted and regardless of the practicalities or the patients.
To come to some sort of conclusion, without a 24/7 A&E in Southport and all that follows from that—a great deal follows from that in terms of what other services may then go—people will suffer longer and more anxious journeys. I shudder to think what would happen if there were an incident at a big event in Southport, such as the flower show, the air show or the musical fireworks, and we did not have a 24/7 A&E. For better or worse, Southport is on the periphery of Merseyside and the hospital is also used by large parts of Lancashire. Southport straddles the boundary between Sefton and West Lancashire. The local hospital trust has to interact with two CCGs that face different ways. As it stands, the hospital is massively convenient for patients but inconvenient for those who like symmetry in the NHS. Precisely because of that, we are in constant danger of being overlooked and not championed, which is why Sefton Council recently passed a motion drawing attention to its concerns, particularly about the A&E.
Hon. Members will have gathered that I do not have entire confidence in the transformation process. None of us will say that we are not aware of the need to work more smartly and in a more integrated fashion to make the health pound work a lot harder, but the record will show that this is not the first time that I and the hon. Member for West Lancashire have brought the affairs of this hospital and this health service patch to the House’s attention. I fought off a previous attempt to get rid of our A&E when that was mooted by consultants on the usual ground that if the NHS ceases to do anything, it will cease to cost anything. The public have campaigned vigorously for an urgent care centre in Southport, and a succession of Ministers have been lobbied in this place about that plan, only for it to be scuppered by behind-the-scenes NHS politics. I have no reason to feel any confidence at all in this process—not when I see the hospital trust itself make a complete hash of whistleblowing charges against senior management and protract the process through its own simple incompetence.
Rosie Cooper
Does the hon. Gentleman agree that STPs are in danger of becoming a managerial exercise in contingency and risk planning, where the NHS speaks to itself? Several years ago, in the Health Committee, I put to Bruce Keogh the charge that where we were going, there would be 30-plus trauma centres in this country and every A&E would be downgraded. With STPs, the NHS is talking to itself, not the communities it serves, and it will come up with that very same plan. I can see that happening in front of me right now.
Sir Roger Gale (in the Chair)
Order. I have to make the point that these half-hour debates are specifically the property of the Member in charge. Mr Pugh is entitled to give way to whomever he chooses, but interventions should be interventions, not speeches, and every moment that is taken curtails the opportunity for the Minister to respond.
John Pugh
Thank you, Sir Roger. We are on the home straight now. The trust that we are talking about has been under the management of a series of interims over the past year. That has not helped its affairs. Why should the people of Southport suffer? We have been poorly served—not by the doctors, the nurses and the hard-working staff, but by the NHS high command. People are angry. If they are to be repaid for their anger by having further services taken off them, that anger will simply come the Government’s way, to the Secretary of State who will make any final decisions.
I want to make a plea. Let us not have another NHS stitch-up on any patch, where MPs, councils, local people, patients and all the access issues provoked by these arrangements normally are ignored. Let us not have a fait accompli that suits special interests that is covered over at the last minute with a veneer of clinical justification. Let us have local decision making that is not a sham or a pretence, but is genuine local decision making. Lord Lansley had a frequent saying in many a debate on health—I am not a great fan of his, but the saying bears repetition—which was, “Nothing about me, without me.” We have had lots done to us with the health service on our patch, but it has always been without any genuine involvement of the population or their representatives. I make a plea to the Minister that he tries to correct that or to reassure me that this time it ain’t gonna happen.
The Minister of State, Department of Health (Mr Philip Dunne)
It is a great pleasure, as always, to serve under your chairmanship, Sir Roger. I congratulate the hon. Member for Southport (John Pugh) on securing the debate. He referenced the fact that we served together on the Public Accounts Committee many years ago in the early days of my parliamentary career, and I have therefore long understood his forensic approach to matters affecting his constituency. He has shown that again today with his characterisation of the health needs of Southport. It is good to see a number of neighbouring MPs joining this short debate. They share a common interest in guaranteeing high-quality health services for their local residents. We in the Department of Health obviously share that interest.
I have listened carefully to the concerns the hon. Gentleman has expressed about A&E services in particular in the local area. He and other Members have touched on wider health issues, and I will try to address some of those in the few moments I have today. I am particularly aware of the concerns he concluded with about the potential of the sustainability and transformation plan proposals for the area, which include urgent care among many other things. I will touch on that in my remarks.
We all recognise the increasing pressures in the NHS, particularly as we move into winter. I am sure all Members would acknowledge the hard work and dedication of those providing high-quality services across the NHS, including in Southport, which the hon. Gentleman referred to. The NHS cannot stand still, however, and services need to change to continue to meet patient need and patient expectation. Nationally, there were some 1.95 million attendances at A&E departments in September, compared with around 1.86 million in September 2015—an increase of 4.9% in only 12 months. Some 1.77 million patients were admitted, transferred or discharged within four hours, compared with 1.73 million a year ago—an increase of 1.85%. I give the House those statistics to point out that the NHS is seeing and treating more people within its targets than ever before. In Merseyside and Cheshire, that means that more than 2,400 more patients were transferred, admitted or discharged within four hours of arrival this September as compared with last September.
Turning specifically to the Southport and Ormskirk Hospital NHS Trust, there are clearly performance matters that need to be addressed. Although its A&E performance does not meet the national 95% target, at 91.5% it is above the national average of 90.6%. As the hon. Gentleman said, its current A&E performance is relatively better than that elsewhere. However, the CQC report that he touched on, which was published last week, rated the A&E department as “inadequate” for safety and “requires improvement” for all other fields apart from caring. Although that may be based on work done some months ago, I am sure he would agree that it is unacceptable. The trust needs to improve its performance for the people of Southport.
John Pugh
The Minister is making an important point. The argument about the CQC inspections is to some extent related to what the CQC inspects. If it is inspecting an A&E department—I hope I made this clear in my speech—the CQC often has to bear in mind the fact that it is not an isolated unit. A&E works in conjunction with adult social care, the ambulance service and so on. Getting snapshots of a poorly performing department without taking into account the background and the other arrangements in and around A&E can give a false picture of where the problem lies.
Mr Dunne
I am not going to get into a prolonged debate about the CQC report, but it rates the entire trust as “requires improvement”. We have confidence in the overall reporting, and looking at A&E in that context reflects an accurate impression of the current status of the trust. For example, three of the trust’s seven A&E consultant posts are filled by locums or agency staff. That mix of staffing is not sustainable for any A&E department. I am aware that the trust and its commissioners are looking to address that.
Several hon. Members referred in interventions on the hon. Member for Southport to the NHS sustainability and transformation plans. I emphasise to the House that STPs are collaborative plans designed to help local organisations deliver on the “Five Year Forward View”. They are formed by CCGs, providers and local authorities working together in an area to develop a plan. Some have also involved other stakeholders who will be affected by changes in their area and can contribute to improvements. The true test will be whether a revised healthcare system really improves matters for patients.
We are still at an early stage in the process. The local NHS describes the plan for Cheshire and Merseyside as a plan for a plan at this stage. I will not therefore pass judgement today on the STP process or the content of the Cheshire and Merseyside STP. I am not in a position to do so. I do not know the local position as well as the local clinicians who have drawn up the plan; no one in Westminster or Whitehall does. Local clinicians must ensure that they involve the public and patients—and Members, as the hon. Gentleman called for in his closing remarks—and explain what they think is best for each local area. I reject the charge that the plan will not involve the local communities; it absolutely needs to involve local communities to be taken forward. It is a central tenet of the approval of the plans that there is public engagement.
Mr Dunne
I am afraid I have very little time, and the hon. Lady will have an opportunity to pick my brains directly on anything I do not address in my remarks, because we are meeting next week. I am happy to talk to her. We have had a dialogue over some of the health issues that are of most concern to her, and I thank her for her efforts in bringing those to my attention.
The STP process is not run by or for the Department of Health. It is run by the NHS for patients of the NHS. Design of health services, including front-line health services and A&E, is a matter for the local NHS. The reforms that my noble Friend Lord Lansley made when he was in post have put clinicians in charge of the care people receive and how it is delivered to serve their populations best. Local authorities are vital in helping set the direction of health and social care development locally. Guidance on STPs from NHS England has been clear about the importance of local authorities in partnership arrangements and of the NHS working with local authorities to deliver prevention and public health improvements. It is crucial that the NHS and local authorities work closely to ensure the key aims of the STP process can be delivered: better health, better patient care and improved NHS efficiency.
The STP for Cheshire and Merseyside was published a week ago, on 15 November. As I said, the NHS described it as a plan for a plan. In the area represented by the hon. Member for Southport, it builds on the “Shaping Sefton” local delivery system, which I understand had considerable public engagement. It is disappointing that the leaking of an early and incomplete draft of the STP led to speculation and some concern. I hope that the publication of the formal document will dispel some of those fears. I assure the hon. Gentleman that no changes to the services people currently receive will be made without local engagement. When and if final plans propose service change, formal consultation will follow in due course.
Motion lapsed (Standing Order No. 10(6)).
Self Care Week
(8 years, 1 month ago)
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Sir Kevin Barron (Rother Valley) (Lab)
I beg to move,
That this House has considered Self Care Week 2016.
It is a pleasure to serve under your chairmanship, Mr Walker. I am delighted to have secured this debate, timed to take place just after Self Care Week. As co-chair of the all-party parliamentary group on primary care and public health, I have taken an interest in self-care for some years. Self-care is essential for healthy living, and self-care certainly does not mean no care. Self-care is also essential for the future sustainability of the NHS.
There are two reasons why the Department of Health established Self Care Week in 2009, which is a national awareness week to support people to better look after their physical health and mental wellbeing. The Minister was not in office when the NHS was grappling with reforms and reorganisation in 2010, but at that time the Self Care Forum, a charity that aims to further the reach of self-care and embed it in everyday life, was asked to take over the organisation of Self Care Week. Since then, it has gone from strength to strength, with growing numbers of local and regional health organisations running events and activities across the country to support and educate people in their health.
The theme for the 2016 Self Care Week was improving people’s health literacy. According to the Royal College of General Practitioners, 60% of working-age adults find health information too complex to understand. That worrying statistic shows that there is an urgent need to empower people in their health and improve health literacy across the population. When people play a more collaborative role in managing their health and care, they are less likely to use emergency hospital services and more likely to stick to their treatment plans and to take medicines correctly. Those who are more involved are less anxious, more satisfied, less likely to complain and tend to enjoy better outcomes and a better quality of life than those who are less involved. It is awful jargon, but it is true, that person-centred care is good for healthcare professionals, too. As patient engagement increases, staff performance and morale sees a corresponding increase.
Earlier this year, the all-party group on primary care and public health carried out an inquiry into the NHS’s five-year forward view. We looked specifically at behaviour change information and signposting and concluded that poor health literacy was harming the nation’s health and contributing to the pressures on the national health service. In other words, the NHS is failing to harness the potential of patients to improve and maintain their own health.
To address that, we recommended that comprehensive health education should be included in the national curriculum to improve the health literacy of children, who are future health service users. That health education should go beyond the usual sex, relationships and drug education programmes and include, for example, information on the national health service, its history and structure and the right way to access services.
It is important that the elderly do not think that self-care ends when they move into a care home. They must be able to maintain their independence and live life to the full. A main component of that is ensuring that they are able to buy personal goods. I was therefore disappointed when I was contacted by a constituent who was concerned about the treatment of his mother-in-law in relation to the personal expenses allowance that people in nursing homes get. That allowance has not been raised at all, which means that, due to inflation, people have less money to spend. In an email to me, he said:
“Recently, as you will be aware, her annual pension and pension credit increased by 2.9% in line with inflation. However, the PEA remained at £24.90 per week. So in effect her increase in Pension and Pension Credit from Central Government was passed straight through to the Local Government and she has received zero increase. No doubt her personal items such as underwear, clothes, shoes sweets etc. will increase in cost this year leaving her actually worse off for the increase.”
It seems I have dropped this on the Minister—that was not my intention, but it is an opportune time to bring the case to his attention—but will he explain now or later why the personal expenses allowance was not raised in line with inflation or even further?
Health education needs to continue throughout life, particularly at key stages such as when people start university, have their first child or retire. That would help people to understand which parts of the NHS they should use based on their health needs and whether they need to access health services or could self-treat safely at home.
It may be an opportune time to mention this. I am one of the three Rotherham MPs and we have a scheme called social prescribing, which is contracted and paid for by the Rotherham clinical commissioning group. I understand that the team from the Rotherham social prescribing service, who I spoke to at a community function last Friday night, have spent some time with the Secretary of State, who has seen exactly what they do. They are helping people with long-term health conditions to use a wide variety of services and take part in activities provided by voluntary organisations and community groups; 1,600 different community groups are playing a part.
People do not always need medicines. Medicines play a part in people’s life where the health service does not engage, and we would not expect it to do so, but the scheme is about preventing people from going into the healthcare system. I know a lot is changing now in the plans being laid down at local level, which are advancing in Rotherham as well, but something like social prescribing is a good way of involving other people—not just the health service—in helping to ensure that people avoid, if at all possible, going into the health service.
Last week, the Proprietary Association of Great Britain—the trade association that represents the consumer health industry—published new research that found that 92% of people agree that it is important to take responsibility for their own health to ease the burden on the national health service. Despite that, 46% still visit their GP or accident and emergency with self-treatable conditions. Its research also found that 47% of people would not visit a pharmacist first for advice on a self-treatable condition, with 18% claiming that that is because they do not think pharmacists are as qualified as doctors or A&Es.
It is clear that more needs to be done to educate people about the expertise of pharmacists—at this stage, I should say that I chair the all-party pharmacy group. My experience of the fitness of pharmacists to look after people without the need to bother doctors was not in this country. Many years ago, I was on holiday with my three young children in Spain. One of them fell ill and I asked the hotel staff how we could contact a doctor. They said, “Just go up the road to the pharmacist.” I went up to the pharmacist and it was extraordinary: we came away with the right medicines, which cured the condition pretty quickly and the holiday carried on.
I try to keep healthy myself, but that was the first time I had seen the expertise that pharmacists have and how they could help us. Pharmacists are expert health professionals who have a front-line role to play in giving people information and empowering them to take responsibility for their own health. I am sure the Minister agrees with that, as we have talked about pharmacies and the current situation with the pharmacy budget. He will be pleased to know that I will not bring that up today, but we have talked a lot about it. Better signposting to the pharmacy is necessary when we consider that 57 million people go to their GP and 3.7 million people go to A&E for ailments that only a few generations ago would have been safely treated at home with advice and medicines from a pharmacy.
Cambridgeshire and Peterborough clinical commissioning group reported in March that, over the Easter period, people visited A&E with splinters, broken nails, paper cuts and hiccups. I am certain that that is not particular to Cambridgeshire and Peterborough, and that we would hear similar reports from A&E departments up and down the country. I know that about 50 people came along to my own CCG in Rotherham last year because they had toothache. I have no doubt that those people will have passed a local pharmacy where they could have bought some reasonably cheap pharmaceutical products to get rid of the toothache in the short term, and so not clog up the A&E.
People are clearly confused about when and how to use the NHS and need help in knowing where to go. I know that work is being done to improve the non-emergency helpline, NHS 111, which is important. Every day NHS 111 sends to GPs and to A&E people who could just go to a pharmacy without waiting and without an appointment to get the help that they need. We need to make sure that people receive a consistent message about self-care, whether they look at NHS Choices online, call NHS 111, visit a GP or speak to a pharmacist.
I know other hon. Members want to speak, so I will sum up by saying that more has to be done to address the escalating demand on the national health service, to combat the general confusion about where to go in the system and to improve people’s ability to look after their own and their family’s health. Excellent though it is, Self Care Week alone is not enough, as I suggested earlier. The local activities and events taking place during Self Care Week are definitely part of the solution to empowering people and addressing the demand on the national health service, but a bigger, more co-ordinated programme of work is essential if we are to move the self-care agenda along quicker.
Our all-party parliamentary group concluded earlier this year that we need a national strategy for self-help, led by a Government Minister and a national director to ensure implementation. It should be designed to co-ordinate policies across Government Departments and throughout the NHS and public health at the national and local level. It should be designed to empower people and should lead to a self-care culture and a behaviour change, so that people know not to go to A&E or to a general practitioner with their splinters, understand what steps to take to avoid serious conditions and know how to avoid hospital emergencies by managing long-term conditions. We would all agree that that is essential, but it does not happen very often. More than 70% of national health service expenditure in this country is on people with long-term conditions. People normally have more than one, of course, which sometimes seems difficult to grasp.
It seems to me that these issues are plain to everybody. We need to tackle them and to shape the national health service around long-term conditions, and not let the national health service shape us on how we should present to it. That needs radical thinking but, the Minister will be pleased to know, not legislation. I sat on a Committee back in 2010-11 that was suspended for a while because of the turmoil over the national health service reorganisation that was happening at the time, which is the last thing we want now. However, we want people in the health service and elsewhere to recognise that things ought to change and can change, and that legislation is not needed for that to happen. We need to make sure that we see a population that is able to self-care for life.
Martyn Day (Linlithgow and East Falkirk) (SNP)
It is a pleasure to serve under your chairmanship, Mr Walker. May I start by thanking the right hon. Member for Rother Valley (Sir Kevin Barron) for bringing this timely debate, and also for his clear and detailed explanation of his position?
For my part, I supported Self Care Week last week by treating the latest winter cold I have picked up with a couple of lozenges and a few hot toddies. My hon. Friend the Member for Rutherglen and Hamilton West (Margaret Ferrier) has set me a challenge to get through the debate without coughing; I have to confess I have failed already. However, I will repeat the dosage later on tonight.
We have heard that self-care is the act of looking after one’s own physical or mental health, and that that extends to treating common illnesses with over-the-counter drugs and managing long-term conditions. We know that 80% of all care in the UK is actually self-care, and most people feel comfortable managing everyday minor ailments themselves, particularly when they feel confident that they have been successfully treated before using over-the-counter medicines.
Self-care is a fundamental part of healthcare—and Self Care Week provides an opportunity for us to encourage people to engage in self-care in a wide variety of areas—but it is important for us to get the balance right between managing conditions that are self-treatable and knowing when to get professional medical help. The right hon. Member for Rother Valley stated some examples in which it was clearly inappropriate to go to accident and emergency, and it is getting that balance right that we have to promote.
Self-care need not be as lonely as the term suggests. Often, conditions that can be self-managed are done so with support, be that from health professionals, organised support groups or advice from community pharmacies; people are not out there on their own with self-care. There are many good examples of such support across my constituency, covering a range of conditions and ailments. Eczema Outreach Scotland, which is based in Linlithgow, is a support charity for families affected by eczema. While it does not provide medical advice, it helps affected families in many ways, from practical advice to emotional support. As we know, one of the most common conditions experienced is joint pain, and the central arthritis self-help group, which meets in Grangemouth, organises outings, hydrotherapy and exercise sessions to assist sufferers.
Obviously, self-care for mental health is just as important as for physical conditions. In Bathgate, there is the West Lothian bipolar self-help group, which helps people affected by that common condition to share advice and insights on getting back into work and staying fit. Another example is the West Lothian health and social care partnership, which brings together NHS Lothian and West Lothian Council. It runs the superb “Eatright West Lothian” scheme, which aims to promote good nutrition and healthy eating, which can assist with many different conditions.
It is worth noting that the Self Care Forum recommended the following top tip:
“Involve the local pharmacists and community nurses in giving the same advice and support for self care; and work with the local pharmacists to ensure that their triage of common problems is similar to that in the practice.”
That is not quite the way I would have worded it, but I agree wholeheartedly; it is very good advice. Community pharmacists can only give out certain medicines and products, although the benefits of that can be massive, as it can cut the workload of GPs and other NHS staff across the country. The Scottish Pharmacy Board stated that, in 2015-16, more than one in 10 GP consultations and one in 20 A&E attendances could have been managed by community pharmacists utilising the minor ailment service.
Some 1,200 pharmacies throughout Scotland provide a range of services on behalf of the NHS. As well as dispensing prescriptions, they offer four new NHS pharmaceutical care services which have been gradually introduced since 2006—the minor ailment service, the public health service, the acute medication service and the chronic medication service. Those new services involve pharmacists in the community more in the provision of direct, patient-centred care, with every community pharmacy in Scotland having patients registered for the minor ailments service by 31 March 2015.
The minor ailment service allows people to get advice and free treatment on issues such as, but not exclusive to, acne, headaches, athlete’s foot, head lice, backache, indigestion, cold sores, mouth ulcers, constipation, nasal congestion, cough pain, diarrhoea, period pain, earache, thrush, allergies, sore throat, threadworms, hay fever, warts and verrucae; in fact, pretty much everything that is covered with self-care. Nearly 18% of the population of Scotland are registered for the minor ailment service—a total of 913,483 people. More than 2.1 million items have been dispensed under it, accounting for some 2.2% of all items dispensed by community pharmacies in Scotland.
In Scotland, we recognise just how important community pharmacies are. The Scottish National party Scottish Government are helping to explore new ways for community pharmacies and other primary care services to aid self-care within our communities. The SNP Scottish Government are committed to supporting and developing local GP and primary care services, and have just announced a three-year, £85 million primary care fund to help to develop new ways of delivering healthcare in the community, which will involve pharmacists delivering aspects of patient care.
In conclusion, I welcome the recent words that we have heard from the UK Government that they want to copy the Scottish Government’s approach to community pharmacies and the minor ailment service. I thoroughly recommend that model to everyone, because we have found it to be very good and effective to date. I also welcome the opportunity to take part in today’s interesting and good-natured debate, which I hope will help to promote self-care further to the wider public audience.
Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)
It is an honour to serve under your chairmanship, Mr Walker. I welcome this important debate and the fact that it has been secured during Self Care Week—
Mrs Hodgson
Just after Self Care Week. I commend my right hon. Friend the Member for Rother Valley (Sir Kevin Barron) for securing this debate and for his excellent speech, which shows his deep knowledge of and passion for all matters relating to the health of our nation, especially with regard to preventive health measures. I thank him for that.
This debate is especially important, as it is the first time we have had a dedicated debate on self-care in a very long time. We heard an excellent contribution from the hon. Member for Linlithgow and East Falkirk (Martyn Day). Before we hear from the Minister, I want to look at the issue of self-care and the wider picture of preventive measures through the lens of the cultural shift in the NHS away from care and repair to prevention and wellbeing promotion. I will also look at how aspects of current Government policy, such as the cuts to public health funding—I know I keep banging on about that, but it is important—is detrimental to our shared vision for an improved NHS and to achieving a healthier nation.
When NHS England’s “Five Year Forward View” was published just over two years ago, we were promised a radical upgrade in prevention and public health. That belief in reshaping the approach of the NHS and our health services away from a sickness alleviation service towards a wellbeing service that promotes healthier lifestyles choices, improved wellbeing and the prevention of ill health through behavioural change is supported across the NHS and in wider society.
That shift is paramount when we see the NHS in a state of crisis, with longer A&E waiting times and GP appointments becoming harder and harder to come by. One in four patients wait at least a week to see their GP. My husband had to wait three weeks to see the GP because it was not an emergency, but he thought it was an emergency; sometimes we do not know, and it is up to the doctor to decide what is important and what is not.
Some parts of the NHS are at crisis point. That is not a party political point at all; it is supported by health organisations such as the Nuffield Trust and the Health Foundation, which professed this time last year that the NHS was at risk of a “catastrophic collapse”. If the worrying trends in waiting times that I have described are ever to be reversed and we are to save the NHS, we need to have a wholesale rethink about the way we approach health policy. Prevention must be the key, and self-care should be a central part of that reconsidered approach.
Self-care is about empowering people and patients to maintain their own health through informed lifestyle choices, better awareness of symptoms and better awareness of when it is important to seek professional advice—for example, for possible cancer symptoms, where early diagnosis is absolutely crucial and a matter of life and death—and when an ailment can be treated by someone themselves in the appropriate manner by talking to their community pharmacist, as my right hon. Friend the Member for Rother Valley described on the occasion of a family holiday. With improved confidence, people can take control of their own health or long-term conditions much better and make decisions that are far better for the NHS.
It is completely understandable that when we are unsure about the cause of symptoms or the best course of treatment or care, our first port of call is the NHS. However, being more aware of how we can treat ourselves and having preventive practices in place that reduce the prevalence of ill health will help go some way towards pulling the NHS back from the brink. The NHS is a trusted bastion, but sadly we are seeing more and more people accessing NHS services when there is no need and when a chat to one of our excellent community pharmacists would have sufficed—for example, in the cases we have heard about today of splinters, paper cuts, hiccups or broken nails. A bit of common sense is all that is needed, certainly not a trip to A&E.
In 2014, A&E departments across the country dealt with 3.7 million visits for self-treatable conditions such as those mentioned today, as well as the common cold, flu or muscle pain, combined with 52 million visits to the GP for similar conditions. It is no wonder people cannot get an appointment when some people are going to see their GP for that sort of thing. That has an estimated cost to the NHS of more than £10 billion over the past five years, which is not a small or insignificant amount of money.
Self-care is a crucial preventive measure that must be developed further to ensure that the NHS is as resilient as possible and can respond in more effective and meaningful ways to the nation’s health. With all that in mind, it is deeply worrying that the vision set out in the “Five Year Forward View” has progressed little or not at all. That is seen most clearly through the Making Every Contact Count initiative, which aims to make NHS staff members an important part of boosting awareness of healthy living, rather than only administering healthcare to the sick. It is a fantastic initiative. In theory, that strategy can go far in addressing issues around lifestyle choices such as smoking, drugs, diet and alcohol consumption by just adding a one or two-minute conversation when a healthcare professional already has someone in front of them.
It is worrying that the progress and roll-out of that scheme is patchy, despite there being lots of good practice across the country, such as the social prescribing service in Rotherham that my right hon. Friend talked about. Where such system change is flourishing and showing that it can support a reduction in pressures on NHS services such as A&E and GP practices, it should be encouraged, and the roll-out should be far more substantial.
I hope the Minister can give us some reassurance on three key asks for the Make Every Contact Count initiative: first, that we see progress made on the scheme in the new year, as promised by Professor Fenton from Public Health England during the second oral evidence session for the APPG on primary care and public health inquiry; secondly, that best practice is made more readily available to improve provision across the country through the Self Care Forum’s database of best practice; and thirdly, that he commits to ensuring CCGs prioritise implementation of the scheme in their local areas and that training is provided for staff, to equip them to provide consistent self-care messaging.
It should not go without saying that there are examples across the country that show the innovative and positive impacts of improving self-care, such as a scheme in my own neck of the woods in South Tyneside—the neighbouring borough to my own—where a borough-wide conversation has been developed that shifts away from asking, “How can I help you?” and instead asks, “How can I help you to help yourself?”
Those initiatives need funding and encouraging from Government to succeed. However, what we are currently seeing has been described as a frustrating and perverse approach to preventive measures, with cuts to public health funding of £200 million in last year’s Budget, along with an average real-terms cut of 3.9% each year to 2021, announced in last year’s autumn statement. Hopefully tomorrow we will see our new Chancellor go some way to rectifying and reversing that; we can live in hope, unless the Minister has some insight into what the Chancellor will announce. We will keep our fingers crossed.
The Minister is well aware of my opinion on those cuts, because we discuss them every time we meet, and the need to rethink the whole approach, but it is not only me saying this. Only recently, the Health Committee, chaired by the hon. Member for Totnes (Dr Wollaston)—who I am sure would have been here today if not for the health debate coming up in the Chamber very soon—uncovered serious concerns about the finances and funding of the NHS and public health. In a letter to the Health Secretary in October, the Committee said:
“All the indicators suggest that demand is continuing to grow and that we need to go further on prevention”.
I could not agree more. These cuts are a false economy and are exacerbating the situation within our health services. We are seeing funding directed to our crisis-ridden A&E departments, which are having to crisis-manage failures that could have been addressed a lot sooner.
The Minister needs fully to understand that to make cuts to one part of our health service without considering the impact on other parts is leading us down the road to rack and ruin. To give him some understanding of the cuts, I suggest that he look at the Health Committee report “Public health post-2013”. The Select Committee does good work, but the Chair is not here to hear me highlight all this work. The report that I have just mentioned highlights research by the Association of Directors of Public Health, which found that local authorities are planning deep cuts to public health services due to the cuts coming from central Government to local authorities. It shows a marked rise for 2016-17 compared with 2015-16.
The Government need to have a wholesale rethink of the funding of the NHS and public health services that sees a redirection to prevention, which will go some way towards addressing many of the problems in our health service that are now being documented weekly. I hope that the Minister takes some time in his response to consider the points that I have raised in relation to public health funding and how current actions are failing the vision of the five year forward view and the health of our nation. Self-care needs properly to be funded and supported to be innovative, so that we ensure that the continuing crisis facing the NHS can be reversed. We cannot continue as we are, because our NHS is too precious to let it fail. The health of the nation needs to be protected, where possible, to enable people to lead long, happy and fulfilling lives.
The Parliamentary Under-Secretary of State for Health (David Mowat)
First, I congratulate the right hon. Member for Rother Valley (Sir Kevin Barron) both on leading the charge on this issue and on his work in the APPG. This has been a shortish debate, but there were very good speeches from all hon. Members. In fact, I agreed with much if not all of the speech given by the shadow Minister, the hon. Member for Washington and Sunderland West (Mrs Hodgson), and I will come on to that.
The right hon. Member for Rother Valley rightly talked about the impact that self-care needs to have on demand in the health service. He used a very important phrase that is spot on: in the course of his remarks, he asked why we are not doing more to try to shape the NHS around long-term conditions, given that, as he rightly said, some 70% to 80% of total NHS expenditure relates to long-term conditions, such as diabetes, chronic pain and dementia. As he also rightly said, increased longevity means that more and more people are living with more and more of those conditions. We need to deal with long-term conditions—this relates to a point made by the hon. Member for Linlithgow and East Falkirk (Martyn Day)—on a preventive basis, on a care plan basis, and not necessarily on an ad hoc, repair basis; I think that was the word that he used. Those points are spot on and are why we need to continue to do better in the whole area of self-care.
It is worth reflecting on why, in many ways, the moment for self-care has arrived. The Self Care Forum has been doing a lot of work in this area for a number of years, but I think that there are several reasons why self-care is particularly critical at the moment. One is demography. We are getting older. That is a good thing, but the consequence is that about 1 million more people aged over 75 will be around in 2025. We will have more long-term conditions. That is just a natural feature of ageing. Those long-term conditions are precisely where self-care gives us the biggest bang for our buck, because there is absolutely no need to continue going to see the GP all the time. People have talked about pharmacies, and I will talk about that.
Another reason is that there is a general perception in the population that people are more empowered vis-à-vis their own health and what they will accept from health professionals. We often hear of people saying, “Well, it’s not a question any more of the doctor telling me what I should do, but of having a discussion with the doctor about that.” Where that takes us to, in terms of our expectations of the health service, is a whole load of things around choice and, in particular, personalisation. Self-care also has a role to play in that. Part of it is about not just clinical outcomes, which is where we have come from historically, but out-turns that consider the general wellbeing of an individual.
The right hon. Member for Rother Valley made the point about social prescribing as a big part of that, and it absolutely is. Increasingly, it is important not just that patients with diabetes manage glucose levels and all that goes with that, but that they exercise. It might be just as appropriate for them to be referred to a football team or to talk to someone else with diabetes, in a mentor group. Frankly, social prescribing needs to be commissioned by CCGs as much as some of the clinical things that have happened in the past.
Another area that has made self-care even more prominent, and which is a component of it, is technology. We have not talked yet about technology, but there is a lot more out there. It ranges from people just being able to look at Google, see what is wrong with them and take a view—that can be dangerous and is not always to be recommended, but nevertheless it empowers people in a way that did not exist at one time—to some 900,000 applications to do with health and fitness that have been developed. I believe that iTunes alone has 47,000 health apps. People who are interested in all that stuff—and possibly more IT literate than I am—can use all those, and they do. The combination of those things has meant that the whole ethos of “Doctor knows best” is giving way to much more of a dialogue and a care plan orientation, and a big part of that care plan will be self-care.
What is the Government’s response? That is the challenge that we received from the hon. Member for Washington and Sunderland West. I suppose there are two areas. There is the whole general area of public health. I will not get into a discussion about the relative size of budgets and all the rest of it, other than to say that the Opposition’s position on where we should spend more money versus less money in the health service and anywhere else would be stronger if occasionally they agreed that in some areas it is right to spend less in order to spend more in other areas. If their position is that we must always spend more money on everything, their comments may be taken by Ministers with a bit more of a pinch of salt. I merely say that in passing.
In terms of awareness and education, the right hon. Member for Rother Valley made a good point, which I had not thought of, about health education in schools being a step up from other types of education. There does need to be more awareness, and I will mention a small thing that I became aware of recently. One of my responsibilities is dementia, and I had not realised that obesity is a major factor in someone’s likelihood of getting dementia. I know that now, and perhaps everyone else in the Chamber also knows it, but I suspect that many people do not; I do not think why obesity and dementia go together is that intuitive. That is an example of the need for awareness.
Let me talk about the sorts of things that the Government need to encourage and are encouraging. We have a campaign on stopping smoking—Stoptober. We have “Everybody Active, Every Day” and Change4Life, which involve people taking control of their diet and how they live. I talked about dementia, and there is the dementia friends initiative. There are some 1.7 million dementia friends now. Dementia has become the condition that most people die of in the UK, and dealing with that will be a real challenge in the years ahead.
That is about public health, but we have a whole stack of things to do with clinical outcomes. We have put into the NHS mandate a clear requirement for it to improve its response to long-term conditions, with a clear requirement for self-care to be part of that. That includes the need for more personal health budgets. Some 4,000 people now have a personal health budget; those budgets are analogous to personal care budgets. Our target for 2020 is between 50,000 and 100,000 people having such budgets. That is about choice and about control. Various tools are available for patient activation and to help patients understand the sorts of choices they can make day to day. NHS England has a target of 1.8 million people accessing tools, as well as being assessed on where they see themselves on the self-care spectrum and what they are doing about it.
It is worth talking briefly about the STP process. The shadow Minister made the point that we spend too much on acute healthcare in this country and not enough on primary care, on mental health and on the self-care options that we are talking about, including pharmacy, which I will talk about. The STP process is a precise attempt to make self-care happen in a structured bottom-up way. If the Opposition oppose the STP process at every turn, as opposed to acting as critical friends, which is how all MPs should act, they oppose what could be some very sensible, thought through and locally driven reforms to healthcare that may well result in higher budgets for prevention, which is a point that she made, and a tilt away from our spending so much of our budgets on secondary care and hospitals, which are very expensive.
NHS England has produced a book about self-care that was printed last week. “Realising the value” is about empowering people to make their own decisions about medicine and care and engaging in the community. There is a lot in the book, which was produced by Nesta, that is valuable and good. I guess it is an attempt to embed some of the things that we have been talking about. National Voices, the Health Foundation and voluntary organisations were involved in it.
Social prescribing is a large part of the initiative, which is about peer groups and making sure that people who have a diabetes issue are not overwhelmed by concerns about losing a limb and about glucose levels changing. It is about managing all of those types of things and ensuring people look at their own diet and at whether they are doing enough exercise or sport and are in a group of like-minded people with the same issues. If I were diagnosed with diabetes, it would be valuable to me to talk to people who had had it for a few years. That is as valuable as going to see the doctor and his telling me what I should be doing.
The right hon. Member for Rother Valley made the point that roll-out is patchy. In truth, many things are patchy. All we can do in the centre is try to encourage CCGs to consider the advantages of what they have in terms of their own business case: a reduction in the number of visits to GPs and so on.
On the role of pharmacy, the hon. Member for Linlithgow and East Falkirk rightly said that I was on record as saying that we have something to learn from where Scotland is in pharmacy. I will say it again: I think we have. We are doing our own review in England—the Murray review—of the services we want to see in pharmacies over the next few years. I have absolutely no hesitation or compunction in saying we could learn from Scotland. I do not take a “not invented here” view. A phrase I always used at work was “steal with pride”. If there are bits in the Scottish model that we can take and steal, we will.
On the direction of travel, the right hon. Member for Rother Valley chairs the APPG and he knows my view is that we need to move pharmacies away from predominantly dispensing and being paid for dispensing into a model with many more services in it. That is what we are determined to do. As we go through the process, that is what we will do. A fund of £300 million between now and 2020 has been set up. There is a lot of opportunity, and the hon. Member for Linlithgow and East Falkirk gave us some examples. We have announced two things already: the urgent medicine supply service and NHS 111. If someone is out of medicine, particularly if they have a long-term condition and have not had their prescription revalidated, NHS 111 has historically told them to go and see an out-of-hours GP or even an A&E service in order to meet a doctor to get the problem sorted. We are changing the script so that 200,000 calls a year will be directed to pharmacies, which will be empowered to make a judgment about the patient and will write the prescription and dispense the medicine. That is a big change and that is exactly where we need to go.
We heard from the hon. Member for Linlithgow and East Falkirk about the national minor ailments scheme. In England, we are now committed to rolling that out nationally by April 2018 so that the list of minor ailments that the hon. Member for Linlithgow and East Falkirk talked about will be treated in pharmacies in England. The pharmacist will be paid separately for the consultation and any dispensing that comes from it.
Another service-based activity in pharmacies was announced two weeks ago by Simon Stevens: the sore throat pilot. Pharmacists can do a test to determine whether someone’s sore throat is a bacterial or a viral issue. If it is bacterial, they will send someone to a doctor so that they can have antibiotics prescribed. If it is viral, they will not. As that service is rolled out nationally, it will save 800,000 GP consultations a year, but this all also relies on awareness and all that goes with that.
Diabetes self-care is a big area on which we can make progress. Diabetes is a growing problem and people will benefit greatly from individual care plans and social prescribing. We have changed the GP contract so that when GPs identify type 1 or type 2 diabetes, they put the person on a structured education course. GPs are now being paid for the numbers of people they get on to such courses. A big part of those education courses is explaining better to people how they can self-care.
I was going to talk about technology—I have probably spoken for long enough, but perhaps I will deal with some of the various points that were made. The right hon. Member for Rother Valley asked about the personal allowance in care homes, which he is right to say was not uprated. I will get back to him on the rationale for that. I suspect the reason is, as we know, that the care sector is under financial pressure. However, the money was not cut, but went to the rest of the adult social care budget. A judgment has to be made about what is adequate and where money is best spent, but I will write to him with a fuller answer to his question.
The right hon. Member for Rother Valley also talked about the need for a national strategy on self-care. I have been a Minister for about four months now. My general learning point would be that we need fewer strategies and more implementable plans, and I suspect the right hon. Gentleman would agree. We need to do things, and there are some things that are quite sensible. I have talked about some of them, but they need to happen. We need to go further and faster.
I agreed with much of what the hon. Member for Washington and Sunderland West said. She talked about a wholesale rethink, which is what we are trying to do with the STP process. The Opposition would do well to not necessarily oppose every part of that, but to act as critical friends, as all MPs must. She made good points about making every contact count. She talked a lot about common sense, which I completely agree with. I guess she will not be surprised to know that I am not going to talk to her about the autumn statement; all I will say on money is that the UK now spends more on health as a proportion of GDP than the OECD average. It is about one percentage point less than France and Germany; that is about where we are, and it is clearly critical that we look properly at every area of expenditure and maximise its value. I believe we did so with pharmacy, and we are trying to do it with the STPs, as regards the difference between secondary care and primary care.
The hon. Member for Linlithgow and East Falkirk made the point that in the thrust towards self-care—which is right—we must still be careful to say that people sometimes need to see a doctor. Sometimes there is something serious wrong. Too many people go to the doctor too often with trivial things; but on the other hand people do not always know when they have the initial symptom of something serious—it can be something that looks benign, or a lump or something. It is important to understand that GPs are there to look after such things. We need to be aware of that in the drive towards self-care. I thank the hon. Members who spoke in the debate.
Sir Kevin Barron
The hon. Member for Linlithgow and East Falkirk (Martyn Day) and my hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson) mentioned groups in their areas that help people with long-term conditions, and those are a resource that we should use. My hon. Friend spoke about prevention, and that is right; we need it. The need for the NHS and taxpayers’ money will never stop if we cannot turn around the health of the nation. Population health is something we must attend to.
As for the minor ailment scheme that the hon. Member for Linlithgow and East Falkirk described, we have one in my area; I hope that they will be rolled out nationally. However, I wonder how many people know that really they should go to the pharmacist. Pharmacies are open all the time—at the weekend as well—but people drive past them to the A&E. We need to look at that issue.
The Minister spoke about health education and there is no doubt in my mind about it: as a Rotherham MP I know about the problems caused by not having good sex education and, more importantly, personal relationship education in our system. We have it now, having gone through the awful child sexual exploitation experience of practically two decades in Rotherham. It seems to me that it is also important to have continuing health education, including educating people about the system and where to engage with it.
On sustainability and transformation, on Friday morning this week the Rotherham MPs will have a meeting with the lead person on the issue from South Yorkshire, Sir Andrew Cash. On 16 December we will visit a pilot scheme running in the constituency of my hon. Friend the Member for Rotherham (Sarah Champion). There is a group of 30 patients and two or three GP surgeries who are working with other health professionals in the acute and primary sectors, and other organisations such as Voluntary Action Rotherham, which runs social prescribing. They are going to run a pilot to see how well it is possible to look after people and improve population health.
I do not want to get dragged too far on to this point, but the Minister talked about referring people with long-term conditions to football teams. I hope that is not a slight on Rotherham United, which is at the bottom of the championship at the moment, some eight points adrift, as it were. I have been a supporter for nearly 60 years and will continue to be one, but I think now and again one or two of them might have some problems that need sorting out—with the pharmacist or others.
We have had a short but good debate, in which we recognised that self-care and preventive healthcare will be crucial to the future of the nation and its people.
Question put and agreed to.
Resolved,
That this House has considered Self Care Week 2016.
Heathrow Expansion: Air Quality
(8 years, 1 month ago)
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Dr Tania Mathias (Twickenham) (Con)
I beg to move,
That this House has considered the effect on air quality of proposed Heathrow airport expansion.
It is a pleasure to serve under your chairmanship, Mr Hollobone. As you and the Minister are aware, I have spent much time in Parliament on the issues of Heathrow and Heathrow expansion because many of my constituents in Twickenham are concerned. It is therefore a great disappointment to me that the Government recently decided to support Heathrow expansion, and I reiterate that I am still firmly and utterly opposed to that decision.
Ruth Cadbury (Brentford and Isleworth) (Lab)
I congratulate the hon. Lady, my constituency neighbour, on securing this debate. I alert the House that many MPs for constituencies in and around Heathrow airport have constituents who are worried about the implications of the proposed expansion and about air quality, which is increasingly important locally.
Dr Mathias
I thank the hon. Lady for making that important point, as this not only affects Twickenham. Four councils are currently taking the Government to court over air quality because of Heathrow. Air quality is an important concern for many people.
The people, like the hon. Lady, know that Heathrow is not deliverable on many levels, including cost, noise pollution and the upcoming legal challenges, but the insurmountable challenge, and the reason I secured this debate, is air quality. The Minister will know that air quality is a major and increasing concern, and he may recall that in January 2016 I asked the then Prime Minister about the shocking news that the annual legal limit for nitrogen dioxide had been breached in London by 8 January. A map of nitrogen dioxide levels across London and Heathrow shows high concentrations in central London and Heathrow. Nitrogen dioxide, of course, affects the lungs, particularly in people with asthma or bronchial conditions, and decreases lung function growth in children.
Perhaps of even more concern is particulate matter. I am sure the Minister is aware of the World Health Organisation’s comments on particulate matter, which affects more people than any other pollutant. Although I will be talking about the legal limits for PM2.5 and PM10, I remind him that the WHO has said that for PM2.5
“no threshold has been identified below which no damage to health is observed.”
There is no safe level but, just like for nitrogen dioxide, London breached the annual legal limit in the first few months of this year. Forty cities in the United Kingdom have already breached the annual legal limit for PM2.5, and London is in the top six. PM10 is also of serious concern. Only 11 cities in the United Kingdom breached the annual legal limit in the early part of this year, and London is in the top four.
Particulate matter contributes to fatalities from strokes, heart disease, lung cancer and acute and chronic respiratory diseases. The cost in human terms is that 9,000 deaths a year in Greater London are attributable to nitrogen dioxide or particulate matter, which are just some of the air pollutants. Four thousand deaths in 1952 gave rise to the Clean Air Act 1956. Now we have more than double that number every year, and the Government are not doing enough.
What concerns me is that, within just over a week of the Government’s being found guilty in the courts of not having an adequate plan to address air quality, they decided to approve Heathrow expansion. The expansion will involve perhaps 50% more planes. The Minister might say that it is not the aircraft but the cars that are adding to the air pollutants, but Heathrow lies near the M4 and the M25, two of the country’s most congested motorways. He will also know that, with nearly 250,000 more flights planned, there will be thousands more passengers and staff, and they will not be walking to and from Heathrow airport.
The number of cars will increase, and I do not agree or accept that electric cars will be the answer. There are 11 million diesel cars in the United Kingdom, and they will not be scrapped and replaced in time for the proposed Heathrow expansion. I do not want to hear that putting on facemasks will protect us from particulate matter, because the British Lung Foundation says that there is no evidence that that will help.
Heathrow implicitly acknowledges the risk to air quality. I am sure the Minister has a well-thumbed copy of the Airports Commission report, and page 225 states that £799 million will be spent on car parks at an expanded Heathrow. That will increase air pollutants, which are already breaching legal limits. Heathrow Airport Holdings Ltd will argue about how much it wants to spend on surface access—that is one argument—but nobody who favours Heathrow expansion denies that surface access will increase, which means more road trips and more pollutants.
Dr Mathias
I will in a while, if I have time.
Heathrow airport prides itself on being a leading cargo airport. Again, cargo and freight are not coming to and from Heathrow in an electric car or on a horse and cart. My question to the Minister is simple: if the Government support Heathrow expansion, how will they get air quality within legal targets? I have asked two Prime Ministers, two Secretaries of State for Transport and a Minister from the Department for Environment, Food and Rural Affairs how they can expand Heathrow airport without increasing air pollution. Thus far, I have been assured that it will happen, but I have not been told how. I hope that today, at the sixth time of asking, I will be told.
Howard Davies spent years and millions of pounds of taxpayers’ money on his commission’s report, and he said on page 307 of the Minister’s well-thumbed copy that
“an expanded Heathrow Airport must be contingent on acceptable performance on air quality.”
Howard Davies said that that was needed but, again, the report did not specify how it would be achieved. We need airport expansion, but it must be in a place where the legal limits for air pollution have not been breached.
Andy Slaughter (Hammersmith) (Lab)
I congratulate the hon. Lady on securing this debate; she is making a compelling case. The overwhelming body of legal and expert opinion on environmental and transport matters is that it is not sustainable. Does she agree that it is a welcome sign that the Mayor of London has put the resources of TfL behind the campaign, and will support all of us who are campaigning to ensure that Heathrow does not expand, because of that particular risk?
Dr Mathias
I thank the hon. Gentleman for that absolutely brilliant point. I would think that the Mayor of London supporting the campaign would focus the minds of the Minister and the Cabinet, because four councils—Richmond, Wandsworth, Hillingdon and Windsor and Maidenhead—are taking the Government to court for noise and air pollution as a result of the proposed Heathrow expansion. Ministers have a chance to change their minds and deliver runway capacity in an area where air pollution is not so critical. No other place in the United Kingdom is as vulnerable as the area around Heathrow, close to Greater London.
If the Government continue to support Heathrow expansion without a plan to reduce air pollution to within safe medical and legal limits—it must be done in a critical time frame, as ClientEarth told the Government in the Supreme Court and the High Court—I will ask the Government to admit that they are wilfully and knowingly increasing the number of deaths attributable to air pollution caused by an expanded Heathrow.
Mr Philip Hollobone (in the Chair)
Before I invite the Minister to respond, I warn him that I am likely to interrupt his speech if a Division is called in the House.
The Minister of State, Department for Transport (Mr John Hayes)
It is a delight to serve under your chairmanship, Mr Hollobone. I am pleased to congratulate my hon. Friend the Member for Twickenham (Dr Mathias) on securing this debate. She has been a regular, repeated and determined advocate for the case that she makes today.
The Government are straightforward about our plans, as my hon. Friend made clear in her speech. The Secretary of State has announced the steps that we are taking in respect of Heathrow, which she has drawn to the House’s attention, but in doing so, the Secretary of State was absolutely clear that it will now be subject to a consultation, that it will be gauged according to that consultation and that the Government are committed to the interests of local people, just as we are committed to the interests of people who wish to travel to and from Heathrow. Of course, she is right to suggest that squaring those two objectives is a significant challenge, but it is one that the Government are willing to meet.
Neil Parish (Tiverton and Honiton) (Con)
Does the Minister agree that airport expansion can cause pollution not only from aircraft but from traffic going to the airport? We need many more electric cars, and we need to ensure that public transport runs not on diesel but on petrol or hybrid. What are the Government doing about that particular situation?
Mr Hayes
It is apposite that my hon. Friend, with his usual insight and judgment, should raise that matter. Just this morning, I gave evidence to the Lords Science and Technology Committee, which is producing a report on exactly that subject. The Committee asked telling questions about the pace of those developments, their character and what social and environmental effects they might have.
Mr Hayes
I will in a second, after I finish this point. I was able to orate at considerable but not excessive length on all those matters. My hon. Friend the Member for Tiverton and Honiton (Neil Parish) will have a chance to see the report. In addition, because I always like to go that one step further than other Ministers, I will drop him a line summarising, given that I know his interest in these matters—[Interruption.]
Mr Philip Hollobone (in the Chair)
Order. I am sorry to interrupt the Minister; he can continue his remarks when we resume. A Division has been called in the House. If there is one Division, the sitting will be suspended until 4.30; if there are two, we will resume at 4.40, and the Minister can continue his remarks then.
Mr Philip Hollobone (in the Chair)
Order. The sitting is resumed. Those Members who are here for the debate on the electrification of the great western line are 15 minutes early, because we are 15 minutes behind schedule because of the Division. You are most welcome to stay; you may learn something about air quality at Heathrow. The Division rudely interrupted the Minister, whom I invite to resume his remarks.
Mr Hayes
Those who were present earlier had the excitement of hearing the beginning of my speech; those who have joined us rather later are going to have the excitement of the peroration. It is almost like having two bites of the cherry for those who have been here throughout.
Before the sitting was suspended briefly, my hon. Friend the Member for Tiverton and Honiton had asked me about electric vehicles. I do not want to go down that road, and I do not think you would permit me to do so, Mr Hollobone; it is sufficient for me to say that I will write to him, summarising the evidence I gave to the Lords Science and Technology Committee this morning to better inform further consideration of that important matter.
Dr Mathias
Although I absolutely applaud electric cars, there are 11 million diesel cars. The point is the timeframe. I do not believe that the Government will move to all cars being electric, with no air pollution, in the timeframe within which they want Heathrow expansion, which cannot take place with air quality levels as they are.
Mr Hayes
I would not claim for a moment, and have not done so, that we are going to have an entirely electric fleet of cars, privately owned or otherwise, in the near future. Nevertheless, the intervention of my hon. Friend the Member for Tiverton and Honiton is reasonable, given that that is a factor that will affect the way we drive in future, with a consequent effect on emissions.
Dr Mathias
Does the Minister agree that because air pollution is at such a dire, illegal level, complete electrification is the only way we will be able to get safe levels in future?
Mr Hayes
My hon. Friend clearly has greater prophetic powers than I do. I would never want to have claimed to have second-guessed the whole of the future. Technological change is, by its nature, unpredictable, and the circumstances we currently face are highly dynamic. We know that electric vehicles are here and established. The numbers being driven are growing and the Government support that. I fully anticipate that number continuing to grow significantly. It will affect emissions accordingly, but there will be other technological changes in the near, medium and longer term, and they are likely to make cars more efficient. Frankly, I suspect that those changes are also likely to have a beneficial effect on emissions. As I say, though, far be it from me to be a prophet in those terms; I simply try to do my best to estimate what is happening now. It is difficult enough to do that, let alone to be more ambitious.
I turn, in the short time available, to my hon. Friend’s salient remarks—salient in the sense that they are relevant to the debate in a rather stricter way than the territory into which we were just straying. My right hon. Friend the Secretary of State for Transport announced the decision on the north-west runway at Heathrow—as a preferred option, I hasten to add—in the following context. He said that, among other things, expanding Heathrow will better connect the UK to long-haul destinations in growing world markets, boosting trade and creating jobs. Passengers will benefit from more choice of airlines, destinations and flights, and expansion at Heathrow will be subject to a world-class package of compensation and supporting measures for local communities. My right hon. Friend also made it clear that the Government’s announcement was just the beginning of the consultative process I described earlier, which will allow my hon. Friend the Member for Twickenham and others in the community and elsewhere to make their views known.
Let me be clear on the impact of the expansion. The Government’s commitment to dealing with emissions will be central to the discussion of the air-quality impact and to meeting the challenge of balancing the need to grow airports with the need to maintain the health and wellbeing of the people who live near them, and of all our people. We have made it clear that we must tackle air quality and noise and meet our obligations on carbon, both during and after construction of the expanded airport.
Dr Mathias
I greatly appreciate the Minister’s giving way again. Will he confirm whether I am correct in concluding that if the consultation shows that air pollution levels cannot be brought within legal limits, Heathrow expansion will not take place?
Mr Hayes
It would be entirely inappropriate of me to prejudge the consultation, still less its outcome, as my hon. Friend invites me to do. Nevertheless, given her absolute consistency and vehemence in defence of the cause she has identified today, I shall give her my 10-point summary of the issues. Ten points is the very least she deserves, given her consistency.
First, air quality is a significant national health issue, as my hon. Friend says, and the Government take it seriously. However, she knows that the prevailing issues of air quality associated with an urban environment—indeed, those associated with the kind of cars we drive and how that is changing—are the most significant feature of some of the public health arguments that she made earlier. We should not be preoccupied with assuming that airport expansion is the be all and end all in this, and I am sure she is not so preoccupied.
Secondly, the Government are already taking action to cut vehicle emissions. For example, the UK is delivering a programme, backed by £600 million of investment, to support the long-term transition to low-emission vehicles, to which I referred a moment ago.
Thirdly, the Department for Transport, the Department for Environment, Food and Rural Affairs and the Treasury have already embarked on a joint project to identify further ways in which we can tackle this issue. Indeed, if the consultation goes that way, by the time a new runway opens in the next decade we intend to have made substantial progress in tackling air-quality challenges throughout the whole nation.
Fourthly, as announced in December 2015, we tested the Airports Commission’s analysis against the Government’s 2015 air quality plan. Nevertheless, my hon. Friend is right that the evidence base in this policy area is ever shifting, and we do need to recognise that there is more work to do; I happily do so today. We have to keep our assessments up to date and to take account of changing technology and what that brings.
Fifthly, Heathrow airport will have to play its part. The new runway must be underpinned by further industry-leading measures to mitigate air quality impacts.
Sixthly—I am rattling through these points because I am conscious of the time, Mr Hollobone, and this Chamber deserves as much information as possible—the Government believe that, with a suitable package of policies and mitigation measures, the Heathrow north-west runway scheme can be delivered without impacting on the UK’s compliance with air quality limit values.
Seventhly, final development consent will be granted only if the Secretary of State is satisfied that, with mitigation, the Heathrow scheme is compliant with legal requirements on air quality. I do not think that is quite what my hon. Friend asked for—as I say, I do not want to prejudge the consultation—but she must be pleased with what I have said today; she would be churlish not to be.
Dr Mathias
The Minister is being very generous in taking interventions. Will he confirm that, after all these measures are taken, if air quality levels are illegal, the beginning of any construction for a third runway at Heathrow cannot and will not take place?
Mr Hayes
For the sake of clarity, I will repeat exactly what I said for the record. Final development consent will only be granted if the Secretary of State is satisfied that, with mitigation, the Heathrow scheme is compliant with legal requirements on air quality. Whether that is quite what my hon. Friend wants or not, I do not know, but I think that is quite a big commitment to make and it is certainly made in the spirit that I described earlier—that of a Government who are absolutely concerned to do the right thing by local residents and in terms of emissions generally.
Ruth Cadbury
I thank the Minister for giving way. Last week at Transport questions, I asked a question about an issue that concerns my local area, which is the proposed expansion of the M4, which, so far as I can see, would be needed if the third runway is given the go-ahead. Will the Minister comment on the impact on air quality of a tunnel coming up either in Brentford or Chiswick?
Mr Hayes
Yes. Among my many responsibilities, although I know that Members in this Chamber think that they are too few, are big roads, and the M4 is indeed a big road. However, it is important to point out that in any expansion that takes place at Heathrow, a range of transport connections would be considered. I know that Heathrow is considering how people would get to and from the airport. That will not just be by car. The hon. Lady will know that about 45% of people currently make their journey to and from Heathrow by private vehicle, but that number is not fixed in stone. One would hope that—indeed, I would expect it to be so as part of this package—all kinds of innovative solutions will be delivered as to how people can get to the airport efficiently.
Therefore, I do not want to prejudge that issue and I certainly would not want either to say anything that contradicted the answer that the hon. Lady received last week, because the question then was not posed to me; I think it was posed to the Secretary of State. I reassure the hon. Lady that we are broad-minded about the means by which people get to and from Heathrow and the effects that might have on local people.
Let me make my last three points, because I promised 10 points and so far I have delivered only seven. The Government have also made it clear that we must tackle noise and I know that my hon. Friend the Member for Twickenham is also concerned about this. We will also meet our obligations on carbon. On noise, Heathrow Airport Holdings Ltd has committed to a ban on scheduled night flights of six and a half hours, more predictable periods of respite for communities and new and binding noise targets.
Ninthly, the Government’s announcement was just the beginning, as I said, of the process, as the preferred scheme will now be subject for consultation through a draft airports national policy statement that will follow in the new year. Of course, that is something to look forward to after the excitement of Christmas.
Finally, it is important to point out—I know that my hon. Friend is very conscious of this and I thought she deserved an answer on it—that the Government accept the recent High Court judgment that more needs to be done to improve the nation’s air quality. That does not apply simply to airports; I am looking at a range of transport modes, as she will doubtless appreciate. I can tell her that the Government will produce a revised plan by 31 July 2017 and my team in the Department for Transport are beavering away and working with other relevant Departments to make sure that the plan meets all the necessary requirements.
Jonathan Lord
I thank the Minister for giving way. Many experts, commentators and indeed Members of this House feel that the air quality projections made to date have been somewhat fanciful, including a large dose of wishful thinking. Can he reassure us that there is anything in the next year’s worth of consultation that will be more robust, and that the Government will take note of what many experts are saying?
Mr Hayes
I can give an absolute assurance that while I am the Minister of State at the Department for Transport all that we do will be studious and robust, and that includes the considerations of the kind that my hon. Friend has identified. It is important that we do the work to produce an evidential argument and also articulate that argument in a way that sends the public a very clear message—this Government are serious about transport and about wellbeing. All that we do in the Department, while I have influence over it, will be gauged by wellbeing and the effect that it has on the national interest and the common good.
Question put and agreed to.
Resolved,
That this House has considered the effect on air quality of proposed Heathrow airport expansion.
Great Western Line: Electrification
(8 years, 1 month ago)
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Charlotte Leslie (Bristol North West) (Con)
I beg to move,
That this House has considered electrification of the Great Western line.
It is a pleasure to serve under your chairmanship, Mr Hollobone. This is a debate that I never wanted to have to bring to the House and I am sure that many other Members felt the same. In doing so, I acknowledge that the Minister—the Under-Secretary of State for Transport, my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard)—is relatively new to his post and that many of the problems I am highlighting will be ones that he has inherited. I also acknowledge that he has been and remains a formidable constituency MP, as well as now being a great Minister, so I hope that he will forgive many of us for expressing passionately the views and interests of our constituents. That goes to the heart of why I called for this debate, because I am sure that there are those somewhere who will say, “What is an MP for Bristol North West doing having this debate?” Neither Bristol Parkway nor Bristol Temple Meads are in my constituency, so some will say, “Well, she’s not affected by this.” However, anyone who says that an MP such as me is not affected by this issue misunderstands fundamentally the nature of transport and the nature of our railways in particular.
Our railways are not simply stretches of iron rail in the location where they are constituted; they are the circulation system, if you will, of our regions, our communities and indeed our entire nation. If something happens to one part of that circulation system, it has wide-reaching effects and impacts on the body as a whole.
I applied for this debate because of deep concern about the recent Government announcement of the deferral of electrification, which yet again appears to leave the south-west region trailing behind other parts of the country in terms of transport infrastructure investment.
Mr James Gray (North Wiltshire) (Con)
I am most grateful to my hon. Friend for giving way. I am sorry to interrupt her so very early in her speech. I know that most of the speeches in the Chamber this afternoon will be about the problems and the deferral of electrification. However, would it not be gracious to say that 10 years ago there was no prospect whatever of electrification anywhere to the west of London? We should be glad that this Conservative Government have delivered electrification as far as Chippenham—in my constituency, or just outside it—and that we have quite a few things to be grateful for, albeit that we also have a few problems.
Charlotte Leslie
It is always a profound joy to give way to my hon. Friend. If he had waited for a small amount of time before intervening, I would have come to that point. However, since he has made that case, I can skip over some of my speech, because it is a very valid point. We do not want to let the best become the enemy of the good and I want to acknowledge where we are.
Karin Smyth (Bristol South) (Lab)
I do not want to dispute the hon. Gentleman’s maths, but given that the decision to electrify the railway was made in 2009, which is less than 10 years ago, I beg to differ with what has just been said.
Charlotte Leslie
The hon. Lady also anticipates something that I will raise in my speech. Whichever Government want to make dramatic railway infrastructure improvements, they face challenges. Whether a Labour Minister or a Conservative Minister was sitting in the Minister’s chair here, I suspect that the challenges involved in delivering what they want to do could be very similar. I will come back to that point in my speech.
I am afraid that all south-west MPs might agree that, when we see the bills for HS2 soaring to £42 billon, the deferral of our meagre-by-comparison £5 billion project is particularly hard to swallow, especially since the south-west has consistently been among the bottom regions in the league tables for regional spend per capita.
The south-west is a region that boasts exciting opportunities, that is incredibly fast-growing, and that desperately needs the kind of focus on rail investment that we have seen with HS2 and Crossrail. So, forgive me, Minister, if I say for the south-west that, when it comes to seeing actual infrastructure—not promised but built—many people in the region feel that it is now our turn.
Nevertheless, returning to the point that my hon. Friend the Member for North Wiltshire (Mr Gray), raised, there have been improvements and the Government are making efforts. I must also be fair about the context of this debate. I recognise that, this deferral notwithstanding, the region will still receive, which it might not have received otherwise, 5,000 extra seats on journeys into London at peak time. Most of us have made that journey, so we know that those seats will be welcome. We have been promised new trains, which will deliver faster journeys. We are told that there will be station improvements down the line. However, I hope that the Minister will forgive me for being honest and saying that, given the recent announcement of the deferral, we will believe these things when we see them. I would also appreciate a bit more clarity in the Minister’s response about the exact tangible benefits we will get in return for what has been a hard blow in the form of the announcement of deferral.
As I said, the improvements are welcome, and I do not want to be ungracious by denying that. However, major concerns remain about what the decision says about how we do big infrastructure projects and I will be asking the Minister specific questions. If he is not able to answer them today, I would deeply appreciate a detailed written response.
John Penrose (Weston-super-Mare) (Con)
I want to pick up on my hon. Friend’s earlier point about the south-west not always being at the front of the queue for such things. Bristol is, I think, the fastest-growing core city outside London, and therefore has a huge economic benefit to bring to the country. Does my hon. Friend agree that it is strange, therefore, that other areas have been given preference on the list for electrification? The deferral also includes the deferral of some of the Thames valley commuter lines and some of the lines to Oxford. Would it not now be sensible to re-examine the business case for the electrification of some of the lines radiating out from Bristol, on the basis that the economic case for Bristol’s economic zone must make it more attractive? That would go some way towards addressing the relatively low priority that Bristol and the south-west have previously been afforded.
Charlotte Leslie
If Hansard could kindly ascribe my hon. Friend’s comments to me I would be very grateful, because that is exactly the point I want to make. Yes, it does seem strange. It plays to a historical view that the south-west is always overlooked. I do not understand why we seem to have been axed when other places still seem to be a political priority. On the economic arguments, that does not make sense.
Fiona Mactaggart (Slough) (Lab)
It is not just the south-west that has been axed from the great western line electrification. I had hoped to be able to contribute to the earlier debate about air quality around Heathrow. One thing that will damage air quality around the airport is the fact that the Windsor-Slough link will remain a diesel one—it will not be electrified, as was originally promised. People like me supported the original proposal for the third runway at Heathrow because we were promised that electrification.
Charlotte Leslie
I start my speech by saying that what happens in one area of the country affects another and then I go on to make an unapologetically biased—not biased, but strong—case for the south-west, but I hear exactly what the right hon. Lady says. Something happening in one region deeply affects another, but I continue to make a special case for the south-west, which has not, historically, had its merits duly considered by the Department.
Kevin Foster (Torbay) (Con)
Does my hon. Friend agree that one example of how the south-west does not benefit from investment is that at the moment it is impossible to get a train from Plymouth or Exeter to Bristol along the very great western network on which we rely?
Charlotte Leslie
I think that anyone who has travelled that route will echo, with gusto, what my hon. Friend has just said.
Moving on to macro-level concerns, I find the National Audit Office report into the functioning of Network Rail, and into the Department’s ability to project manage and to hold Network Rail to account, deeply concerning. I do not doubt the good intentions of all those involved, but we read in that report about over-optimism from Network Rail on significant elements of the electrification project and about inadequate project management. And the list goes on. The trouble is that it has become almost a matter of course over the years—I have to say, spanning various Governments—to expect any rail project to go way over budget and way over time, under Network Rail. If Britain is to stand a chance of competing globally, that simply is not good enough. I have to add that, from what I have seen, I do not think that Network Rail is a particularly good advert for those who still argue that the state should be running more of our railways. Given Network Rail’s performance, that idea fills me with absolute dread. I am not ideological on that point; I just like to see things work well.
It would be helpful if the Minister could outline what he sees as the main challenges for not just his Government but any Government delivering fit-for-purpose infrastructure projects under our current systems. I am particularly interested in knowing what levers he, as a Minister and an elected representative, has for holding Network Rail, which is, as I understand it, a state function, to account.
I have to confess to being a little confused on a matter of principle regarding the deferral of electrification. I know that the Government are saying that customers need not worry because we will get bigger and faster bi-mode trains delivering all the benefits of electrification without the need for that expensive “wire in the sky”, but if everything is so awesome without electrification, why are we still talking about it at all? If it is all so awesome, why would such improvements from bi-mode rolling stock, for a fraction of the cost, not make electrification a redundant technology? And if it is not redundant, will it not cost more in the long term to do it later rather than sooner? We need more clarity about the Government’s view of the merits of electrification.
I come now to more specific concerns. Have there been wasted works? It seems that significant investment has already been made in preparatory work for electrification that has now been deferred. Can the Minister give a figure for how much that has cost and can he provide a cast-iron guarantee that it is not now money wasted? I understand that Network Rail has suggested that the work to Bristol Temple Meads may now be completed by control period 6. Can the Minister clarify when during CP6 that might be?
Now that there has been a deferral of what was much vaunted electrification, questions are inevitably being asked about the other elements of the modernisation programme. The deferral announcement has dented confidence, and we really need that confidence to be rebuilt. Can the Minister assure us that the other core elements will be completed, such as the Filton bank capacity enhancement project, the new Hitachi hybrid intercity express trains and the two new services per hour between Bristol Temple Meads and London Paddington that those trains will enable?
Craig Williams (Cardiff North) (Con)
I congratulate my hon. Friend on securing the debate. As a Welsh MP—the only one here, I think—I add my weight to the argument that the south-west is under-represented where infrastructure is concerned and that there is a lack of confidence. Wales is also under-represented. Will the Minister, in his concluding remarks, outline the timetable for the main line electrification and reassure us that that will not slip? Confidence has been knocked.
Charlotte Leslie
I thank my hon. Friend for raising that extremely good point.
I know that many other Members would like the chance to speak. My final concern, which has been raised locally, is about rolling stock. The effect of the deferral of the electrification of the Thames valley branches on the planned cascade of the Thames turbo class 165 and 166 rolling stock to the west of England is vital to the MetroWest phases 1 and 2 projects. I have been very public about what seems to me, and to many others in the region, an appalling missed opportunity on the part of local decision makers—their failure to prioritise the Henbury loop line in the MetroWest scheme. I have been clear that I do not think that such schemes are ambitious enough to meet the exponentially growing branch line demand in our region; however, they are a start. If the MetroWest scheme, as it is, were to suffer even further detriment, that would be catastrophic for our city and our region. I cannot impress that upon the Minister enough. Can he give assurances today that the rolling stock cascade—the Thames turbo class 165 and 166—will not be affected by the deferral?
I turn briefly to the Bristol East junction and to Temple Meads, issues that the hon. Member for Bristol East (Kerry McCarthy) will probably want to raise in more detail than I will. I have been pleased to be able to work, in many ways cross-party, on rail for our city. Can we get assurances regarding the concerns about the future of the remodelling of that junction and about plans for transforming Bristol Temple Meads to accommodate new trains at platforms zero and one? I know that the hon. Lady will want to speak about that, but I would like some replies from the Minister.
This is an important debate for so many MPs and so many of their constituents. It is not, as I fear it might be seen by some, people fussing over whether we have wire in the sky. It is about the south-west being sick of being the poor relation in our nation’s transport projects while other high-speed projects go roaring on. It is about a real concern that this is somehow the thin end of a wedge that will see all the progress we have made over the past six years, of which I have been so proud, melt away. It is about all of us here, regardless of party, asking serious questions about whether the mechanisms and bodies that this or any Government have at their disposal to plan and build rail infrastructure are any longer fit for purpose. Given what we have seen of projects soaring over budget and over time and then getting paused, deferred, cancelled or any other word anyone would like to use, under an array of Governments, it is hard to believe that Network Rail is fit for purpose. If it is not, and assuming Britain wants to be a global competitor, can the Minister provide some thoughts on what on earth we are going to do about it?
Several hon. Members rose—
Mr Philip Hollobone (in the Chair)
Order. The debate is due to finish at 5.45 pm. It is an hour-long debate. It is very difficult to chair because I have an array of parliamentary talent before me and just over 20 minutes of Back-Bench time before I have to call the Front-Bench spokespeople. Unfortunately, I am going to have to impose a time limit of three minutes. If Members intervene on each other, some of you will not get called, but if you stick to three minutes, everyone will get in, and there may be time at the end to intervene on the Front-Bench spokespeople.
Karin Smyth (Bristol South) (Lab)
It is a pleasure to serve under your chairmanship, Mr Hollobone, and I congratulate the hon. Member for Bristol North West (Charlotte Leslie) on securing the debate. I will curtail my comments.
I speak for my Bristol South constituents, who also use Bedminster and Parson Street stations, when I say that the so-called deferral of this project has confused and outraged passengers in my constituency. We are confused because, despite the promises that we received and the significant disruption that we have tolerated, we have a half-finished project. We are outraged because the rail connections are such an important part of our economic development and our success. Bristol is key to the entire regional economy and that is why this is such a critical decision.
In 1835, an Act of Parliament created the Great Western Railway. In just six years, Brunel managed to build the entire thing from Paddington to Bristol—but in the last six years we have seen a complete lack of progress. Decisions have been delayed and deferred and now progress has been halted. At the Public Accounts Committee next month, we will consider the National Audit Office report and I would be grateful for comments from all Members. I suspect the hon. Member for Torbay (Kevin Foster) will also join that discussion. The report is very clear. Who is accountable now for the decision? Who is in charge of the plan to deliver benefits to passengers? Who lined up the key components of the new trains with the infrastructure and the operator? Who is managing the critical path alongside things such as the signalling works?
I have three asks of the Minister. If he does not have time to answer my questions, I would appreciate an answer in writing. First, is there still a case for electrification? What is now the Department’s analysis of the benefits for passengers in terms of journey times, frequency and capacity—dare I mention having a seat?—of bimodal trains versus electrification? We do not seem to know.
Secondly, Mr Brunel built the entire railway via an Act of Parliament, so why did the Department for Transport not at any point place an order under the Transport and Works Act 1992 for all the works? It might have taken longer to get to this point, but Network Rail would not have had to go through the myriad processes that it has had to, across the whole line.
Thirdly, what is the role of the regulator, the Office of Rail and Road? The Government have chosen to make it an arm’s-length body, but what is its responsibility in all of this? There is a political choice between enhancements and renewals or maintenance. The regulator has a clear role on renewal and maintenance, in light of its safety responsibility, but enhancement such as electrification is different. I am interested to know what the Minister thinks about that.
The core of the matter is passengers and our constituents. Whatever processes were undertaken to deliver the decision, it is true to say that as a result Bristol people feel we are being short-changed, and as we are the gateway to the region, the entire south-west region is being short-changed. Who is making these decisions on behalf of Bristol colleagues? Consider the make-up of the Government, the Cabinet and the Tory Front Bench. Apart from the Secretary of State for International Trade, the right hon. Member for North Somerset (Dr Fox), the south-west has no representation at the top table of Government. There are 51 Tory MPs in the south-west, out of 55. I congratulate them on their victory, but they have a small smattering of Ministers from their number to be able to deliver top decisions at the top table—
James Heappey (Wells) (Con)
It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate my hon. Friend the Member for Bristol North West (Charlotte Leslie) on securing this debate, and for representing my parents-in-law so well.
It was a real blow to hear that the electrification of the great western main line would be deferred beyond Bath Spa, not least because as Members for the south-west region, we had all rather hoped that over the course of this Parliament we would be making the case for electrification to go on beyond Bristol to Weston-super-Mare, to Taunton and then on down into the far south-west. The fact that we are now here asking for it to be electrified to Bristol as originally planned is somewhat disappointing.
I have just one station in my constituency, Highbridge and Burnham, which is some way south of Bristol, although many people commute from there to Bristol and on to London. Many more of my constituents access the rail network in the constituency of my hon. Friend the Member for Weston-super-Mare (John Penrose) at Worle, or that of my right hon. Friend the Member for North Somerset (Dr Fox) at Yatton. So my constituents have a real interest in seeing the electrification to Bristol completed and journey times improved, as well as commuter capacity.
In the brief time I have today, I have a couple of asks. First, bimodal trains are hugely impressive in the technology that they employ, but there is a sense that they have one foot in the past with diesel and one foot in the present with electrification. Given that so many of the bimodal trains operating out of Paddington towards Bristol Temple Meads will continue their journey on from Temple Meads to Weston, Taunton or Exeter, is there not a case for unmuzzling those trains—as the trains that operate on the Reading/Castle Cary/Taunton line have been unmuzzled—so that they have a bit of extra oomph to accelerate while under diesel power?
Secondly, my hon. Friend the Member for Bristol North West raised the arrival of the additional rolling stock from the Thames valley, given the deferral of the electrification there. That is a real issue. I know from conversations earlier today with the Minister that it might be that the arrival of that rolling stock is not to do with the deferral but with delays elsewhere. Either way, that rolling stock is absolutely key. The commuter belt around Bristol—I know the part to the south particularly well, but I am sure it is the same for parts to the north and east as well—is increasingly congested. Two or three-carriage trains trying to serve those routes are simply not enough. We urgently need that rolling stock to come down from the Thames valley to serve the growing rail demand in the west country.
The Minister kindly came to the launch of the Peninsula Rail Task Force report. I ask him to ensure that all the things in that report about resilience in the far south-west do not find themselves competing with the very urgent things that need to be done to improve connectivity to Bristol.
Thangam Debbonaire (Bristol West) (Lab)
I thank the hon. Member for Bristol North West (Charlotte Leslie) for securing this debate. My constituents in Bristol West are as perplexed and as outraged as I am to learn that the much-needed and long-awaited electrification of the Great Western Railway is being postponed. The works were initiated by the last Labour Government, who rightly recognised that investing in infrastructure to support economic growth is a vital duty of government and that electrification helps to decrease air pollution, of which diesel engines are such a great cause.
Since then, the coalition and subsequent Tory Governments have paused, unpaused, and now paused the works again. As recently as June 2015, the then Secretary of State told the House:
“Electrification of the Great Western line is a top priority and I want Network Rail to concentrate its efforts on getting that right.”—[Official Report, 25 June 2015; Vol. 597, c. 1068.]
Karin Smyth
Would my hon. Friend also agree that there is deep concern in Bristol that money has been diverted from the west country to fund the so-called northern powerhouse—from the great western line to perhaps HS2 or other projects?
Thangam Debbonaire
My hon. Friend makes an excellent point. The HS2 project is of course hugely, vastly more expensive than this project. It is extraordinary that the electrification is being sacrificed for other projects.
Similar uncertainty has been meted out to other regions, such as the electric spine and midland main line. In fact, in June, when the Secretary of State was confirming his support for the great western line electrification, he was at the same time pausing midland electrification and that on the trans-Pennine route. That does not appear to me to signify a coherent, thought-through plan to invest in infrastructure.
I would like the Minister to respond to the following questions. Where is the Government’s commitment to a western powerhouse? Will the west of England devolution deal end up having to cover the cost of the electrification project? What answers do the Government have for passengers who are currently stuck with journey times that feel to them routinely longer than those in the 1970s, when it was apparently possible to travel from Bristol Temple Meads to London in 90 minutes without stopping? Where is the sense in suspending the work when so much of it has already taken place? How does the Minister answer the Bristolians who have been given the idea that we are not worth bothering about? How does the Minister square the postponement with improving air quality, something which my constituents in Bristol West so badly want to see? Finally, when will the Government sort out a coherent, reliable plan for investment in infrastructure, and will that plan include proper levels of investment in local train services inside Bristol as well as to Bristol?
Justin Tomlinson (North Swindon) (Con)
It is always a pleasure to serve under your chairmanship, Mr Hollobone. My contribution will be brief. First, I pay tribute to my hon. Friend the Member for Bristol North West (Charlotte Leslie). It is right that we collectively challenge and scrutinise the work of Network Rail. This project comes on the back of record investment not seen since Victorian times, and it is in stark contrast to the just six miles of electrification that was delivered under the previous Labour Government. I say that not to make a political point, but to highlight what a large engineering challenge this is. I know that first-hand, because I had the pleasure of visiting the electrification training centre—a £10 million facility based in Swindon—where all the apprentices and staff working on the project will go to do their training.
It is frustrating, and we would all love to see this happen tomorrow, but there have been some successes already. The test track finished on time on 30 September, the Severn tunnel finished on time on 22 October, and all of last year’s Christmas and Easter work was finished on time. The budget for the Christmas work is increasing from £60 million last year to £84 million.
I have some asks for the Minister, building on the positive news about the Hitachi trains, which will see a 40% increase in capacity. The Network Rail teams must engage with MPs and physically show us the engineering works, the challenges and the opportunities for the future. I know the Minister is held in very high regard, but I echo the plea for more south-west MPs to be on the Front Bench. I think we are all currently auditioning for that—we would all vote for ourselves if Front Benchers were democratically chosen. I hope the Minister will join me in lobbying the Government for the much-needed £5.5 million redevelopment of Swindon station, which is vital because there has been a 50% increase in train usage in the past decade, and it is anticipated that the extra capacity that the electrification work will create will make Swindon an even more popular destination—hard to believe, given that it already is the centre of all great things. Disability access must be a given for all future works at stations—I know the Minister will do that. Finally, as we look at the long-term arrangements for the operator of these lines, a long-term franchise must be put in place so investment in the day-to-day services matches the Government’s commitment to improve our rail infrastructure.
Kerry McCarthy (Bristol East) (Lab)
It is a pleasure, as ever, to see you in the Chair, Mr Hollobone. I congratulate the hon. Member for Bristol North West (Charlotte Leslie) on securing this debate.
Last week, the National Audit Office issued a damning verdict on the way that this project has been handled to date. It described the project as
“a case study in how not to manage a major programme.”
The Secretary of State agreed when I put that to him at Transport questions. He said:
“I am not happy about the way in which the…programme has been managed”
and that he is
“still not satisfied with the progress that is being made.”—[Official Report, 17 November 2016; Vol. 617, c. 368.]
We need to look at what this tells us about how we handle major infrastructure projects—particularly transport infrastructure projects—in this country. They always seem to go over time and over budget, and they never seem to reach completion in the way that was originally intended. The epic mismanagement of this programme will cost the taxpayer £330 million, which is more than Bristol City Council’s annual day-to-day budget.
Bristol Parkway now has to wait 18 months longer than planned for electrification—until the end of 2018—and Bristol Temple Meads, the station that most of my constituents use, now has to wait until at least 2024 for an electrified connection to the Great Western Railway. There is no certainty it will happen, and many of my constituents have said that they have had to endure traffic jams caused by road closures for the essential work being carried out on bridges to prepare for electrification. Other roadworks are being carried out in Bristol, such as the MetroBus construction. It is already the most congested city in the country. My constituents have to endure more and they now feel it has been for nothing.
The Great Western Railway is already one of the most overcrowded routes in the country, and almost 8 million extra passengers a year are expected by 2018-19. Most of us who have travelled on that line will think, “Where on earth are you going to put them?” because it is already difficult to get a seat—certainly at peak times. The Secretary of State assured me that new stock will be rolled out sooner rather than later, but we are waiting for that promise to be fulfilled.
As well as calling on the Government to do what they can to speed up electrification, I want to flag up next year’s feasibility study of suburban rail in the west. Local rail is an important part of what needs to be an increasingly integrated transport network. The hon. Member for Bristol North West talked about Bristol East junction. It used to be in my constituency, but I was cruelly deprived of it by the 2010 boundary changes, along with Temple Meads station, Lawrence Hill station and Stapleton Road station. I now have no stations. We are, however, campaigning for the re-opening of St Anne’s Park station, which was closed in 1970. That would massively improve connections to jobs, services and culture for my constituents living in the more peripheral parts of east Bristol. I hope the Minister takes that on board, too.
Kevin Foster (Torbay) (Con)
It is a pleasure to serve under your chairmanship, Mr Hollobone, and to be back in this Chamber for the second time today talking about the desperately vital need for infrastructure investment in the south-west. I congratulate my hon. Friend the Member for Bristol North West (Charlotte Leslie) on securing this debate.
It is not all bad news coming down the track for Great Western. We will soon have the first new set of Intercity Express trains ordered in my lifetime. I think the last set was ordered back in 1976. I suspect it is tempting for the Minister and the Department for Transport, given all the issues they have had with this renewal, not to order the next set until 2056, but hopefully they will soon be on the line.
It is right that this debate has focused on the electrification programme. I represent a constituency in the far south-west that was not initially part of the electrification process, and the coastal track at Dawlish is very unlikely to be part of it in the near future, given the obvious issues of mixing high levels of voltage and sea water. My concern is about the impact of the project and, in particular, how its cost has risen dramatically.
As the Minister knows, we talked earlier about the Peninsula Rail Task Force and a £280 million project to secure the Dawlish line. That is about 10% of the cost of the electrification project, and only a fraction of the increase in cost in the past couple of years. My concern is about the choices that the Government have when they make initial decisions and about the solidity of the information. As the hon. Member for Bristol South (Karin Smyth) said, we will certainly explore that at the Public Accounts Committee. My fear is always that projects look very attractive, and the price can look just about affordable, but they can require a much larger commitment that has not been predicted. In this case, we quickly found that the engineering required to put the masts in made it almost inevitable that the costs would rise significantly.
Given what the NAO report said, it is clear that in the future we need to plan how we deliver a whole railway, not just individual aspects. Passengers do not get on a train that has been heavily delayed due to flooding and say, “Great, I’ve got better wi-fi”; they look at their whole experience on the journey. That is why it is right that we ensure our investment projects are better managed. We must deliver projects without such issues and we must make our railway more resilient. As I said in an intervention, there is no train service between parts of Devon and Cornwall and Bristol, and there is a limited service between Devon and Cornwall and London. The well-known issues with the network are screaming out for investment.
Ben Howlett (Bath) (Con)
It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate my hon. Friend the Member for Bristol North West (Charlotte Leslie) on securing this debate on a subject about which many of us have spoken together over the past few years.
The electrification of the main line is still projected to cut the journey time between my constituency and London, but, given the pinch point at Bristol East, there is a question about whether it will actually speed up the journey time between Bath and Bristol. That has obviously caused concern among my constituents and, I think, pretty much all of our constituents across the whole of the west of England.
I was very disappointed by the Minister’s announcement that the electrification of the line is going to be put on hold until control period 6—2019 to 2024. Following Network Rail’s frustrating report, I welcome the fact that the journey will still be introduced, and that the new Hitachi Intercity trains and the new commuter trains will be on the line by 2018. However, our constituents are justifiably concerned, given that they have to sit on the floor and the trains break down regularly between Bath and Bristol Temple Meads and onwards to other parts of the suburban rail network.
The electrification of the great western main line will now stop at Thingley Junction, which, contrary to rumour, is just before Bath Spa. We have had to endure a long period with the Box Tunnel being reduced in height, and we would like to have confirmed that the reduction in height will still enable the new trains to get through to Bath, Bristol and beyond.
The increase in capacity will clearly make a big difference and contribute a large economic benefit to our communities. However, there is genuine concern that how much the economy of the west of England contributes to the national economy is often underestimated: we have the second largest number of tech and creative companies anywhere outside Hoxton in London; we have one of the fastest growing economies anywhere in the country; and yet, off the top of my head, we receive the second lowest amount per capita of transport infrastructure spend in the country. That desperately needs to be re-evaluated.
Electrification would have a positive impact on the tourist economy, which is hugely important to my world heritage site city. Bath is a beautiful city and I want to see more tourists come to it, which would have a big knock-on effect for Somerset and Bristol, and that is another huge draw. With those trains, more people will have the confidence that they will arrive in Bath and the west of England on time.
Lastly, I want to echo some of the comments made about Network Rail. For time immemorial, we MPs have had our concerns about Network Rail being able to deliver the infrastructure projects that we require of it. I do not think that anything should be off the table, in particular given the contents of the NAO report.
Luke Hall (Thornbury and Yate) (Con)
It is a pleasure to serve under your chairmanship, Mr Hollobone.
I congratulate my hon. Friend the Member for Bristol North West (Charlotte Leslie) on securing the debate. She made many of the points that I wished to make, but much more eloquently than I might ever have done. I join her in expressing disappointment at the decision to defer the four electrification projects along the great western route.
I will reiterate a couple of the points made by my hon. Friend, because that decision will have a direct impact on a number of my constituents in south Gloucestershire who travel from Yate, specifically, to Bristol Parkway and on to London. More passengers will continue to use the Bristol Parkway service as a result of the worsening congestion for many residents of south Gloucestershire.
I will also express some concerns about the knock-on effects of the plans to delay investment. I first seek reassurances from the Minister, as others have done, that the deferral of electrification of the Thames valley lines will not affect the cascading out of the Thames Turbo trains, the 165 and 166, to the west of England. They are essential to replace the trains that Great Western Railway has to return at the end of their leases. Failure to do so will result in a reduction of services and an increase in passenger overcrowding.
The chairman of our local West of England LEP called those trains
“essential to deliver the £100m MetroWest Phase 1 and 2 rail schemes”.
Phase 2 of the MetroWest scheme includes the plan to increase the frequency of services between Bristol and Yate from hourly to half-hourly, which will be hugely important to people in Yate, Coalpit Heath and surrounding areas. It has overwhelming support from people who want to see a reduction in overcrowding on the service, and would without doubt take more cars off already congested roads around Yate and Coalpit Heath. I will be grateful if the Minister clarifies that in his closing remarks.
I will also be grateful if the Minister clarifies the impact of the decision to delay on the local four-tracking project at Filton, which, too, is essential to deliver MetroWest phase 2. South Gloucestershire Council has already started some of the clearing work, so an early indication of any effect from the Minister will be extremely welcome.
Lastly, I call for reassurance that there are no plans to change the proposed four inter-city express services an hour between Bristol Temple Meads and London, two of which will pass through Bristol Parkway and connect directly with Yate services.
I thank my hon. Friend the Member for Bristol North West for securing the debate, and I will welcome the Minister’s reassurances.
Mr Philip Hollobone (in the Chair)
We now come to the Front Benchers’ speeches. I want to call Charlotte Leslie again to sum up the debate no later than 5.43 pm, which means that the Front-Bench speakers have nine minutes each. Were the Opposition spokesman to take less than nine minutes, there will be more time for the Minister to speak and, potentially, for interventions, but we are in her hands. I call Pat Glass.
Pat Glass (North West Durham) (Lab)
Thank you, Mr Hollobone. I will endeavour to be as quick as I can.
The recent decision by the Department for Transport to delay the electrification of the great western route is just the latest in a series of announcements of delays and pauses made by the Government on electrification of our railways. We have had one announcement after another by the Government, who still state that they are planning electrification, but while the Government have promised much, they have delivered little.
I sympathise with the Minister. Like me, he is new to the role and just happens to be holding the parcel when the music stops. However, I have a criticism about his recent announcement, because he appeared to sneak it out just hours before the November recess and on the day of the American election when, presumably, he was hoping we would all be looking the other way.
I therefore congratulate the hon. Member for Bristol North West (Charlotte Leslie) on securing this important debate. She and I served together on the Select Committee on Education when we were new Members in this House, and I understand her dedication to the city of Bristol. I also want to acknowledge all the MPs from Bristol: they are four strong women, who are here together fighting for a better future for rail in their city.
The case for the electrification of the route was set out in October 2009. The Department for Transport projected then that it would take eight years to complete and cost up to £1 billion. According to the original timetable, we should have been looking at a fully electrified line from London to Swansea by the end of next year. Since then, however, the project has had a very unhappy journey.
Two weeks ago today, we were told by the Rail Minister that the project will be paused, with no detail of when it might be unpaused or restarted, or, indeed, if it will ever be completed at all. Over the past six and a half years we have had delay after delay to the original timetable, and the cost to the taxpayer has skyrocketed as a result. As the Minister knows, the National Audit Office, in its recently published report, laid the blame squarely on the Department for Transport, stating that it did not
“plan and manage all projects…in a sufficiently joined up way.”
I have worked in government at local and national levels. At the national level, I found that the lack of planning and joined-upness makes local government look like a smoothly operating machine, and that is saying something. Even within that, the Department for Transport has its very own place.
The cost of the project was reassessed in September 2014, when the Department estimated it at £1.5 billion, up 50% on the original costings. Although the cost-benefit ratio expected by the Department for Transport in March 2015 was within the Department’s high value-for-money range, at 2.4:1, by the end of last year that had dropped to 1.6:1, which meant that it had fallen to within the medium value-for-money range. That is because the Department was forced to announce that the cost of the project had been revised yet again and was now estimated to be more than twice the original projection, at £2.1 billion. The latest announcement is in another league altogether, however, with the estimated costs to the taxpayer reaching £5.58 billion. The Government have managed this infrastructure project so badly that the cost-benefit ratio has now fallen through the floor.
The issue is not isolated to the great western route alone. Rather, the Government’s handling of the electrification of UK railways is being felt right across the country. First, we had the delays to the electrification of the trans-Pennine railway. Originally planned to be completed by the end of 2018, that is now looking distinctly unlikely—to put it politely. The electrification of the midland main line was paused in June last year. The wires will now not reach Kettering and Corby until 2019—that is today’s estimate—whereas the original plan had been for electrification to stretch far beyond Corby to Derby, Leicester and Nottingham by 2018. When the Government finally announced that both plans had been revived, it was only to say they would be four years behind schedule.
In 2013, 30% of the most crowded train services in England and Wales were Great Western services into Paddington, and the Department for Transport forecast tells us that passenger demand on that route is to grow by 81% between 2013 and 2019. Electrification is therefore essential if we are to see any improvement for passengers. It will lead to further economic benefits, in particular driven by freight trains running on electrified lines, and it is vital if we are to reduce our carbon footprint and will help to build a greener transport network, with the increase of freight on rail being central to that aim. It is therefore really disappointing to see that a significant part of the estimated £330 million that will be added to the bill for the electrification of the great western route will come about because of the revisions that are needed to the new all-electric trains that the Government ordered.
Thanks to the delays, those trains, which were set to cost the taxpayer £4.1 billion, will now need to be fitted with diesel engines so they can run on sections of the great western route that the Government have now decided will not be electrified. Adding those diesel engines will make the trains heavier, less energy efficient, more polluting and more damaging to the track. So this Government will spend £5.58 billion on upgrades to the great western route that will in fact cause a reduction in capacity, a slower service and an increase in carbon emissions and mean that rail lines will require even more regular maintenance work. That is quite an achievement.
My right hon. Friend the Member for Slough (Fiona Mactaggart) said that this issue impacts on the earlier debate about pollution in the Thames valley and the decision about a third Heathrow runway. Further, passengers in the north of England and Scotland will have to wait up to two years longer for improvements to their services, because the revised plans and delays to infrastructure works mean that old Great Western Railway stock will not be passed on to other areas that were depending upon getting that old stock to make such improvements.
The budgeting for this project has been shambolic, and clearly no one can confidently rely on any figures produced by the Department for Transport. The Government cannot be allowed to get away with continually claiming to be investing in infrastructure when we see Ministers once again with their tails between their legs trying to sneak out announcements about further delays to their plans.
Will the Minister tell us exactly when the Government intend to follow through on the great western line? When can we expect the pause to cease and the project to restart, if it restarts? In what shape will it be if it ever restarts? At the beginning of the debate, the hon. Member for Bristol North West talked about passengers. She is absolutely right: neither passengers nor taxpayers are getting a good deal, and quite frankly, they deserve better.
Mr Philip Hollobone (in the Chair)
Order. Will the Minister bring his remarks to a conclusion no later than 5.43 pm to allow the mover of the motion to sum up the debate?
The Parliamentary Under-Secretary of State for Transport (Paul Maynard)
It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate my hon. Friend the Member for Bristol North West (Charlotte Leslie) on securing this debate. Contrary to what we have just heard, I actually welcome the debate and the opportunity to discuss a complex project. Whether I can do it justice in nine minutes is another matter, but I will do my best. If I fail to address anyone’s points, I shall be more than happy to write to colleagues, and I thank all those who have participated in the debate.
My hon. Friend started by suggesting that the south-west was perhaps not first in the queue. My diary shows that I started today at the publication of the report of the all-party Peninsula Rail Task Force. Immediately afterwards, I had a meeting about the Exeter to Barnstaple railway line, and I have spent the rest of the day addressing this issue, which is a priority for the Government—and not just today. This is the first major rail electrification project for many, many years, and there has been an awful lot to learn. I am not someone who tries to go for cheap partisan points, but there is one that cannot be avoided in this discussion: the Labour party electrified fewer than 20 miles of track in its 13 years in office. We are having to overcome a backlog of delayed investment.
Nick Smith (Blaenau Gwent) (Lab)
As we have heard, the NAO report on the electrification of the Great Western Railway states that £330 million has been wasted so far. Does the Minister believe that that huge waste of money endangers the final delivery of the Cardiff to Swansea section of the project?
Paul Maynard
We certainly recognise a lot of what the National Audit Office report says, and I will set out what the Department is doing in response to that. As the hon. Member for Bristol East (Kerry McCarthy) pointed out, the Secretary of State was critical of progress on the project so far at Transport questions last week. I share those concerns; the project clearly has not gone well.
However, it is worth stressing that we are having to defer four elements. I have heard many words pass around the Chamber—“cancellation”, “pause” and all sorts of others—but “deferral” is quite a precise term. No work is being paused; if one considers the various elements that make up the scheme around Bristol, work is continually ongoing. We are raising bridges, improving line speeds and resignalling. That is all preparatory work before decisions can be taken on proceeding with further electrification. The only work that has been suspended in the greater Bristol area is the erection of the overhead line equipment. That is what has been deferred until a future control period. I cannot make precise statements about what control period 6 will contain, because that has to be part of a wider national package, but I want to make it clear that we are not stopping work on the electrification programme in the Bristol area. That work continues.
Karin Smyth
If that is the case, why do the Government continue to spend money doing something that they cannot at any point say when we will need? Is that not potentially wasting more taxpayers’ money? What is the purpose of electrification if it does not deliver benefits and we are going to spend more money at some unknown time in the future?
Paul Maynard
I have just said that we will be making announcements about what—[Interruption.] Is the hon. Lady going to listen to my reply or just mutter at me? I am happy to respond to her point if she wants to listen. We will take decisions about what control period 6 comprises and announce the whole of that control period at the appropriate time. As a member of the Public Accounts Committee, she will be more than aware that Sir Peter Hendy has already reprogrammed other projects across the country. As Rail Minister, I am not prepared to part-announce elements of control period 6 depending on what debate I happen to be in at any moment in time. That would not be a prudent way to go forward—nor, were I in her position on that Committee, would I think it a particularly prudent position for any Minister facing her queries to take.
Paul Maynard
I will happily give way, and then I will need to make a little progress.
John Penrose
Can the Minister reassure us that as a result of the deferral that he has just described, the cost-benefit ratio of the elements of the programme that have been paused will not be substantially changed? Can he also provide us with information about how those cost-benefit ratios compare with both the decision not to go ahead at all with the electrification of the suburban Bristol railway lines and things that are going ahead, such as High Speed 2?
Paul Maynard
There will always be ongoing recalculations of the cost-benefit ratios of any wider projects, as well as the elements within them. I do not see this as a matter of HS2 or the great western main line. There are investment backlogs that we have to catch up on in all parts of the country, and each investment has to respond to a specific rail need in that region. Here, we are trying to respond to a specific rail need by ensuring that all the passenger benefits that can be accrued by electrification can be delivered as soon as possible for the use of the new bi-mode intercity express programme trains.
Paul Maynard
If the hon. Gentleman wants to intervene, it will have to be the final occasion.
John Penrose
That is very reassuring. I would be very happy if the Minister would provide the specific numbers that I asked for, perhaps in a letter.
Paul Maynard
I will happily write to the hon. Gentleman with that information at a later point. That is more than fine.
Hon. Members have noted the extra seats and the 15-minute journey time saving from London Paddington to Bristol Temple Meads via Bristol Parkway that the new trains will provide, and I hope that they will also note that those trains should stimulate economic growth across the region as a whole. Bristol is one of the few cities that is a net contributor to the UK Treasury, and that has to be recognised. We need to do more to work with Bristol to ensure that all those in the commuter belt around Bristol are properly able to access the city. That entirely makes sense. But we need to go back to the fundamental point that modernising this line has been an ambitious and challenging undertaking, and it has not been straightforward. Even closing the Severn tunnel for six weeks this autumn has caused immense disruption to journeys and people’s lives, but it has been worth while, because had we not closed it for those six weeks, there would have been five years of weekend work and disruption.
As a result of that challenge and the complexity of the work, with ageing assets, heritage sites and a very busy line that Network Rail has to work around, difficulties have occurred. As was mentioned, the National Audit Office report was highly critical of what had occurred. However, what is often not pointed out in these debates is the recognition the NAO has given to the changes that the Department has made since 2015. In particular, we now have a programme board for each route upgrade across the country, chaired by a senior responsible owner from the DFT, to provide effective oversight of delivery.
We are working closely with Network Rail, train operators and other partners to ensure that major construction works and the introduction of new train services occur in a pragmatic, sequenced and timely manner and that all elements of those complex processes interact sensibly with each other. There is no point in delivering a piece of rolling stock that cannot operate on a particular track because the infrastructure work has not been done. That requires work to be sequenced. Much of the criticism in the NAO’s report was of the failure to sequence early on in the process and understand the true scope of the project.
My hon. Friend the Member for Bristol North West was concerned that the decision represents a waste of money. I would say that it does not at all. The preparatory work will enable future decisions to be taken, which is also a point that she made. If one takes some of the work around Bristol East junction, for example, the savings made through the deferrals are specifically targeted at bringing forward the work to enable the capacity improvements that will allow full advantage to be taken of the new bi-modes. If that did not occur, there would be less benefit from having the bi-modes because there would not be the capacity at Bristol East junction. That underlines the point about sequencing work and, in a project of this complexity, the overall need to have a degree of flexibility in the system so that, as technology moves on, options change and new pieces of locomotive and rolling stock come on stream, we have the capacity in our projects to make those pragmatic decisions and seek to deliver the benefits to passengers as soon as is possible.
As I mentioned earlier, this decision underscores a wider approach to rail investment across the country as a whole. Passenger outcomes must be delivered while achieving the best value for every pound spent. On that point, the Government have been clear about the rationale for electrification. We are not against using electrification as part of a wider strategy for delivering improved services. Electrification does bring benefits. It enables, for instance, the use of electric trains, which over time reduce the cost of running the railway as well as bringing environmental benefits—but we have to make improvements in the way that makes most sense and gives most value to the taxpayer. Therefore, in some cases, where a train can run on both electric and diesel power, it is right to look at how that can be factored into any decision about how we sequence the different elements of any electrification process.
In the end, electrification is not an objective. It is a means to an end. It is an input. It is about putting wires up. It is about traction and power. It is an engineering solution to a defined problem. Yes, it is an enabler of new trains, but that new capacity is needed by passengers as soon as possible. Therefore, if we have access to these new trains, I think it right that we go down that path.
Nick Smith
May I press the Minister on when he thinks the Cardiff-to-Swansea section of the project will be completed? What is his latest estimate?
Mr Philip Hollobone (in the Chair)
Order. Before the Minister replies, may I say that he must allow time for Charlotte Leslie to sum up?
Paul Maynard
I do beg your pardon, Mr Hollobone. I was looking at the clock showing the time left for my speech. If I may, to save time, I will write to the hon. Gentleman. I will end it there and write to any further Members who asked questions to leave time for my hon. Friend the Member for Bristol North West to finish the debate. I thank hon. Members for listening.
Charlotte Leslie
Before I pay tribute to the Minister for answering and to Members who have come here, it is appropriate to pay tribute to Network Rail workers. While Network Rail has taken a bit of a battering for its organisational abilities at the top level, we should pay tribute to those who over the past couple of days have been working so hard to keep our railways running, as well as those at Great Western Railway on the ground who are making passengers’ lives bearable on a day-to-day basis.
We have had a wide-ranging debate. I am proud to be part of a group of powerful women speaking for Bristol, who have dominated the debate in many ways with Bristol’s interests and articulated powerfully Bristol residents’ concerns about the announcement. The case has been made that the whole region is affected by Members from as far afield as Torbay, and my hon. Friend the Member for Bath (Ben Howlett) made the case about his city well.
There is anger generally that Network Rail does not seem to be able to deliver the projects that any Government—whether Labour or Conservative—want it to deliver. I take the Minister’s point that not an awful lot of rail was electrified under the previous Labour Government. Perhaps they were wise in leaving it as a promise for the next Government because they realised how difficult that might be to do with the mechanisms they had at their disposal. I pay tribute to our Government for even trying.
I take the point that the project is complex. However, if we are to be a global competitor, we need to sort it out. We can sit and talk about the reasons, the complexities and the sequencing, but other nations in Europe manage to get it done. If we are to compete properly, we need to up our game dramatically.
Written Statements
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Improving Planning Performance
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The Minister for Housing and Planning (Gavin Barwell)
An effective and strongly performing planning system is a crucial part of delivering on our commitment to increase housing supply. We are very clear that planning delays are bad for both applicants and local residents. They can slow down the building of new homes and also create uncertainty about the future shape of the community. Planning is a control on people making use of their land and is a quasi-judicial process, so any delay is denying them their legal rights.
We have a locally led planning system, which sets a clear statutory framework in which a local planning authority should make decisions. The existing designation regime had great success in delivering improved performance in local planning authorities. In the most recent quarter, 83% of applications for major development were decided on time, the highest figure on record. This is up from 57% in July to September 2012, when the designation regime was first announced. We are committed to ensuring this is reflected more widely across the planning decisions authorities make. Therefore we are extending the regime to further drive delivery against statutory requirements by including an authority’s performance in determining applications for non-major development. This was set out in recently laid regulations1, which came into force on 21 October 2016.
Today we have laid before Parliament “Improving Planning Performance: Criteria for Designation (Revised 2016)”, which sets out revised criteria that the Secretary of State intends to use for designating a local planning authority as underperforming and the thresholds that authorities will be assessed against in the next designation round in the first quarter of 2017.
Speed of decision making for the purposes of the non-statutory identification scheme for on-shore oil and gas applications, as set out in the written ministerial statement of 16 September 2015, HCWS201, will be assessed by reference to the revised criteria, including the revised threshold for major development. The revised criteria will not apply to the final quarter of 2016 identification round: we will assess authorities on this basis from the first quarter of 2018 and annually thereafter.
Copies of “Improving Planning Performance: Criteria for Designation (Revised 2016)” have been placed in the Library of the House.
1The Town and Country Planning (Section 62A Applications) (Amendment) Regulations 2016 No. 944 and The Town and Country Planning (Section 62A Applications) (Hearings) (Amendment) Rules 2016 No. 955.
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Trade Foreign Affairs Council and Notification of UK Opt-in
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The Secretary of State for International Trade and President of the Board of Trade (Dr Liam Fox)
My noble Friend the Minister of State, Lord Price has today made the following statement:
The EU Foreign Affairs Council (Trade) took place in Brussels on 11 November 2016. I represented the UK at the meeting. A summary of the discussions follows.
Modernisation of Trade Defence Instruments (MTDI)
Over breakfast, the presidency’s latest compromise proposal was discussed, which included suggestions for how to limit use of the Lesser Duty Rule (LDR) in particular circumstances. Commissioner Malmström underlined that limitations to the LDR would be the exception and not the rule and committed to provide further evidence in support of the proposal.
Given that there were still outstanding issues to resolve, no vote took place at trade FAC. However, given the support from a significant number of member states, work will continue at working level and Coreper, where the presidency will aim to finalise a comprehensive mandate for trilogues before the December European Council.
WTO, Trade in Services Agreement (TiSA), Environmental Goods Agreement (EGA).
Malmström said the EU needed to work with others to shape the possible outcomes for the 11th WTO ministerial conference in Buenos Aires in December 2017.
Malmström reiterated that concluding TiSA was firmly in the EU’s interests. On the EGA, she said that conclusion at the 3-4 December ministerial was a real possibility. The outstanding EGA issue of bicycles was again discussed.
EU-US (TTIP)
Commissioner Malmström recapped on recent progress on TTIP. Discussions supported the need for a realistic approach and I underlined our continued support and suggested that we wait to see how the political context evolved.
EU-Japan
Recent negotiations had gone well, but further progress was needed on non-tariff measures, services and procurement.
It is difficult to know how the stalling of TPP might affect EU-Japan.
EU-Mercosur
The October round with Mercosur, the first for four years, had gone well, with Mercosur showing more flexibility on goods and engaging on a wider range of issues.
Ukraine Autonomous Trade Measures (ATMs)
Commissioner Malmström sought to reassure member states that safeguards would limit any negative impact on the EU of the proposed further ATMs, which go beyond the provisions of the EU-Ukraine free trade agreement. It was important to bear in mind the broader political context for the proposal.
Ecuador accession to the EU-Andean FTA
At the signing ceremony of the protocol for Ecuador’s accession to the Andean FTA, I signed on behalf of the UK.
The UK also opted in to the Council decisions on signing, provisional application and conclusion of the protocol of accession of Ecuador to the Andean FTA, insofar as they relate to the temporary presence of natural persons for business, otherwise known as Mode IV. The Government are committed to taking all opt-in decisions on a case-by-case basis, putting the national interest at the heart of the decision-making process.
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Grand Committee
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National Citizen Service Bill [HL]
Tuesday 22nd November 2016
(8 years, 1 month ago)
Grand CommitteeRead Full debate National Citizen Service Act 2017 View all National Citizen Service Act 2017 Debates Read Hansard Text Amendment Paper: HL Bill 64-II Second marshalled list for Grand Committee (PDF, 87KB) - (18 Nov 2016)
Baroness Finn
Baroness Finn (Con)
My Lords, Amendments 19 and 23 are in my name and those of my noble friends Lord Maude of Horsham and Lord O’Shaughnessy. Their purpose is to insert the word “primary” before the reporting requirements on the exercise of functions for both the business plan and the annual report. While I appreciate that this is a small word change, we argue that its insertion is critical for two reasons. First, it would prevent the new organisation drowning in excessive bureaucracy; secondly, it is consistent with the draft royal charter which refers in Article 3 to the primary functions of the NCS Trust.
One of the main reasons for the success of the NCS thus far has been its flexibility to respond rapidly and positively to feedback on the programme and to adapt quickly to change. This flexibility is essential when engaging with teenagers. To mire the trust in excessive bureaucracy will hinder, and potentially kill, its ability to adapt quickly and innovatively to new challenges. If the trust is expected to produce a business plan every year about every one of its activities, that would have the regrettable effect of stymieing the NCS’s ability to innovate and to engage with emergent trends, platforms or partnerships.
The new body should of course publish a business plan that lays out the primary functions of delivering the National Citizen Service. This will allow transparent scrutiny of the unit cost of delivery as well as its broader stakeholder engagement. Such scrutiny, which will permit proper accountability, is completely appropriate. However, to insist on more onerous reporting requirements, which would be inconsistent not only with the draft royal charter but with other public bodies, including other royal charters, would detract from the NCS’s ability to deliver a quality and engaging programme.
If the NCS is to achieve its hugely ambitious programme to grow threefold in the next three years, it is vital that it sticks to its core vision while retaining the ability to be nimble. To allow this, the reporting requirements should be kept as straightforward as possible, not weighed down by ever more onerous obligations. I beg to move.
Baroness Barker (LD)
My Lords, I have a number of amendments in this group, whose purport is somewhat different from that set out by the noble Baroness, Lady Finn.
When this legislation is passed, the National Citizen Service will no longer be a start-up; it will be a sizeable body with a very sizeable budget. Therefore, it is not unreasonable to expect that its reporting requirements will be different from those which it currently has as a very small community interest company. As such, and not a charity, the NCS has a lower level of financial reporting requirement than many of the organisations with which it has to do business and from which it has to commission its services.
I make no apology for the number of the amendments in this group which deal with accountability. I appreciate that we are talking about a royal charter body but the voluntary sector has had one of the worst years on record and has suffered a great deal in terms of its reputation and public support, precisely because it has not been living up to the higher standards of reporting which it should demonstrate—way above the public sector.
These amendments stem, to a large extent, from the acknowledgment of the noble Lord, Lord Maude, on Second Reading, that the NCS was deliberately set up to sit apart from the rest of the voluntary sector while being almost entirely dependent on it for the delivery of its outcomes. The NCS is, and will be in the future, a central commissioner of services from the voluntary sector, and as other resources diminish that will become increasingly important as a larger percentage of the money available for volunteering will be tied to this scheme. The greater freedom of action a body has, the higher standard of accountability it should aspire to. That is why the level of detail we require about any charity’s accounts is much higher than for anywhere in the private sector. The lack of competition to the NCS makes it wise to require a greater degree of transparency and detail in its reporting than we might have otherwise. Recent examples like Kids Company and Work Programme show that the lack of a requirement for proper accountability can be extremely damaging. It is with that in mind that we have proposed a number of amendments.
Given its purpose and set apart though it is, this organisation cannot deliver co-ordination with other voluntary organisations unless it has good relationships with them. It therefore does not seem unreasonable to ask it to set out how it will establish those, and, after a financial year, to report back. It is claimed that this organisation has an important, and, in the view of some noble Lords, unique contribution to make to the lives of young people. It is therefore important to require it to show that it sits alongside the main trends within the voluntary sector. For example, many people working in community organisations serving the Muslim community are saying to the Government— consistently and in many different ways—that the Prevent agenda is not working. It would therefore be remiss of us not to require the NCS—if it does have the role being described by its advocates—to actively work with those charities to ensure that community cohesion and diversion from extremism are part of its achievements.
Amendment 31, which requires that the NCS’s annual report includes its efficiency and effectiveness, is justifiable given that it is not up against competitive challenge. It is also not unreasonable to require diversity among its trustees. But of all these amendments, the two that matter the most are Amendments 28 and 29. It is right that Parliament should know the extent to which the trust has collaborated with and resourced the rest of the voluntary sector given that it will be one of the few sources of money for volunteering. It is also right that its report should include comparisons with alternative provisions. I have not yet been able to find a report giving the unit cost of the NCS including its overheads. Will the Minister give us that figure in his response? There is a suggestion from a number of other voluntary organisations that it is a very costly programme in comparison to them. I would very much welcome a response on that because before we commit this large resource to a body which is going to be set down in stone we should have some answers about the level of accountability that we can expect.
Baroness Scott of Needham Market (LD)
My Lords, I shall speak to Amendment 27 in this group. At the risk of incurring the wrath of the noble Baroness, Lady Finn, it adds to the reporting requirements of the NCS. In my experience, having to provide a detailed business plan and reporting back mechanisms does not have to stifle innovation. Most of the most innovative organisations and businesses around the world have detailed business plans and they report to shareholders, so I find the argument quite difficult. Indeed, I shall go further and say that business planning tools used properly can generate innovation and the reporting requirement can make an organisation focus on the things that those who are funding it believe are important. They can be a driver for innovation, not a barrier to it. The NCS, like any body in receipt of quite large sums of public money, will find that it will be overwhelmed with freedom of information requests if it does not willingly provide the information at the beginning.
In my amendment I am seeking to introduce to the business planning and reporting requirements measurement against the implementation of the Public Services (Social Value) Act 2012. When it was passed, the Act was based on two thoughts. The first was that public procurement generally tends to be at scale and cuts out SMEs and smaller organisations, and the second was that the cumulative spending power of public bodies could be much better used in the economic development of local areas than is usually the case. A review carried out last year by the noble Lord, Lord Young, suggested that the Act had those impacts. It has worked well, but it is underused. I was very pleased that the Government more or less accepted those arguments when they accepted my amendment to the Bus Services Bill and included a reference to the Act in the statutory guidance.
Evidence to the Select Committee on Charities currently sitting in your Lordships’ House has contained many references to the difficulties faced by small charities in participating in public procurement exercises, and a number of them have specifically referenced the Public Services (Social Value) Act as a useful vehicle for being able to do that, and they would like to see it more widely used.
The NCS is going to be a huge provider. On our previous day in Committee, the noble Lord, Lord Stevenson, talked about the problems of scaling up. I worry about that too. The NCS has written to me very fully and outlined the work that it has been doing with small local providers in a pathfinder scheme. It has given an undertaking that it wishes to widen and deepen its approach. I welcome that, but the recurring theme in this debate is about protecting the commitments currently made by the NCS into the future because it can commit only with its current board and current chair. Unless we have something in the Bill we cannot accept that those commitments will go on for ever.
There are a number of reasons why the Government should accept this amendment. The use of public money to support small and medium-sized charities will add to their sustainability and begin to avoid what someone has described to me as the growing Tesco-ification of the charity sector. There is also an issue about larger providers squeezing out smaller subcontractors. The NCS can use its considerable purchasing and contracting power to ensure fairer treatment. That would be the right message to send out to the sector, which is feeling a little beleaguered and unloved by government. It would help to ensure that more cash is used locally, generating local jobs. It would also help to create genuinely local solutions with providers which understand their neighbourhood. Anyone who does school visits regularly knows how very different areas can be, even those that are geographically quite close together.
Finally, there is something about risk. A larger number of smaller contracts is inherently less risky in terms of collapse or mismanagement than putting all the eggs in just a few baskets. One of the keys to innovation is size, and smaller local providers would be much more innovative and at less risk than the large ones.
Baroness Royall of Blaisdon (Lab)
My Lords, I shall speak to the amendments in my name. I understand the arguments made by the noble Baroness, Lady Finn, that the organisation wants to put all its energies into ensuring that it maximises the number of young people going through the programme—that is absolutely right and proper. But I do not regard reporting on the various measures that we wish to be reported on as onerous in any shape or form. When the report comes before Parliament every year, which is a very welcome measure, Parliament needs to be able to judge what is happening and judge the impact of this very important initiative. Unless we have a breakdown of the impact in various ways, we shall not be in a position to judge or to celebrate all the success—nor will we be in a position to say that the NCS is doing a great job but it needs to flex this and that and do things slightly differently. So I am not trying to impede the work of the NCS in any way; I am trying to build trust in the NCS and, unless we have measured impact, we are not going to build the trust that we want to build. It is important that we know the number of participants who have fully completed the programme, which is the subject of one of my amendments, and the extent to which participation targets have been met. They are just measures, and they are sensible and basic ones.
Amendment 30 says that the annual report must compare the extent to which the NCS Trust obtains value for money and talks about,
“comparison with other youth related provision”,
by organisations with similar aims. There are other organisations, such as the scouts, which provide fantastic value for money. I know that the NCS will also provide fantastic value for money, but I want to enable organisations such as the scouts to be able to deliver for the NCS. In due course, the NCS will have to flex how it works to some extent to ensure that the scouts can be a provider, as it were, for the NCS.
Amendment 37 says that the annual report must address,
“the extent to which young people have been involved in setting the strategic priorities of the NCS Trust”.
I do not know the extent to which young people are involved in setting the priorities at the moment, but yesterday I went to a terrific event organised by Step Up To Serve, because it is “I Will” week. It has so many young people on its board, which is fabulous, and they really are setting the agenda for quality volunteering for those between the ages of 10 and 20. I would like to know that young people are really going to be involved in setting the priorities for the NCS, because it is their programme and they know what is best needed for them.
My Amendment 38 says that the annual report must address,
“how many young people have gone onto participate in other social action opportunities, and … the extent to which the NCS programmes impact the wider youth … sector”.
I shall not bang on again about City Year and all those things, but it is part of the journey, so I want to ensure that the report can demonstrate each year that the NCS really is part of the social action journey for young people from 10 to 25.
I am very grateful to the Minister, who in his letter after Second Reading said that the Government agreed that a “longitudinal study” of the life outcomes of NCS graduates was an excellent suggestion and that he was looking to see how such a study could be developed within the work already done to get evidence about the NCS’s long-term performance. That is really important because in a few years’ time, we want to be able to demonstrate that the NCS is making a qualitative difference to young people’s lives.
Lord Hodgson of Astley Abbotts (Con)
My Lords, I have one amendment in the group, Amendment 47. It is the last in a group of 18. The prior 17 would impose various duties on the NCS Trust. Some of these seem to be entirely sensible. Measuring the impact of what is being achieved is good, so I very much support the thought behind Amendment 25 in the name of the noble Baroness, Lady Royall, on how many individuals complete the programme, although an annual report that did not contain that would be a sad one. I am less enthused by Amendment 39 about the open-ended requirement to consult the voluntary sector. That seems to be a recipe for a talking shop and would not necessarily achieve very much.
I do not doubt the good intentions behind the amendments in the group, but as we know, the road to hell is paved with good intentions. Amendment 47 attempts to go beyond hope, expectation or intention to the reality of what has happened. It would do so by requiring an independent review of the whole of the NCS Trust’s commissioning process. We would thus be able to examine its performance in areas a number of which are the subject of the other 17 amendments in the group.
Amendment 47 focuses widely but particularly on those issues that have been the subject of a good many discussions and comments at Second Reading: how easy is it for small providers to obtain contracts? What barriers have been identified that stop them? What additional benefits have been found for our society arising from the whole process? That last issue has been commented on in the last few minutes, so I will not repeat it, but the Committee needs to be aware of the level of risk aversion among commissioners. It is something we need to guard against for the NCS Trust.
A number of voluntary groups are invited to bid. The fact is that if you ask 12 to bid, there are 11 losers. Therefore, the amount of time wasted on that can be very great. My noble friend Lord Maude has had a valiant blast against the use of pre-qualification questionnaires, or PQQs. That is another hurdle for smaller groups to get over. His weed killer has worked pretty well in central government, but PQQs seem to be alive and well and living reasonably persistently at local government level. Perhaps we need to think about that. There are then lengthy tender documents that take a lot of compiling. Then there are the monitoring processes, which can be very lengthy and extensive, and can be changed in the middle. All those issues and features combine to deter, to put off, to disadvantage smaller voluntary groups.
The day before our meeting last Wednesday a small charity came to speak to me, because I have been involved with this process. It said that it had an example where the commissioner clearly believed it was unsuitable and that it should not be given the job. The charity was persistent, in a rather brave way. It went on to complete the process, against considerable odds and adversity. Then it was disqualified because, in the final contract, where it had to sign the document at the end, the words said, “Sign inside the box”. The signature had touched the side of the box. That was sufficient reason for the commission to say, “Sorry, you haven’t declared, you’re off”. One thinks that this is an extreme example, but these sorts of things come up again and again. We need to ensure this does not take root in the NCS commissioning process and that these non-tariff barriers, if you like to call them that, are identified and dealt with.
The purpose of the amendment is to make sure that we can find out what has actually been happening. It is supported by the NCVO. It provides this important independent overall review, with some special focuses to it. On reflection, I probably would not have chosen a review after 12 months—that is probably a bit too soon. So it might be a review after 24 months, to give more time to see how things settle down, but that is a detail. I hope my noble friend will accept that there is a principle here of something worth pursuing, which deals with some of the other concerns raised by noble Lords on both sides of the Committee, and we can explore how to build it into the Bill at the next stage.
Lord O'Shaughnessy (Con)
My Lords, I was pleased to put my name to the amendments tabled by my noble friend Lady Finn. I support everything she said about making sure that the bureaucratic workload is kept to a minimum so that the NCS Trust can focus on its primary role.
I have great sympathy with the idea of the annual reports and the business plan focusing on particular areas of interest, such as diversification of intake, performance, and so on. But there are a couple of reasons why I think it would be a mistake to put it in the Bill and why this more elegant solution from my noble friend is a better approach. First, we cannot possibly anticipate all the things that the NCS, as it succeeds and flourishes between now and whenever—into infinity—could need to focus on from year to year. Inevitably, those challenges will change and we cannot possibly anticipate every single reporting requirement that might be needed to focus on the issue or the challenge of the day. Today, it might be disability; in three years’ time, it could be ethnic minorities, or anything. To put in a small number of things that we can think of now might focus the attention of the board on reporting things that actually in future years might be less important than others. That would be a mistake.
Secondly, all the issues that have been brought up by noble Lords as important focuses for the business plan and the accounts are covered in the royal charter. In the interests of brevity, I will not read out all the relevant bits of the royal charter but pages 7 and 8 talk about the primary functions,
“enabling participants from different backgrounds to work together in local communities”.
The charter says:
“In exercising its primary functions, the objectives of the NCS Trust are … to promote social cohesion”,
and,
“to expand the number of participants”.
The trust is also to,
“have regard to the desirability of … promoting social mobility … personal and social development … ensuring value for money”,
and so on. I think that all the good points that have been made about the sorts of things that the NCS should be reporting on in its annual report and planning for in its annual business plan are covered—perhaps not completely and that is worth a look—in the royal charter.
Having the Bill say that the NCS should report and plan for the primary functions in relation to what is in the royal charter is the correct balance between making sure that the things that we care about are reported on and leaving flexibility with the board to focus on those things that are perhaps more important from one year to the next, rather than putting in the Bill things which might just narrow attention on to a small number of issues, which may not be the most important things in any given year. That is why I think inserting them as primary functions is helpful in clarifying what is important and what we should hold the NCS accountable for, but allowing some flexibility for the board to report on the things that are most pressing in any given year.
Baroness Royall of Blaisdon
My Lords, much of what the noble Lord has just said is eminently sensible. Clearly, things change from year to year and the Bill is going to last in perpetuity, as it were. I will retable some amendments on Report. I hope that the Government will look at the charter to make sure that every aspect we have been speaking about today is truly covered. We will see what happens with amendments on Report but I would like the Minister to say what issues the Government and Parliament would expect the report to cover in 2017, 2018, 2019 or 2020—for the foreseeable future. Yes, priorities can change but I want to ensure that my priorities are covered in the annual report.
Lord Blunkett (Lab)
I have no amendments in this group, so I hope that noble Lords will forgive me for speaking briefly. It is unarguable that we should have the maximum transparency for the new body and sensible measures of comparability. We should be able to take account of value for money and impact, although those are two separate things: value for money is crucial in the wise use of public expenditure, whereas impact—this is why the longitudinal study is so important —is what happens down the line. I just caution the voluntary sector to be careful what it wishes for in terms of other organisations receiving varying amounts of public funding while requiring for others what they might find difficult for themselves.
To put that in context, in the last Parliament I was asked and was happy to be the transitional first chair of Youth United, which sought to bring together the uniformed organisations to increase impact in areas of deprivation. The need to do that, pressed by His Royal Highness Prince Charles, was that, on the whole, those areas of great deprivation were not covered in the same way and the impact was not as great as would be expected or desired. Some of the money that went in came from the LIBOR fines. When those fines are levied, they become public expenditure, albeit, as we might describe it, as “the Chancellor’s slush fund”, where there is as little transparency and openness as I have ever come across, in bidding processes or in acknowledgement of what has happened to the money down the line.
I just counsel that we build in the necessary requirements to ensure that money is used extremely wisely and we do not, to use the words of the noble Baroness, Lady Barker, go down the road of Kids Company. We need to be clear what we expect of the outcomes. As I tried to say on Second Reading, that is not just about numerical targets; it is about outcome measures as to how the impact is held on to, in terms of those young people—where they have come from, where they go to and their participation post the NCS experience. I just repeat: for big and small organisations alike, be careful what you wish for.
Lord Stevenson of Balmacara (Lab)
My Lords, those are wise words and they will ring in the ear long after my noble friend Lord Blunkett has uttered them. We should bear them in mind throughout this debate.
I do not want to say much about this, because the purpose of these probing amendments is to invite the Minister to reflect on how he wishes to take this forward and we should listen to him carefully. I will make two points. First, what is decided about the reporting functions must be the corollary of what we have decided about the structure. Rather than repeating the debate on the first amendment last week, I think that it is obvious that, if the structure adopted is the royal charter body, for example, it will bring with it the implications of a non-departmental public body. Therefore, the auditing by the NAO will be brought to the Public Accounts Committee and there will be a virtuous cycle of accounting and reporting, which we are well used to and will probably cover one aspect of this.
On the points that have been made more generally, this organisation will serve a much wider public purpose than simply to operate a number of courses or to commission those courses. The report is to Parliament, which raises much wider questions about what you would need to do. As has rightly been said, many of these measures are not numerical, so it would be interesting and challenging to see how one could frame that in a way that would both be a formal account—a measure of the consumption of resources and the impact of those resources in terms of diversity and reach—and provide information that will allow those who have to engage with this body to anticipate and work closely together with it. I echo the wise words of the noble Lord, Lord Hodgson, about the need for a broader cut through this—not just an annual report, but a commissioned report looking at some of the wider indices. That might be annual, but I agree that it perhaps needs to happen a bit later. That might be a way of framing this. I look forward to hearing what the Minister has to say on the matter.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord Ashton of Hyde) (Con)
I am grateful to all noble Lords for their contributions. A large number of amendments in this group are to do with reporting requirements or the business plan. In the interests of time, I will be brief in my response. I hope I do not come across as negative, because I do not mean to be. We are grateful for suggestions of improvement to the Bill, which has received almost unanimous support, and I realise that these are meant to be constructive. We are listening and will take careful note of all the points raised. As I agreed last week, there are some areas which we can explore further, such as reporting on disabled participants.
There was a recurring theme in many noble Lords’ contributions: there are many other things they would like the NCS to do. I want to make the point at the outset—because it goes through the whole of Committee stage—that we are very keen that the NCS concentrates on what it is meant to do and is doing well and we do not want it distracted. From my experience, this is a fatal temptation in business and in government programmes. As I said at the beginning of Second Reading, we want the Bill to set up the NCS in perpetuity so that it is able to do, and to continue to do, what it has been doing well.
Nearly 20 amendments have been tabled specifying additional reporting requirements for the trust, in addition to the seven requirements already in the Bill. I hope that the Committee sees that this risks being excessive, bearing in mind that some noble Lords have argued cogently that we must not stifle this enterprising and growing organisation. There must be a balance between the reporting essential to maintain public confidence in the NCS and allowing the trust space to focus on quality delivery. While we think that we should keep the mandatory reporting requirements in the Bill at a high level, I propose that the Government write to the trust to seek its assurances that its reporting will be thorough and will take into account the views of this House, as expressed in the various amendments. I am happy to commit to doing that.
Amendments 19 and 23, in the names of the noble Baroness, Lady Finn, and the noble Lords, Lord Maude and Lord O’Shaughnessy, would restrict the NCS Trust’s annual report and business plan to refer only to its primary functions. On the one hand, for understandable reasons, the noble Lords want to minimise reporting requirements; on the other, it is clear from many other noble Lords, who would like to add reporting requirements, that they feel that the report and business plan should refer to the full breadth of functions as set out in the royal charter. These are the tools through which Parliament and the public can hold the NCS to account. I hope noble Lords will see that we have tried to strike a reasonable balance with the reporting requirements in the Bill.
I thank the noble Baroness, Lady Barker, and the noble Lord, Lord Wallace, for their amendments. Amendments 21, 28 and 39 relate to how the trust consults and collaborates with the voluntary sector. The noble Baroness, Lady Barker, asked about the cost. In 2014, the average cost per participant was just over £1,500. This does not include overheads and we do not have a combined figure for those. Of course, value for money is one reason why the NAO is involved under the Bill. The NCS does not, and should not, exist in isolation. NCS graduates already have access to an online opportunities hub, which promotes volunteering opportunities. The trust’s primary functions require it to ensure that the NCS is accessible to all. If it is to do this, it will have to collaborate with other organisations with the right reach.
That being said, the NCS Trust is being established to arrange for the delivery of the NCS programme—to commission services. It is not being established as an infrastructure body, or representative body for the voluntary sector. Therefore, it would not be right to mandate the trust to report on how it has resourced the voluntary sector, as Amendment 28 would prescribe. The trust works with more than 200 providers, over 80% of which are public or voluntary sector organisations. They are resourced by the trust by entering into a contract with it, but the trust’s purpose is not specifically to resource the voluntary sector. Asking the trust to report on this, therefore, is not appropriate.
We agree that the trust’s relationship with the voluntary sector is vital, but we believe it is the trust’s job to report on its performance to Parliament. Other organisations would have a perception of the trust’s performance based only on their interactions with the trust or the programme. That will, in every case, be limited in some way. We do not believe Amendment 39 to be an appropriate ask of the trust as it is not necessary to require it to consult with the sector before completing an annual report. Furthermore, the trust does not contract with voluntary sector organisations alone; it oversees many relationships across the private, public and voluntary sectors to achieve its core aim: the provision of the NCS in England.
Amendments 29 and 33, as well as Amendment 30 tabled by the noble Baroness, Lady Royall, consider how the NCS sits alongside other programmes. The NCS has a specific structure. It is two or four weeks long and while different providers bring different approaches, all of them have to deliver the core components of the NCS as co-ordinated by the trust. Whether or not it is unique—I realise that there are different interpretations of that word in relation to the NCS—it is a short programme, designed to be accessible to all young people. It cannot be compared with much longer or part-time programmes.
Having said that, the trust must always look to learn from the youth sector, in this country and abroad. Where there are programmes that deliver outcomes similar to those of the NCS—social cohesion, social engagement and social mobility—it is the trust’s job to draw on best practice and shared learning. This year has been a case in point. The trust is co-ordinating an autumn pathfinders project, working with 18 organisations that are trialling innovative methods of delivering the NCS to help extend its reach into local communities.
Amendments 29 and 30 would require the trust to compare its value for money with that of relevant programmes. We have to be careful that anything we ask of the trust in statute is a duty it can reasonably be expected to fulfil. It would not be practical to mandate the trust to compare its outcomes with the value for money of other programmes. It would need to have significant amounts of information about other schemes to accurately compare value for money. This is not information that the trust can or should be expected to gather.
Amendment 31 would require the trust to report on its efficiency and effectiveness. I will respond also to Amendment 36 from the noble Baroness, Lady Royall, which would require the trust to report on how it has met its targets. I can be clear on both points. While the trust will report on its performance with rigour, the National Audit Office will become its auditor. The Bill will ensure that the NAO has the power not merely to audit the trust but to conduct reviews into its efficiency and effectiveness. This will include the extent to which it has achieved its targets. The NAO will undertake these reviews robustly. Therefore, we do not think it necessary to require the trust to report on this as well. Its accounts will be open to sufficient scrutiny by the NAO and Parliament.
Amendments 32 and 34 concern reporting on the trust’s board. The Government agree that the make-up of the board is very important, but the trust does not entirely control board appointments. It is the monarch, acting on the Prime Minister’s advice, who makes the final appointments, following a competition run by the chair. It would therefore not be reasonable to expect the trust to report on something over which the Government have the final say. The Government will, of course, have to comply with the public sector equalities duty when making these appointments, so they will need to take the considerations raised here firmly into account. Independence and integrity are requirements under the public appointments code. Appointments will be made after competitions that are fair, open and merit-based. The royal charter provisions will ensure that the Government have sufficient oversight of the trust’s members, meaning that they will not have to rely on the trust’s self-reporting each year. They will, on a continual basis, be able to ensure the diversity, independence and integrity of the board.
I thank the noble Baroness, Lady Royall, for her contribution. Her Amendment 25 raises a useful point of clarification. It asks that the reporting on the number of participants includes those who have completed the programme. The Bill specifies that the trust will have to report on the number of participants for each year and I assure the noble Baroness that this will include the number of young people who graduate from the NCS.
Baroness Royall of Blaisdon
My Lords, may I ask a question about the opportunities hub? I think the Minister said that the graduates of the NCS have access to the opportunities hub. If that is the case, it would be very good if all young people, even those who were not NCS graduates, had access to an opportunities hub so that all young people, not just those who were fortunate enough to go through the NCS, could see what the possibilities of volunteering were for them.
Lord Ashton of Hyde
Yes, I can see the point there. I believe, but could not swear to it, that it is open only to graduates at the moment. But I am certainly happy to look at that. We can come back to it later.
Baroness Barker
Perhaps the Minister could consider one point, which was made by the noble Lord, Lord Blunkett, when he said that it was important that the NCS be subject to comparison with other charities. Having listened to what the noble Lord, Lord O’Shaughnessy, said about the charter, does the Minister accept that some of us understand that it is quite possible for the NCS to be evaluated in the terms set out in the Bill, but that nowhere in any of this is there a requirement for there to be a comparison with any other service? Could he therefore explain, perhaps in writing, where it should be possible for anyone who wishes to to compare the work of the NCS Trust with the rest of the sector to find out the data on that? Is it the National Audit Office?
Lord Ashton of Hyde
I will certainly consider what the noble Baroness has said and will write to her if there is anything more. I think this goes back to what the noble Baroness said at the beginning of the previous day in Committee about the uniqueness of the NCS Trust. The NCS Trust is unique and therefore a direct comparison, especially with the charitable sector, which has been referred to a lot, is not necessarily appropriate. This is not a charity. I take the point that it uses a lot of taxpayers’ money and it must be held accountable but I do not think there is a direct comparison with it as a commissioner of work from the voluntary sector. It is not part of the voluntary sector itself. That is off the top of my head, but of course I will go back and check with my officials that I have not said something awful.
Lord Hodgson of Astley Abbotts
The Minister gave a very thorough and lengthy reply to all these amendments. I am seeking clarification. Is he saying that the Government believe that an internal letter written by the Government to the NCS Trust and a no doubt very worthy investigative body at DCMS answers all the points that have been made in this group of amendments, that the Government do not intend to make any movement towards any of the points that have been made this afternoon, that in the Government’s view the situation as presently described provides a perfectly adequate balance and a perfectly adequate way of ensuring that small groups of charities are not squeezed out, and that we are going to depend on an entirely internal process with once a year an overview at the very high level from the National Audit Office? Is that where we have arrived?
Lord Ashton of Hyde
I do not think that is exactly what I said in the course of my very lengthy remarks, but we are in the middle of two different views here, possibly represented by my noble friends Lady Finn, Lord Maude and Lord O’Shaughnessy on one side and practically all other noble Lords on the other. I may be miscategorising that. We think there should be value for money and accountability. That is part of the point of the Bill and why the National Audit Office will come in, why parliamentary committees can hold the NCS to account and why we have asked it to report in these seven categories. They are not just numeric; they include more qualitative things such as the quality of the programmes provided or arranged by the NCS Trust.
On my noble friend’s point about where we leave it, as I said in my remarks, we think this is a good balance. I said that we would write to the NCS Trust because we expect it to report on relevant provisions, but we do not want to mandate it in the Bill with a host of extra reporting requirements.
Baroness Finn
I am grateful to the Minister for his remark that the NCS should not be distracted from its core purpose and should continue to do what it has been doing so well. It should stick to its knitting, as it were. I also thank him for his other reassurances on reporting requirements. I am delighted that he will write to the trust board to ask about priorities for annual reporting requirements. In the light of the Minister’s remarks, I beg leave to withdraw the amendment.
Lord Stevenson of Balmacara
My Lords, we have just had classic probing amendment debate which is being replaced by the debate on my group which is, of course, a series of laser-like pounces on the drafting of the Bill. I apologise for dealing with such nitty-gritty, but they reveal one or two other things behind them. I will make the points very quickly and look forward to the response.
My first point is on the timing of the business plan. Business plans are business plans and they will change and vary as we go forward, but as the business plan is in the Bill, attention is drawn to it. The Bill currently states:
“The Secretary of State must lay a copy of the published business plan before each House of Parliament”.
That is presumably because it is the intention of the Secretary of State to get the views of Parliament, if any, on the business plan.
That sets up my next point, which is that the business plan has to be published before 1 June in the financial year concerned, which seems slightly odd. First, why June? The peak of the activity of the NCS will usually be over the summer period, which gives rather a short period to allow anyone to comment on the content of the business plan. Secondly, most people would want to comment on a business plan before the year in which it takes place, so to do it in the June of the financial year of the programme suggests that two months will have already elapsed and the money will already have been spent, so it limits the effectiveness of the comments. I suggest to the Minister that there is a problem here, in which case the dates might be changed, but if that is the intention, then a slight change in the phrasing to suggest that the business plan must be published no later than 1 June of the year in question might give us a better chance of making sure it is available in time to have some serious comments available to the organisation.
We are now all too well aware of how easy it is for royal charters to be changed by Ministers. Amendment 48 would restore balance to the process. The Bill would state that the charter may be amended provided that no amendment contradicts the NCS Bill once it has gained Royal Assent. I understand that the Bill is meant to be superior to the royal charter, but it would surely be bad practice to have a Bill that says one thing and a royal charter that says another, although I have discovered one mistake to that effect. I therefore suggest that a change should be made so that an amendment can be made to the charter only if it does not contradict the NCS Bill. I look forward to support for that idea.
I am concerned about the transfer scheme in the schedule but not because there is anything wrong with it. It is good that the schedule provides the proper requirement that good consultation takes place, but it goes on to state in paragraph 5(3),
“it does not matter whether consultation takes place before or after the passing of this Act”.
That seems a little cavalier to the staff interests which might be involved. I know it is a small organisation and it may be that there are other procedures that I am not aware of, but in this case I wonder whether the Minister might take this back and consider again whether the consultation should be completed before the Act is concreted, because it will set out the arrangements under which the staff are to be employed. In a parallel way, Amendment 54 asks that the unions, should there be any involved in this, and I hope there are, should also be involved in that process. I beg to move.
Lord Ashton of Hyde
My Lords, I thank the noble Lord for raising those points. To take them in order, on Amendment 22, the fact that the business plan is being published before June in the financial year with which the plan is concerned is intentional. The business plan needs to cover the forthcoming work. I agree that ideally we would want it as early in the financial year as possible. We have allowed the NCS Trust a reasonable period of time to produce the plan, but the requirement to publish it before June will ensure that it will precede the bulk of the year, to include the trust’s busiest time, as the noble Lord mentioned, which is overseeing the programme during the summer holidays. I will think about the noble Lord’s suggestion of “no later than June” as opposed to “before June”. I cannot see that it makes a huge amount of difference, but I will certainly think about it, without any guarantee of doing anything about it.
The noble Lord’s Amendment 48 mirrors what is in Article 15.1 of the charter by making it explicit that amendments to the charter must not contradict the provisions of the Bill. The noble Lord could not resist mentioning that he had found a difference between the Bill and the charter, but I acknowledge it. It is perfectly reasonable for him to mention it yet again. I assure the noble Lord that the Bill, when enacted, will have primacy in law over the royal charter, as he said, which is an essential legal principle. However, given that the charter governs how amendments to its own contents can be made, I argue that the requirement need sit only there.
Amendments 53 and 54 concern Schedule 1, which outlines the transfer scheme for the trust. The Government and the current NCS Trust agree that conducting a proper consultation prior to Royal Assent, which we hope will be early next year, would not be practical. We would want to make sure that it is exactly that: an open consultation, which gives all relevant stakeholders the time to give their considered views. Other noble Lords, including the noble Lord, Lord Blunkett, have been clear that the transition between old and new bodies will need time. The Government agree. I agree to write to the noble Lord about transition arrangements. We expect this to take between 12 and 18 months. The staff consultation is a critical element of this. We should not be rushing into it now before the rest of the transition has begun.
We agree with the noble Lord’s point on Amendment 54. Schedule 1 requires the Secretary of State to consult with those persons considered likely to be affected and those that appear to them to represent their interests. I can clarify for the noble Lord that the existing clause is designed to capture, in the usual way, staff and unions as appropriate. I hope I have laid out the Government’s ambition clearly and that the noble Lord will feel able to withdraw the amendment.
Lord Stevenson of Balmacara
I thank the Minister for his consideration. I am sorry that there was a 0-4 scoreline, but these things happen. I beg leave to withdraw the amendment.
Lord Cromwell
“(c) there is an investigation into, or allegations of, inappropriate or criminal behaviour of—(i) the NCS Trust or an NCS provider, or(ii) an NCS Trust or an NCS provider employee or volunteer, in relation to their activities with the NCS Trust or the NCS provider.”
Lord Cromwell (CB)
My Lords, before I speak to the amendment, I draw the Committee’s attention to the wonderful painting on the opposite wall, showing Daniel who would, no doubt, have been a graduate of the NCS, had he been able to. Is it my imagination, or is he pointing a rather admonishing finger at the Minister? Noble Lords can be the judge. I thank the Minister for meeting me to discuss the amendment. I give my overall support to the Bill and what it seeks to achieve. Indeed, I have already proposed to my twin sons, who were 16 last Monday, that they should sign up to the programme.
The most obvious feature of the Bill is that it enables the NCS to gain access to very substantial amounts of public money, both to expand its own work with young people and to subcontract a network of other bodies also working with young people. Given the financial implications of the Bill, there is provision for an immediate report to the Secretary of State if the organisation gets into financial difficulties. That is appropriate and seeks to learn the lessons from other bodies that have received substantial public money and ended up in an unhappy situation. One such has been referred to repeatedly in the Committee’s discussions today and previously.
Amendment 40 simply seeks to introduce a similar requirement should allegations or evidence occur of other forms of impropriety or inappropriate behaviour with young people. This would learn the lessons from the distressing cases of other organisations charged with looking after young people and children where abuse and other criminal acts occurred which were tolerated, ignored or, indeed, covered up, sometimes for decades, while wrong behaviour continued unchecked. Although we hope it will never occur, it would be naive to suppose that a network of organisations and people working with children will never give rise to such incidents or allegations, whether well founded or not.
The acid test is whether, should such an allegation or incident occur in one of the organisations being funded, the Secretary of State would want to know immediately. My strong belief is that the Secretary of State would want to know at once. When the Minister and his officials met me recently to discuss the amendment, there was some suggestion that the requirement might already be covered more generically somewhere in the documents of the NCS. I look forward to hearing further from the Minister on that point. My strong view is that, even if there is some clause deep in the NCS text that could be interpreted as enabling the NCS to be held to account post facto if it eventually emerges that something has occurred or been alleged, it would be far more helpful to have in the Bill, in clear, unequivocal terms, a responsibility to report to the Secretary of State as an automatic and immediate action so that the matter is put beyond doubt. This would make it far more likely that such matters would be addressed promptly, rather than emerging painfully and traumatically later. There is a great temptation for any organisation, particularly where funding is at stake, to believe that such matters are better dealt with—or, perhaps, contained—locally rather than shared upwards. As noble Lords will know, there is an inquiry struggling to get under way in the other place into areas where such lapses of judgment in the care of children have occurred in the past.
Finally, I am wary of anything in the Bill which will burden the NCS, or those with whom it works, with any additional administrative burden or cost. The amendment will not do so: it is a simple requirement to notify immediately in the event of an occurrence and not a regular or time-consuming administrative task. There is much to support in the Bill, and I hope that my straightforward amendment will enable a modest but important enhancement. I beg to move.
Lord Ashton of Hyde
My Lords, the noble Lord, Lord Cromwell, makes the case that, in the same way that the Government should be informed in the case of serious financial issues, it should be informed in the event of a criminal allegation or investigation. We absolutely agree that the Government must be informed should an investigation or allegation of this kind occur. It is important to note that the royal charter, the trust’s constitutional document, specifies that it must,
“treat the need to safeguard and promote the wellbeing of participants as the paramount consideration”,
so we are in evident agreement about the importance of the trust’s responsibilities in this area.
I understand that the noble Lord’s intention here is to make these responsibilities explicit. We agree that such important matters must be absolutely clear, so perhaps we might discuss with him later how we may go about doing just that. For example, the noble Lord’s amendment does not distinguish between different types of criminal behaviour; he does not mean safeguarding alone. We would need to give some consideration to proportionality here and to which offences government needs to be informed of. With that commitment to consider this further, I hope the noble Lord is satisfied that he can withdraw the amendment.
Lord Cromwell
I thank the Minister for his comments and look forward to a further chat with him and his officials. I beg leave to withdraw the amendment.
Baroness Barker
“( ) Her Majesty’s Revenue and Customs must—(a) inform the NCS Trust and the Secretary of State annually of the costs of fulfilling its duties under this Act; and(b) include this cost in its annual report under section 6(4) of the Government Resources and Accounts Act 2000 (resource accounts: scrutiny).”
Baroness Barker
My Lords, the Minister and I have differed on whether the term “unique” is applicable. In this regard it certainly is, because the NCS will have the unique privilege of being advertised to every 15, 16 and 17 year-old by Her Majesty’s Revenue and Customs. I thank the Minister for the explanations that he gave to noble Lords not just at Second Reading but in meetings about how that will happen and about the rationale for choosing the HMRC, which is the body with the most accurate information about 16 and 17 year-olds. He will know, because we had a discussion, that I have a reservation about a very small group of 16 and 17 year-olds for whom this may present a problem—that is, transgender young people, who may be written to using names that are no longer appropriate, and so on. That issue is not to be solved within the Bill; it is a wider issue than that, but I hope that it is one that, given the universal nature of this contact, the Government might give some consideration to.
The value of being able to contact every 16 and 17 year-old is immense. Quite how valuable it is we will come to know only in years to come when we have the annual reports, which will tell us whether the body has achieved the universal coverage of young people expected of it. In the meantime, it might be valid to know the cost of doing this, so we have come forward with the amendment. It is, again, a matter of reporting to high standards. Charities are often required in their annual reports to make declarations about help that they have had in kind. I know that it is not intended that the body be a charity, but none the less it seems to me that government could be open about the extent to which the trust is having this additional, not to say unique, promotion to young people, so that we and all others who will watch this organisation intently can see how well it performs, given the unique nature of its support. I beg to move.
Lord Cope of Berkeley (Con)
My Lords, I am unhappy about Clause 9 standing part of the Bill. I should make it clear straightaway that this marketing ploy—I think it was described as such by the Minister, or he may have used a similar phrase—is a brilliant idea as far as the NCS is concerned, but it is a rotten idea as far as HMRC is concerned. That is the basis of my opposition to this clause.
HMRC has for centuries guarded its data on individuals passionately and with great care. That is, after all, statutory. That is why we have to amend the law in order to allow this to happen. However, it is more than that. It believes that it is essential for the collection of tax. I was a Treasury Minister in the Commons, and I remember very clearly that sometimes there were clauses in Finance Bills which were designed to catch particular things that were happening in the tax system where a fiddle was going on or somebody was trying to do something that HMRC did not like. It would never disclose, even to me, the Minister who was going to have argue about it in the Commons, the names of the taxpayers, even if they were great companies, that might be involved in the tax arrangements. That is how carefully it guarded its data, yet they are to be used for this marketing ploy.
I am concerned, not least about the slippery slope argument. If HMRC is pushed into doing this for the NCS, there are all sorts of messages that the Government constantly want to put out to the population and to particular members of the population, such as road safety or health issues such as stopping smoking or having a flu jab. There are all sorts of matters where it is very desirable that the Government should put out those messages, but if they are all allowed to be put out by this mechanism—my goodness. When you get a letter from HMRC you will have to empty it into the waste paper basket just as you do with magazines nowadays with all the sales literature and charity appeals that fall out of some of them. That is why I am very cautious about whether we should allow this clause into the Bill. In particular, I want to put a peg in the slippery slope to try to ensure that it does not happen in other Bills for quite other purposes.
There is one other point about the drafting of the Bill. This is what I think of as the Portia point. HMRC and the NCS will be able to send messages to young people, carefully defined and, as we discovered the other day, defined more narrowly than Clause 1 and the scheme as a whole, or to their parents or carers. If HMRC sends a message of this kind to an 18 year-old, that is illegal and HMRC will be committing a crime. If it sends it to a childless couple, a grandparent or someone else, it will be going beyond what is allowed in this clause. I suggest that some consideration might be given to that by those who draft these things. However, my major point is to try to make sure that if this goes through—and I shall not oppose it, of course—it should not be a precedent for HMRC sending out messages to all sorts of groups whom the Government wish to influence or to sell something to.
Lord Lucas (Con)
My Lords, since this is HMRC and it refuses to use email, presumably this is printed material. If it is sending it out to this group of kids, that is a couple of million kids a year and their parents, at £1 a time when you include the postage and the printing. This is not cheap stuff. I read the wording of this clause to allow the National Citizen Service to include anything in here. It says what is in here. It can include advertisements for other charitable services or perhaps for a bank to raise a bit of money for itself. This seems a very widely drafted clause, and I am not at all sure that it achieves the purposes that have been set out for it.
Lord Stevenson of Balmacara
My Lords, I have an amendment in this group. This is one of my favourite topics. I have raised it in every Bill I have worked on, with no success at all, usually to substitute “must” for “may”. On this occasion, I noticed rather late in the day that there are two “mays” in this clause, and I have to be careful that it is not the first one, because that would play directly into the hands of the noble Lord, Lord Cope, who has made quite clear his reservations about this arrangement, which is going to provide the necessary oxygen to try to fuel the excitement that will be felt right across the country when letters drop into the houses of those who might be eligible to join. He might want to hold his choler a little longer because the Digital Economy Bill, which is coming down the track very shortly, contains swathes of permissions for data to be shared, not only within Whitehall, which is perfectly understandable, but wider, to local authorities and others. The noble Lord ain’t seen nothing yet. It is going to be quite interesting to see how that plays here.
I am sorry to have taken up the Committee’s time. My amendment deals with Clause 9(3) in the context of communicating information. I think it has probably come from the draftsman’s pen because “may” and “must” are drafted as “may” throughout. There is probably a word processor instruction to make sure that no “musts” ever appear. But surely on this occasion we are talking about information that has to be derived by the NCS from its own resources, and it must be that information that goes out. Therefore, it is right on this occasion that it should be “must”.
Lord Ashton of Hyde
My Lords, I thank noble Lords for bringing us to Clause 9 and the new power for HMRC, which has caused a lot of comment in the course of the Bill. I reiterate that this is not the only marketing measure the NCS Trust will use. Your Lordships need only to look at its Twitter account to see its social media presence. However, this power is a means of ensuring, as far as government can, that as many young people as possible have the opportunity to hear about the NCS. HMRC will send on the information but it will not feel or look like an HMRC communication. My speaking notes say it will be colourful and exciting—I am sure it will—and it will be written by those at the trust who know how to communicate with young people effectively.
Amendment 42 in the names of the noble Baroness, Lady Barker, and the noble Lord, Lord Wallace, alludes to the importance of ensuring that the cost of HMRC writing to young people is value for money. The charter specifies that in all it does the trust must have regard to value for money and I think this is a principle that we all agree on. HMRC will recover the costs it incurs from the use of its staff, time and resources. These costs will therefore be met from the budget allocated to the NCS rather than from HMRC’s own budget. It is HMRC policy to do so and therefore, as an operational matter, it will need to inform the Secretary of State for Culture, Media and Sport. The expenditure will therefore be included in the NCS expenditure listed in DCMS’s accounts.
The noble Lord, Lord Stevenson, raised the subject of who will be the author of the information HMRC sends out to young people or their parents or carers. I made the point that HMRC will act almost as a delivery service for the NCS Trust—a post person, if you like. The noble Lord’s amendment is in keeping with that in changing the ability for the trust to determine the content of the communication into an obligation to do so. Although “may” is one of my favourite words, we agree with him. This is something I intend to return to on Report.
On my noble friend Lord Cope’s wish to omit the whole clause, I understand his point. As a humble Treasury Whip, I too stood at the Dispatch Box and argued for the need for confidentiality of HMRC information, because it has been shown to aid taxpayer confidence and therefore increase the tax take. However, I respectfully disagree with the argument that this will open the floodgates. HMRC is using the data—only names and addresses—on the NCS’s behalf specifically to prevent it leaving HMRC custody and to keep it confidential. It will maintain its centuries-old commitment to keep confidential all information about individual taxpayers. In fact, this is about not taxpayers, but child benefit recipients. HMRC suits this purpose because it has central government’s best data on young people because of child benefit data. At the age of 16, young people receive their national insurance number from HMRC, which marks the transition to adulthood. At the same time, they become eligible for the NCS, an experience we want to become a rite of passage. The same is not true of road safety or flu jabs, which are ongoing concerns and have a closer affinity with other parts of the public sector, such as the NHS and the DVLA.
With those explanations, I hope noble Lords will feel able not to press their amendments.
Baroness Barker
I thank the Minister for his response. He will appreciate that, because no other organisation is given this benefit in kind, it is something which noble Lords will look at with considerable care in future years, not least to see its efficacy. However, I beg leave to withdraw the amendment.
Lord Lucas
“Duty of care
(1) The NCS Trust has a duty of care to young people who participate in its programmes.(2) The NCS Trust may discharge this duty by—(a) assuring the quality of its programmes by—(i) setting out publicly the standards which its programmes, and those organising them, should meet,(ii) setting out publicly the process which it will follow in assuring these standards,(iii) arranging for the assurance process to take place, and(iv) publishing the results of the assurance process;(b) collecting information on the experience of every young person at the end of each programme, and making reasonable efforts to do so again several months later, and then—(i) publishing a digest of this information at programme and school level, and(ii) making the data available to researchers subject to reasonable safeguards;(c) organising and publishing biennially a longitudinal evaluation of the performance of its programmes and their long-term effects;(d) establishing a system to—(i) facilitate complaints and the raising of concerns,(ii) take effective and appropriate action in respect of each complaint or expression of concern,(iii) record the complaints or concerns and the action taken,and including a summary of this in its annual report;(e) publishing the basis on which it recommends other organisations to its alumni, or to young people who are not yet old enough for its programmes, including—(i) a list of organisations that it recommends, and(ii) the material it makes available on its website and to participants in its programmes, containing information on such organisations.”
Lord Lucas
My Lords, this amendment is about openness. It sets out all the ways in which the National Citizen Service should be open with us and others involved, in particular parents and carers, as to what is going on, the standards that it expects and how it enforces those standards. It is set in the context of a proposed new clause that says, “If you are open in these ways, then that is enough to satisfy your duty of care to the children concerned”.
The NCS is bound to be on the end of endless lawsuits. You cannot have this number of children in odd situations without things going wrong. The NCS is the obvious organisation with money. Charities never have enough money to make them worth suing; the NCS has pots. Giving the NCS some degree of protection seems worthy to me, but the main purpose of the proposed clause is openness.
The easiest thing for me to do is to ask the Minister to reply, then I will pick up on anything he says that I disagree with. I beg to move.
Lord Ashton of Hyde
My Lords, I thank my noble friend for briefly taking us through the amendment, the intention of which relates in part to the concerns raised by the noble Lord, Lord Cromwell. As I have said, the trust’s draft royal charter stipulates that the NCS Trust’s paramount concern is the well-being of young people participating in the programme. To fulfil this obligation, it must ensure a proper duty of care to those young people. The Bill leaves the trust with the operational freedom to determine how best to do this but the Government and Parliament can hold it to account for how it performs.
I am pleased to confirm to my noble friend and the noble Baroness, Lady Royall, that we support a longitudinal study as a means to evaluate the NCS and have done some work in this area, monitoring certain participants year on year to track benefits. We have, however, avoided going into this level of detail in the Bill to allow the trust scope to innovate in the future—evaluation practices and terminology might change. When I responded to the first group of amendments I made the point that we have to allow the trust as much freedom as possible to use its own expertise. We agree, though, that it is essential that it reports on the quality of the programme and Clause 6(2)(c) makes this a requirement. I hope my noble friend will be satisfied with these commitments for the time being and feel able to withdraw the amendment.
“Heritage railways and tramways: NCS programmes
(1) Nothing in this Act shall prevent a young person from working as a volunteer on a heritage railway or tramway, as part of a programme provided or arranged by the NCS Trust.(2) In carrying out its functions under this Act, the NCS Trust may not act in a manner which has the effect of preventing a young person from working as a volunteer on a heritage railway or tramway as part of a programme which is not provided or arranged by the NCS Trust.(3) In this section—(a) “young person” has the same meaning as “child” in section 558 of the Education Act 1996, save that the person referred to must have attained the age of 12 years; (b) “heritage railway” and “heritage tramway” have the same meanings as in regulation 2 of the Health and Safety (Enforcing Authority for Railways and Other Guided Transport Systems) Regulations 2006; and(c) “volunteer” means a person who engages in an activity which includes spending time, unpaid (except for any travel and other out-of-pocket expenses), doing something which aims to benefit the heritage railway or heritage tramway concerned.”
Lord Faulkner of Worcester (Lab)
My Lords, I apologise to the Committee and to the Minister for tabling Amendment 50A so late, but it has taken a while to establish whether or not my objective can be accomplished by the addition of a new clause. I am extremely grateful to the Public Bill Office for advising me on the wording of the amendment.
Like every other noble Lord who has spoken, I warmly endorse the Bill’s objective of encouraging the participation of young people in projects and programmes that benefit them and our society in general. The purpose of my amendment is to ensure that in one particular sphere of activity these objectives and programmes are not unintentionally placed in jeopardy by the Bill. That sphere of activity relates to the operation of heritage railways and tramways.
I declare an interest as president of the Heritage Railway Association, a not-for-profit body which serves as a trade association established to support the 200 or so preserved railways—many operated by steam—and heritage tramways that exist in the country. The sector makes a considerable contribution towards tourism, leisure activities and local employment. It also plays an important part in encouraging young people to serve as volunteers, so making a material contribution to the running of these enterprises. In return, the railways and tramways provide young people with training and work experience, and help to instil in them teamwork and leadership skills, which is very much in line with the objectives of the National Citizen Service Trust.
In the circumstances, your Lordships might wonder why it is thought necessary to add this new clause to the Bill. The Heritage Railway Association has been advised by leading counsel that existing legislation—specifically, the Employment of Women, Young Persons, and Children Act 1920—throws doubt on the legality of engaging young volunteers in the running of heritage railways and tramways, as it expressly excludes the employment of children in an industrial undertaking. The definition of “industrial undertaking” includes railways, and “child” is now defined by Section 558 of the Education Act 1996 in effect to mean an individual who has not yet reached 16. It had long been assumed that “employment” had its usual meaning of “work under a contract of employment”, but counsel has advised that it extends to include work carried out in a voluntary capacity. So the 1920 Act, passed to prohibit the exploitation of women, young persons and children in an industrial setting—an entirely worthy objective—has been found to make unlawful the voluntary engagement of youngsters on heritage railways, which of course did not exist in the 1920s.
Given the highly appreciated input made by young volunteers to the operation of heritage railways and, more importantly, the need to continue to foster such input for the benefit of the youngsters themselves, and for the future of the railways, we need to secure a resolution of this dilemma. Having explored other ways around the problem, the only feasible solution would appear to be to seek an amendment to the law. I hope that, in any such legislation, the applicable age limit could be set somewhat lower, as a child’s interest is said to crystallise at about 12. Parental approval would be mandatory, of course, and the railway would need to keep a register of the children involved, as the 1920 Act already stipulates. The standard safeguarding, health and safety, and supervisory requirements would necessarily apply.
I believe that an amendment such as this would be looked on favourably by the Office of Rail and Road as enforcing authority. I further believe that, as a result of an exchange of correspondence that I had with Nicky Morgan when she was Secretary of State for Education, that department is also sympathetic to the need to resolve this issue by amendment to the law. Hence the reason for this proposed new clause, to make it clear beyond doubt that the Bill is not to be interpreted in this way. One such issue that might give rise to uncertainty could be the fact that, while the rest of the Bill provides for a lower age of 15 for its application, the clause reflects the heritage rail sector in favouring a minimum age of 12 for its volunteers, in the belief that, on the basis of expert opinion, a person’s interest is more likely to endure at that age.
I wish to make it clear that the proposed new clause would in no way limit the application to children and young people of standard health and safety, safeguarding and supervisory requirements of existing general legislation. The rest of the proposed new clause is self-explanatory. I beg to move.
Lord Ashton of Hyde
My Lords, I am grateful to the noble Lord for his amendment. He reminds us all of the value of heritage railways to this country and how important their upkeep is. I agree that many heritage railways are reliant on volunteers for their maintenance and operation. I also agree that volunteering for a heritage railway can provide young people with many of the skills that the NCS wishes to instil.
On the noble Lord’s concerns about the existing law, I agree that there should be no barriers to young people volunteering their time to support heritage railways. NCS participants work with the local provider delivering the programme to choose a local cause, or charity, to work with during the social action phase of the NCS. Sometimes the provider will invite local charities to present to the young people; sometimes the young people themselves have a clear idea about what they want to dedicate their efforts towards. We agree that it would be wonderful if a group of young people were to choose a local heritage railway as the focus of their efforts—either to fundraise for it or to spend time on site.
I understand the noble Lord’s reasons for tabling this amendment—to seek to amend the law in this area. While it may not be appropriate to do this in this Bill, which does not identify particular areas in which the trust should or should not intervene, I commit to take away the points raised today and to engage with the noble Lord to explore the issue further. There are other things that we need to look at, such as what we mean by “young people” and making sure that it is consistent across the Bill. I hope that the noble Lord accepts my points on this and my commitment to look at the matter further, and feels able to withdraw it for the time being.
Lord Hodgson of Astley Abbotts
I had not cottoned on to this issue before, but I have been listening to this debate. There is, of course, the Canal & River Trust. I am not sure whether a canal would fall within the requirements of the 1920 Act as mentioned by the noble Lord, Lord Faulkner.
Lord Faulkner of Worcester
Yes, my understanding is that canals are also regarded as industry, so they would be covered by the 1920 Act.
Lord Hodgson of Astley Abbotts
That is an important area, where there is a lot of work going on. It is an important charity and it gathers together a lot of volunteers. It is working very hard with regional groups—so if this conversation goes on, could its requirements also be built into the discussion that the Minister is having with the noble Lord, Lord Faulkner?
Lord Ashton of Hyde
The noble Lord makes a good point which also illustrates why it takes time to go through all the ramifications; for example, this would not be just canals. I am sure there are many other organisations which might fall foul of the Act that the noble Lord talks about. That is something to consider, and it may therefore be why it is not possible in the time to add it to this Bill, but I will take that on board and I accept the point that it could apply to more than just railways.
Lord Faulkner of Worcester
I am most grateful to the Minister, who has gone considerably further than I feared he might be able to this afternoon, particularly in reinforcing the point that there should be no barrier to young people volunteering their time to work on heritage railways. That sentence is extraordinarily helpful. I accept with great gratitude the offer to discuss this further with him before Report. I would love the noble Lord, Lord Hodgson, to be part of that discussion so that we can talk about volunteers on canals as well. I beg leave to withdraw the amendment.
House of Lords
Nurses: Training
(8 years, 1 month ago)
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Lord Clark of Windermere
To ask Her Majesty’s Government how many individuals completed training to become qualified nurses in England in 2015.
The Parliamentary Under-Secretary of State, Department of Health (Lord Prior of Brampton) (Con)
My Lords, the latest data available from the Higher Education Statistical Agency show that approximately 23,000 nursing students qualified from higher education courses regulated by the Nursing & Midwifery Council in England in the 2014-15 academic year.
Lord Clark of Windermere (Lab)
I thank the Minister for his considerate Answer and his personal commitment to the health service. I much appreciate it, but does he appreciate that the figures he has provided today mask the true picture of nursing in this country? Will he accept that the coalition Government in 2010 made a massive mistake when they made those savage cuts in nurse training? Even with the increases of late, there are still only 0.6% more nurses now than there were in May 2010, which is in spite of a 31% increase in hospital admissions. Does the Minister accept that the staff of the NHS are keeping the ship afloat? Can the Government offer some concessions to the generosity, commitment and dedication of those staff?
Lord Prior of Brampton
My Lords, there were 3,500 more nurses working in the NHS in 2015 than there were in 2010. In retrospect, we did not anticipate in 2010 the Mid Staffordshire crisis and the Francis report, which led to a very substantial increase in nursing levels after about 2013. The noble Lord is right; we were short of nursing throughout that period. We are addressing that now with a 15% increase in nursing places and we expect that by 2020 there will be 40,000 more nurses than there were in 2015.
Baroness Gardner of Parkes (Con)
My Lords, is the Minister aware of the fact that the Blair Government introduced only one standard for nursing? You had to have five A-levels and take a university degree. The abolition of the state-enrolled nurses, who would have made—and did make—a marvellous contribution, has been very retrograde. Now we are dependent on a large number of foreign nurses. In every hospital that I have visited, we rely on them completely. Why can we not have that intermediate level of training back?
Lord Prior of Brampton
My Lords, as my noble friend probably knows, we are introducing nursing associates into the NHS. There are a thousand in place today, and a further thousand will come in next year. That is the bridge between healthcare support workers and degree-trained nurses. We recognise that there should be another route into nursing—not just the university route, but a more traditional apprenticeship route.
Baroness Watkins of Tavistock
My Lords, can the Minister comment on the ratio between nurses retiring from the service and those coming in? I too welcome the potential development of the nursing associate—although we need to get it right—and graduate-entry nursing, but we still need a system to rapidly increase the number of registered nurses over the next five years. I do not believe that the figures illustrate that we will be replacing like with like in terms of numbers.
Lord Prior of Brampton
My Lords, the best estimate of Health Education England is that, making reasonable assumptions about the attrition rate of students and the retention of existing nurses, by 2020 we will have 40,000 more registered nurses working in the NHS than we do today.
Lord Willis of Knaresborough
Will the Minister accept—at last—that simply providing more training places and increasing the number going through both the associate route and the graduate apprentice route is only part of the solution? At the moment we are losing a huge number of nurses, with roughly 10% of our graduate registered nurses going through attrition each year, as the Minister accepted. Two years ago, the Secretary of State gave a mandate to reduce attrition by 50%. Can the Minister tell the House how successful that has been, and can he put in the Library the figures showing how many fewer people are leaving the profession simply because we are not looking after, nurturing or caring for our existing workforce?
Lord Prior of Brampton
I think that there is some confusion here. The attrition rate that I was referring to was the one in nursing schools, which on average has been running at about 9.5%. Attrition among the regular workforce, which I think the noble Lord is referring to, is clearly a huge issue for us. Interestingly, we have set up a return-to-practice initiative, which has brought a thousand nurses back into the profession at a cost of £2,000 per person. That is extremely good value if we can persuade people to come back into the service. The noble Lord is absolutely right: people retiring early or leaving early is potentially very damaging for the service. However, I reiterate that the figure of an extra 40,000 nurses in the NHS by 2020 is arrived at after making reasonable assumptions about the level of attrition among the existing workforce.
Baroness Wheeler (Lab)
My Lords, the Minister has told the House that there is strong evidence to suggest that moving from bursaries to nurse student loans will increase the availability of nurses. Can he explain exactly what this evidence is and when he considers that the Government will be in a position to publish an independent assessment of the impact on both current recruitment levels and addressing the serious shortage of qualified nursing? Does he accept that the Government’s move to bursaries is particularly risky in the light of the possible threat to EU qualified nurses?
Lord Prior of Brampton
It is not possible to carry out an independent assessment at the moment, as we will not know the rate of applications to nursing schools until January 2017. The courses have consistently, over many years, been oversubscribed by about 40,000 people so, even if there is a fall-off in the number of young men and women who want to become nurses, a significant number of people would like to go to nursing school but are not able to get in at the moment. I think we will have to wait until January before we can be sure whether the switch from bursaries to loans is having an impact.
Nigeria
(8 years, 1 month ago)
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Baroness Cox
To ask Her Majesty’s Government what assessment they have made of the continuing intercommunal conflicts in the northern and Middle Belt states of Nigeria; and what assistance they are providing for those displaced by these conflicts.
The Minister of State, Foreign and Commonwealth Office (Baroness Anelay of St Johns) (Con)
My Lords, we remain deeply concerned by recurrent clashes involving pastoralists and local farmers, particularly in the Middle Belt. We call on all parties to find a peaceful solution. We welcome President Buhari’s commitment to ending intercommunal violence and addressing the economic and environmental challenges that fuel tensions. The Government support a range of initiatives and economic projects to build bridges between communities across Nigeria through the £39 million Stability and Reconciliation Programme.
Baroness Cox (CB)
My Lords, in thanking the Minister for her sympathetic reply, may I ask whether she is aware that last week I was in northern and central belt states of Nigeria and found deeply disturbing evidence of continuing violence by Boko Haram, with the abduction of many hundreds more women and girls in addition to those from Chibok, and growing attacks by Islamist Fulani herders on non-Muslim communities, which have spiralled since May 2015, killing civilians, driving them from their villages and occupying their lands? One such attack happened just last week when we were there, in Kauru, Kaduna state, where 41 villagers were killed. Will Her Majesty’s Government ask the Government of Nigeria what measures they are taking to fulfil more effectively their duty to protect ethnic and religious minorities?
Baroness Anelay of St Johns
The noble Baroness is right to draw the attention of the House to the terrible plight of those who suffer the devastating consequences of intercommunal conflict. I note that she is careful, and right to be careful, to differentiate between the activities of Boko Haram and those of the Fulani—the pastoralists and the farmers—and the conflict there. The result for those who suffer is appalling, whoever the aggressor may be. Therefore, I can say to the noble Baroness that we call on all parties to find a peaceful solution to the underlying causes of these incidents, as I did when I visited Kaduna. We work closely with the Government of Nigeria on these matters.
Baroness Northover (LD)
My Lords, the International Development Select Committee in the Commons, in its report on Nigeria, cited climate change as fuelling the conflict in this area. Now that the UK has finally ratified the Paris climate change treaty, what will be built into our actions in Nigeria to mitigate this problem?
Baroness Anelay of St Johns
The noble Baroness is right to remind us of the report’s conclusions. When I was in Kaduna state the impact of desertification was drawn to my attention, particularly on the Fulani, who, having been tribal herdsmen for centuries, and having moved across country, felt that they had to go deeper into Nigeria. We work very closely with the Government of Nigeria, using DfID and ODA funds to ensure that we can provide some economic support. We particularly want to support some of the peace clubs, which bring together the various conflicting groups that find themselves trying to fight for the same access to land and therefore their livelihoods.
Baroness Berridge (Con)
My Lords, as the Minister outlined, the issue of the Fulani herdsmen has always been a transnational phenomenon. Will the Minister please outline whether there are any proposals for regional meetings for the many countries affected by this issue? In particular, have we had any requests for assistance from the Commonwealth country Cameroon, whose northern part is sandwiched between this area of Nigeria, Chad and the Central African Republic, which are areas of instability affected by this phenomenon?
Baroness Anelay of St Johns
My Lords, our representatives in post—our ambassadors and high commissioners—work on a regional basis. In particular, we have a regional approach to security matters. My noble friend raises an important issue about the impact on Chad, because Lake Chad has been drying up, which has caused people to be displaced and further conflict. However, it is a matter also for ECOWAS to address.
Lord Collins of Highbury (Lab)
My Lords, I welcome the Minister’s reference to supporting President Buhari’s attempts to meet different elements within the country, and to the £39 million for peace and reconciliation. I want to ask two other questions. What expertise is this country able to provide in building peace and reconciliation, in addition to the money? Will the Minister reassure the House that these funds will not be affected by any future review of DfID spending?
Baroness Anelay of St Johns
My Lords, although I cannot predict what the multilateral aid review will conclude or whether publication is expected before Christmas, I will say that DfID’s £39 million Nigeria Stability and Reconciliation Programme currently supports a range of initiatives across the country to reduce the conflicts and to build bridges between communities, including, as I mentioned briefly, the peace clubs. We are now in a position where more than 4,000 girls and nearly 3,000 boys take part, advocating in their respective communities for peaceful coexistence and contributing to the resolution of communal tensions. The young people can decide the future.
The Lord Bishop of Coventry
My Lords, my diocese is linked to the Anglican diocese of Kaduna, so I know something from the first-hand testimony of the bishop of the effects of communal violence in the Middle Belt states of Nigeria. Some very good reconciliation work is being undertaken there, as we have heard, and it is helpful to hear the assurance of the Minister on DfID funding for such projects. Perhaps I may ask her a little more specifically whether the Government are able to exert any influence on the Nigerian Government to ensure the return of land to communities that have been forcibly displaced.
Baroness Anelay of St Johns
My Lords, there are two parts to this. The first is the displacement of those who have suffered from the appalling and atrocious attacks by Boko Haram, and the only real solution to people being able to go back to an area where the infrastructure has been destroyed is a long-term political solution. We are assisting the Government of Nigeria, particularly from the security point of view. With regard to the conflict over land because of desertification, and the issue of the Fulani and the farmers, there is a government Bill currently before the Nigerian parliamentary system to establish grazing reserves, routes and cattle ranches. It is important that that Bill takes into account fully all the sensitivities of both farmers and herdsmen.
Syria and Iraq: Genocide
(8 years, 1 month ago)
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Lord Alton of Liverpool
To ask Her Majesty’s Government what progress is being made in bringing to justice those responsible for genocide and crimes against humanity, particularly against Yazidis, Christians and other minorities, in Syria and Iraq.
The Minister of State, Foreign and Commonwealth Office (Baroness Anelay of St Johns) (Con)
My Lords, the Government believe that there needs to be accountability for the crimes committed in Syria and Iraq. We continue to support the UN Commission of Inquiry on Syria and have launched a global campaign to bring Daesh to justice. We are working with the Government of Iraq to bring a proposal before the UN to gather and preserve evidence in Iraq as a first step.
Lord Alton of Liverpool (CB)
My Lords, tomorrow is Red Wednesday, when Westminster Abbey, Westminster Cathedral, a synagogue in north London and many other public buildings, including the Palace of Westminster, will be floodlit in red to commemorate all those who have been subjected to genocide or persecuted for their faith. Does the Minister recall that on 20 April the House of Commons declared that ISIS is responsible for genocide, the crime above all crimes? Can she therefore tell us how many British-born ISIS recruits have been brought to justice in British courts? Further, with Russia’s withdrawal last week from the International Criminal Court, are we talking to other Governments about the creation of a freestanding regional tribunal to bring to justice those who have been responsible for these crimes of genocide?
Baroness Anelay of St Johns
My Lords, the noble Lord has asked several important questions and I will try to encapsulate them. Perhaps I may first comment with regard to Russia. When Russia grabbed the headlines about leaving the ICC, it was when I was going to the International Criminal Court in The Hague. I was perfectly well aware that the Russians had never ratified, although they had signed, the initial treaty—they made a play of the headlines, but there we are.
As regards the prosecution of Daesh fighters, it is the case that these have already begun, and I can certainly write to the noble Lord with details of the cases that have been taken in this country. However, around 60 countries have legislation in place to prosecute and penalise foreign terrorist fighters for their activities, and to date at least 50 countries have prosecuted or arrested such fighters or facilitators. On the matter of how a tribunal might be set up, it is possible of course that some form of international or hybrid justice mechanism may prove to be appropriate, but it is too early—and not for us alone—to prejudge that.
Lord Shinkwin (Con)
My Lords, as the order of scale of the genocidal crimes perpetrated by Daesh becomes ever clearer, are Her Majesty’s Government aware that the Parliamentary Assembly of the Council of Europe recently called on the International Criminal Court to accept the existing jurisdiction that it has to prosecute foreign fighters complicit in the atrocities? Can my noble friend tell me whether Her Majesty’s Government will assist the International Criminal Court in that endeavour?
Baroness Anelay of St Johns
My Lords, my noble friend is right about the resolution of the Parliamentary Assembly of the Council of Europe. When I was in The Hague last week, I made it clear both to the president of the ICC and the chief prosecutor that the UK continues fully to respect the independence of the Office of the Prosecutor to determine which situations are subject to preliminary examination. I emphasised, both publicly and privately, that the United Kingdom has a fully co-operative relationship with the ICC and an obligation to respond to all requests for assistance from the Office of the Prosecutor, and will do so.
Lord Gordon of Strathblane (Lab)
My Lords, as well as punishing existing genocide, is there not a case for trying to prevent genocide in the future by tackling its precursor, which is frequently an education system that actively preaches discrimination against minorities? Can the Minister use her influence with DfID to ensure that our aid budget is used positively to help countries preach tolerance within their communities but at the very least to ensure that none of it is used actively to preach discrimination against minorities?
Baroness Anelay of St Johns
My Lords, the DfID aid budget is indeed used to ensure that those who need humanitarian aid receive it but also to address the issue of education. For example, a preliminary project in Iraq is looking at how to ensure that teachers are able to deliver education in a way that means that the next generation will not have some of the prejudices that have unfortunately been seen in some—only some—of the present generation. The Government of Iraq work very closely with us for peace and reconciliation.
Baroness Smith of Newnham (LD)
My Lords, what further discussions have Her Majesty's Government had with other members of the Security Council, particularly Russia and China, about the suffering of minorities at the hands of Daesh? What discussions do they plan to have with the incoming United States Administration?
Baroness Anelay of St Johns
My Lords, following the launch by my right honourable friend the Foreign Secretary in September of the global campaign to bring Daesh to justice, we ensured that we had discussions with the other members of the Security Council—who were already aware of what was about to happen. We are making good progress in discussions across the United Nations on designing a system whereby evidence can be collected to bring Daesh to justice. Although I know that we have our differences with Russia over the way in which it has carried out some of its activities in Syria, I am hopeful that it may be in a position to support a process of bringing forward evidence in conjunction with the Government of Iraq—because it is Iraq led—so that the United Nations can then have a resolution before it which could be accepted by all.
Lord Collins of Highbury (Lab)
I welcome what the Minister has said regarding the commission of inquiry. Just to amplify the last point, how are the Government building a consensus for that? I acknowledge the difficulty at the United Nations, but is not the first step surely to get wider support for that commission of inquiry?
Baroness Anelay of St Johns
My Lords, I think that I must be clearer in my answer and differentiate between the commission of inquiry, which we fully support and which continues as it is, and the work that we will now undertake with the Government of Iraq to present a resolution to the United Nations which would focus on collecting an evidence base. That is a different process. Our diplomats both in the United Nations and around the world are working hard to achieve support for that, including with our allies in the United States.
Lord Singh of Wimbledon (CB)
My Lords, while members of ISIS responsible for open slave markets and the systematic humiliation of Yazidi and Christian women must be brought to justice, does the Minister agree that the systematic bombing—to near extinction—of the people of Syria by both Russia and the West is also a war crime for supposed strategic interests? Does she also agree that the constant repetition of the mantra that Assad must go does nothing whatever to address the underlying religious tensions?
Baroness Anelay of St Johns
No, my Lords, I do not agree. It is the case that 68 members of the global coalition have come together in a signal of international intent to ensure that there is a government in Syria chosen by the Syrian people. It is Assad who is the block upon that: he is the major cause of the conflict and the major cause of death for those who have died—between 85% and 90%. He provides a rallying cry for Daesh. I am afraid that on this occasion, although on many others I can agree with the noble Lord, he and I will have to have different opinions.
Prisoners: Indeterminate Terms
Lord Beecham
To ask Her Majesty’s Government, in the light of the concerns raised by the Chief Inspector of Prisons over the number of prisoners still serving indeterminate terms under the now abolished Imprisonment for Public Protection system, whether they are planning to reduce the number affected; and if so, when.
Baroness Goldie (Con)
My Lords, this report rightly highlights concerns about the management of IPP prisoners. We are committed to helping the progression of IPP prisoners without compromising either the integrity of the parole process or, importantly, the assessment of risk. We are setting up a central unit to speed up the process, and we are working with the Parole Board to process cases as efficiently as possible.
Lord Beecham (Lab)
My Lords, the issue of imprisonment for public protection has been frequently raised in this House, notably by the noble and learned Lord, Lord Brown of Eaton-under-Heywood. This unfortunate legacy of the Labour Government leaves almost 4,000 prisoners—4.5% of our overcrowded prison population—remaining in prison after serving their prescribed sentence; 40% of them have served five or more years over their tariff. The Chief Inspector of Prisons, the chairman of the Parole Board and Michael Gove have all called for action. What steps are the Government taking, and with what resources, as part of the promised IPP review, and what is the projected date for issuing a report? Or does IPP stand for “inordinately protracted policy-making” at a time of unprecedented problems of violence, disorder and self-harm across our massively overcrowded and understaffed prisons?
Baroness Goldie
I thank the noble Lord for acknowledging the genesis of the problem. No one is disputing that the sentencing system introduced back in 2003 was defective. It is a matter for commendation that that system has now been abolished. However, that does not help us in discussing how best to advance the position of the prisoners within that cohort now affected by that former sentencing system. The noble Lord asked what we are doing: I gently point out to him that the figures are encouraging. He will be aware that the number of releases is increasing and, thankfully, the population within this cohort is diminishing. Those are exactly the trajectories we want to see. He will also be aware that the Government, in conjunction with the Parole Board and the National Offender Management Service, have an action plan that has greatly assisted in mitigating the problem. I remind the noble Lord, however, that we should not lose sight of the context in which people are placed in prison. These prisoners were put there at the decree of the original sentencing court by a judge familiar with the circumstances of the case and of the accused. It is very important that we do not forget the obligation of public safety and that we are clear that any releases must be consistent with a robust risk assessment.
Lord Wigley (PC)
My Lords, is the Minister aware that the report shows that more than 80% of IPP prisoners were beyond their tariff expiry date, and that three-quarters of these were category C and D prisoners, some of whom were held in local prisons where offending courses are just not available? Will the Government accept the report’s leading recommendation that IPP prisoners should be held in prisons appropriate to their security classification, with facility to support risk reduction and rehabilitation?
Baroness Goldie
I am not unsympathetic to the general point advanced by the noble Lord. As I said to the noble Lord, Lord Beecham, improvements are under way. I do not dispute for one moment that there have been delays in the system—everyone acknowledges that—but it is also important to acknowledge the positive steps taken by the Government, the independent Parole Board and the National Offender Management Service. Indications are that improvements are being effected. For example, with effect from today we have revised the statutory Parole Board Rules so that parole panels can release IPP prisoners without progressing to an oral hearing. That is one of a number of measures intended to ensure that prisoners who apply for parole get a proper opportunity for a hearing and a proper assessment of their circumstances. As I said earlier, the overriding consideration must be risk assessment and what is safe for the public.
Lord McNally (LD)
My Lords, the Minister once again emphasises public protection. Is she aware that all the people advocating a change in the system are equally determined to protect the public? Will she confirm that all the measures she announced today will probably still leave more than 2,000 IPP prisoners in custody well into the next decade? Will she acknowledge that this continuation is not only unfair to the individuals but doing real damage to the reputation of our criminal justice system? That is the problem—no one is blaming the Ministers now. I ask her to refer this matter to the Justice Select Committee, to call for evidence that could perhaps get us out of this situation. What she announced today will not.
Baroness Goldie
I say to the noble Lord—and perhaps with greater brevity than his question—that he will be aware that the cohort of prisoners coming within this category have committed serious offences by any definition. He will also be aware that what I described earlier to the noble Lords, Lord Beecham and Lord Wigley, was just one of a number of measures. Many measures have already been taken, including increased resource. The proof of the pudding is in the eating. We are seeing a welcome lowering of the trajectory for those detained in prisons, and an increase in the trajectory for those being released. That is the direction of travel we want.
Asset Freezing (Compensation) Bill [HL]
Tuesday 22nd November 2016
(8 years, 1 month ago)
Lords ChamberRead Full debate Asset Freezing (Compensation) Bill [HL] 2016-17 View all Asset Freezing (Compensation) Bill [HL] 2016-17 Debates Read Hansard Text
Bread and Flour Regulations (Folic Acid) Bill [HL]
Tuesday 22nd November 2016
(8 years, 1 month ago)
Lords ChamberRead Full debate Bread and Flour Regulations (Folic Acid) Bill [HL] 2016-17 View all Bread and Flour Regulations (Folic Acid) Bill [HL] 2016-17 Debates Read Hansard Text
Modern Slavery (Transparency in Supply Chains) Bill [HL]
Tuesday 22nd November 2016
(8 years, 1 month ago)
Lords ChamberRead Full debate Modern Slavery (Transparency in Supply Chains) Bill [HL] 2016-17 View all Modern Slavery (Transparency in Supply Chains) Bill [HL] 2016-17 Debates Read Hansard Text
Contracts for Difference (Allocation) (Excluded Sites) Amendment Regulations 2016
(8 years, 1 month ago)
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Baroness Neville-Rolfe
That the draft Regulations laid before the House on 11 October be approved.
The Minister of State, Department for Business, Energy and Industrial Strategy (Baroness Neville-Rolfe) (Con)
My Lords, the regulations amend a statutory instrument made under the Energy Act 2013. The instrument makes some straightforward amendments to the current regulations to strengthen the non-delivery disincentive mechanism. This mechanism is an important part of the CfD scheme. It encourages developers to stick to the delivery milestones in their contracts and sets a penalty for developers who apply for, and win, a CfD but then either fail to sign the contract or terminate it early. In the first CfD round, two small solar projects failed to sign their contracts. Both had bid at a price that was considered by the industry as not economically viable at the time. It is right that we tighten up the regulations to ensure that such speculative projects are not able to enter future rounds. Two others did not meet their milestone requirements in the view of the LCCC—the Low Carbon Contracts Company, not, of course, Leicestershire County Cricket Club.
Before I go into more detail about how the mechanism currently works and how we propose to change it, I will touch briefly on the latest developments around the CfD scheme. On 9 November we published further details on the second contracts for difference allocation round. This has put an end to the uncertainty that the industry was facing and is a key plank in our commitment to move to a low-carbon energy mix, help tackle climate change and meet our carbon budget requirements. In the announcement, we gave investors, developers and the supporting supply chain the certainty necessary to drive forward investment. Some £290 million of the annual support for new renewables projects has been allocated to the upcoming round.
The noble Lord, Lord Grantchester, will be pleased, in view of what he said in our previous debate, that we have also reaffirmed that £730 million per year will be available to support renewables through the CfD during this Parliament. In our announcement we also set out key parts of the allocation process, including strike prices and supply chain guidance. The supply chain guidance is an important part of the package. It is a compulsory requirement for projects of 300 megawatts and over, and means that projects must provide the Secretary of State with a “good degree of confidence” that the project will make a material contribution to the development of the supply chain. That is all part of the Government’s commitment to growing and strengthening the industrial base.
We have already seen a number of positive developments, particularly in the offshore wind industry, where investment is supporting long-term supply chain development, which is also of lasting value to the UK economy and helps to build a competitive supply chain that is ready to export. This has included investment in the ports of Great Yarmouth and Lowestoft to support Greater Gabbard and East Anglia ONE, as well as the development of the Siemens blade factory in Hull.
This draft instrument will help to strengthen the next CfD allocation round by making sure that developers who win a contract face an appropriate penalty if they do not deliver it. The non-delivery disincentive sets out a penalty for developers who apply for and win a CfD but then either fail to sign the contract, or terminate it early. This may prevent other potentially viable projects receiving a CfD and tie up budget that could otherwise have been used to deliver our objectives. It is right and proper that this behaviour should be discouraged and developers should pay a price. The non-delivery disincentive exclusion already prevents developers from applying to any subsequent round in respect of the same site for 13 months after a CfD is awarded. The intention is to prevent companies who fail to deliver on contracts from entering a future round with essentially the same project. This amendment will extend this exclusion to include the first of any rounds occurring in the following 11 months, so up to a maximum of 24 months. It allows us the flexibility to run rounds less frequently but maintain the same protection against developers gaming the system.
Lord Grantchester (Lab)
My Lords, I thank the Minister for her introduction of these regulations, which are limited in scope and technical in nature. As she says, they will deter non-delivery of contract projects by excluding participants from taking part in future periodic allocation rounds should they not fulfil certain aspects of their projects. I am happy to agree to the regulations today as they would deter applicants to the CfD scheme from making speculative bids for projects that are unlikely to be delivered, thereby tying up parts of the budget for the scheme so that it cannot be delivered. As allocation rounds are being run less frequently than originally anticipated, this would ensure greater delivery of the wider objectives of investment in power-sector decarbonisation.
The Minister has already spoken of some of the effects in the first round but perhaps she could clarify a little further why these measures are being introduced. Can she explain the overall difficulties seen in the evidence from the non-delivery of projects in the first round of contracts for difference allocation? Has there been a certain amount of “hogging” or poor fulfilment of the projects by some participants in the first round? The Explanatory Memorandum was relatively quiet on the consultation outcome and reported generally supportive responses.
I am grateful to the Minister for confirmation that the sum coming forward to support renewable investments in the second round will be the one that has been widely reported. Is she satisfied that there is an adequate appeals process should the applicant consider that he or she has been unfairly treated? Are there adequate provisions for genuine non-compliance should circumstances out of the applicant’s control result in poor fulfilment? Is she satisfied from the experience of the first allocation round that interpretations of what it means not to have delivered are adequately defined?
I would like to follow up on one further aspect of these regulations. What happens to projects that make slow progress or are even abandoned? Can that part of the budget be reallocated to a later round, or are there some residual rights of the applicant to fulfil the project? It is not clear from the memorandum whether the CfD is terminated as a consequence such that it could not be recycled in an orderly manner. The impact assessment considers the overall CfD scheme, objectives and process without considering these regulations specifically. Is there a risk that exclusions to future bidding rounds could give rise to a series of legal actions that could undermine the allocation process more generally?
I would be grateful if the Minister could clarify those aspects of how the regulations might work in practice so that the operation of CfDs will continue to bring forward schemes at least cost to the electricity consumer over the longer term.
Baroness Neville-Rolfe
I thank the noble Lord for his helpful remarks and his welcome for these regulations. As I said earlier, the contracts for difference scheme is designed to incentivise the significant investment we require in our electricity infrastructure to keep our energy supply secure, to keep costs affordable for consumers and to help meet our climate change targets. The instrument being debated today enables us to maximise the effectiveness of future CfD allocation rounds by increasing disincentives for non-delivery and preventing those who have failed to deliver a project in the past from gaming the system.
In my opening remarks I ran through the reasons for the failure of the two small solar projects and the other two projects that failed to meet the milestone requirements of the LCCC. I am satisfied in general that the contractual details and exemptions before us are fit for purpose, especially as amended by these regulations.
The noble Lord asked about using up proceeds of frozen CfDs. We always keep under review the total budget allocated to CfD projects. If any projects that are successful in the next auction fail to sign their contracts or have their contracts terminated we will consider—I think this is probably what the noble Lord wants to hear—the possibility of recycling budget to future auctions. This decision will, however, depend on factors including the pipeline and what will ensure the best value for bill payers. We do not expect this to be significant. In the first auction, as I have said, there were the two small solar projects that failed to sign their contracts and the two projects that had their contracts terminated out of a total of 25. I think I explained last time that there was an overspend against the levy control framework for that period so there was no scope for recycling on that occasion.
On legal action—which is always something I am rather cautious about commenting on—complaints can be made to the LCCC. Ultimately, judicial review would be the legal remedy and there is normally an appropriate and narrow window for this.
As I think we are agreed, this is another step—a small but important technical milestone—towards getting the next CfD auction going. I look forward to the work on the supply chain in the new year and to the auction commencing in April. In the meantime, I commend these regulations to the House.
Higher Education and Research Bill
Tuesday 22nd November 2016
(8 years, 1 month ago)
Lords ChamberRead Full debate Higher Education and Research Act 2017 View all Higher Education and Research Act 2017 Debates Read Hansard Text Amendment Paper: Consideration of Bill Amendments as at 21 November 2016 - (21 Nov 2016)
Environmental Permitting (England and Wales) Regulations 2016
(8 years, 1 month ago)
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Lord Gardiner of Kimble
That the draft Regulations laid before the House on 10 October be approved.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Gardiner of Kimble) (Con)
My Lords, the draft 2016 regulations consolidate and update the rules that enable businesses to carry out a wide range of activities without harming the environment or human health.
As noble Lords know, businesses that manage potentially damaging activities—such as landfill sites, sewage treatment plants, disposal of waste electrical and electronic equipment and flood risk activities—require an environmental permit in order to operate. The environmental permitting regime, in place since 2007, sets out the rules for applying for and regulating permits and rationalises the previous regimes into a common framework. A key component is that it allows applicants to make one application and be issued with one permit for a single site, where previously they would have required several permits. It is designed to make the process of obtaining a permit more predictable for businesses while maintaining a strong level of environmental protection.
The Environment Agency is the regulator for activities involving waste operations and radioactive substances, while local authorities regulate, for example, solvent emission activities and certain types of installation and mobile plant. The regime contains different levels of control, based on risk: exclusions, which are very low-risk activities that may be undertaken without any permit; exemptions, which are lower-risk activities that may be undertaken after registering, which is free; standard rules permits, for specified activities; and bespoke permits, for unique or higher-risk activities.
The draft regulations consolidate the previous legislation, which has been the subject of 15 sets of amendments. The consolidation and updating of the legislation will make the rules more accessible and transparent, helping to reduce the administrative burden on businesses. The consolidation is primarily a tidying-up exercise done in the interests of good administration. The principles of environmental permitting, and in particular the strong protection of the environment, remain. Those who responded to the 2015 public consultation exercise welcomed the consolidation.
Although this is primarily a consolidation exercise, there are two areas of substantive change. The first concerns an exemption for the crushing of fluorescent lamps. This type of tube lighting is commonly found in large offices and other buildings such as hospitals. Many of these lamps contain mercury, which is considered hazardous to humans and the environment. The exemption for the crushing of these lamps is called exemption T17. It allows the use of specifically designed mobile crushing equipment to reduce the volume of waste lamps before they are collected. The mercury emissions are captured by the equipment and the crushed material is then transported to a permitted site later in the day. This provides lamp recyclers with an alternative to collecting and transporting lamps whole.
The draft regulations restrict the situations in which the T17 exemption can be used, reducing the quantity of lamps that can be crushed at a site. They also clarify the conditions for operation of the lamp-crushing equipment required by EU law, making it clear that impermeable surfaces and waterproof covering are required for areas where crushing is carried out.
This change prevents large-scale lamp-crushing operations being carried out without a permit, while allowing smaller-scale operations to continue under the exemption but with enhanced conditions. It strengthens the protection of human health and the environment and levels the playing field for competing businesses that use different approaches to the collection of lamps for recycling. It does so while maintaining flexibility in lamp-collection options for the recycling industry, thereby minimising the impact on collection costs for business. The consultation on this change was carried out at the start of this year and received a positive response.
As a result of this amendment, a permit will now be required in some cases where there was previously an exemption. However, at present we are aware of only one business that is considering applying for a permit, and note that it responded positively to the consultation proposal.
The second change concerns the rules on dredging. There was an error in an earlier amendment to the regulations which transferred flood-risk activities from the previous scheme which regulated those activities into the permitting regime. It concerns the rules for an exemption from the need to apply for a permit for dredging by the Canal & River Trust and other organisations with the statutory function to undertake dredging—called statutory undertakers—such as navigation authorities.
Unfortunately, the amending regulations made in April 2016 inadvertently brought those statutory undertakers into the scheme because of a typographical error. We want to rectify that. The amendment reinstates the position that existed under the previous scheme, where those organisations with a statutory function to undertake dredging did not have to apply for a permit.
Following the consultation on bringing flood-risk activities into the environmental permitting regime, it was made clear in the Government’s response of January 2016 that the intention was to replicate this exemption from the requirement for a permit. We are therefore putting this right.
The regulations will continue to ensure that the environment and human health are protected from harmful activities, while also making the law more accessible and thereby reducing burdens on business. For these reasons, I commend the regulations to the House.
Baroness Jones of Whitchurch (Lab)
My Lords, I thank the noble Lord for his explanation of the new regulations. As he rightly pointed out, this is in effect a consolidation exercise. The original 2010 regulations have since been amended some 15 times, making it difficult for businesses, charities and voluntary bodies to navigate their way around the permit system. As he also pointed out, the permit system covers a very wide range of activities—including the handling of asbestos, the use of landfill, managing mining waste, the collection of waste electronic equipment, the protection of groundwater and the control of industrial emissions—so it is easy to understand how complex the system has become. The fact that the consolidated regulations cover nearly 300 pages is testament to that.
We therefore accept that this is primarily a tidying-up exercise that will make the legislation more accessible and restrict the need for multiple applications. As the noble Lord pointed out, two specific changes have been made. One is to add restrictions to the number of fluorescent lamps containing mercury that can be crushed without a permit and the other is to amend the flood defence permit system to enable organisations with a statutory function, such as the Canal & River Trust, to dredge without a permit, as had previously been the case. Both of these are sensible amendments and we are happy to support them.
We are content to support these consolidating regulations as far as they go. There is, of course, a wider debate to be had about the further steps necessary to reduce pollution, improve our air and water quality and embrace the circular economy, so that we design waste out of the system altogether, perhaps leading to fewer permits being needed. It will be interesting to hear at some point how the Government intend to deliver on their promise to leave the environment in better shape than they found it in these important areas of pollution and waste.
There is an increasingly pressing question about the future of the regulations in a post-EU world and the process that will ultimately take place to review them. Can the Minister update us on the department’s thinking in this regard and the extent to which all such pieces of legislation will be included in a great reform Bill? But I realise that I am straying slightly from the main point at issue today. I hope that the noble Lord can give us some responses, but I will reiterate that we support the regulations.
Lord Gardiner of Kimble
My Lords, I am most grateful to the noble Baroness for her comments and questions. Having seen the document, my heart sank at its many pages, but in fact the framework is 50 pages and there are a lot of schedules. It is inevitably complex, but we want to get it right. It is important that it is part of a tidying-up exercise. I have no doubt that your Lordships and the other place will be considering other elements of the environment and environmental permitting in the years ahead. The noble Baroness is absolutely right. We want—as would any Government—the environment to be left in a better condition than the one we find it in now. That is a laudable aim, and we are working to that end with not only proposals in the 25-year plan for the environment, but many other aspects which perhaps we will debate at other stages in proceedings in this House.
On the question of the United Kingdom leaving the EU and the subject of environmental permitting, the first thing to say is that, as the Prime Minister has said, while we remain a member of the EU, the Government will continue to implement and apply EU legislation. Of course, the outcome of the negotiations with the EU will determine what arrangements apply in relation to EU legislation in future, once we have left the EU. The Government’s intention is to repatriate all the environmental permitting regulations into British law, as the noble Baroness said, via the proposed great repeal Bill. The environmental permitting regime will, as I say, remain under regular review, with proposed amendments to the rules expected between now and when we leave the EU. I see this very much as an evolving situation as we seek to work on the environment.
As I hope I have outlined, these are part of a continuum of updating the rules on permitting and putting them into a single piece of legislation—indeed, making them easier to find and to understand. We have made some changes which I believe improve the rules on the crushing of florescent lamps, and which will help us to protect the environment better, and a change has been made to reinstate the position for the Canal & River Trust and others with a statutory responsibility for dredging. As the noble Baroness has acknowledged absolutely, it is important that they will be exempt from the requirement to hold a permit for dredging because that is precisely part of their remit.
We wish these regulations to be part of our intention to leave the environment in a better condition than the one that we found. I commend these regulations to the House.
Inquiries into Fatal Accidents and Sudden Deaths etc. (Scotland) Act 2016 (Consequential Provisions and Modifications) Order 2016
(8 years, 1 month ago)
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Lord Dunlop
That the draft Order laid before the House on 13 October be approved.
The Parliamentary Under-Secretary of State, Northern Ireland Office and Scotland Office (Lord Dunlop) (Con)
My Lords, the purpose of the Fatal Accidents and Sudden Deaths etc. (Scotland) Act 2016 is to modernise the system of fatal accident inquiries—often referred to as FAIs—in Scotland. The Act is in line with the recommendations of the noble and learned Lord, Lord Cullen of Whitekirk, following his independent review of FAI legislation in 2009. The Act received Royal Assent on 14 January 2016, and the order before your Lordships is made under Section 104 of the Scotland Act 1998. The Section 104 mechanism allows for necessary or expedient legislative provision to be made by the UK Parliament in consequence of an Act of the Scottish Parliament. Certain provisions in the 2016 Act will be given effect in the rest of the UK where that is required, and will make expedient substantive legislative provision in relation to matters reserved to Westminster.
Noble Lords may be aware that fatal accident inquiries are held to establish the circumstances surrounding certain deaths occurring in Scotland. Mandatory FAIs must be held when someone dies in legal custody, or when someone dies as the result of an accident related to their work. FAIs are broadly equivalent to coroners’ inquests in England and Wales, which are independent judicial inquiries conducted into the facts surrounding a death that is sudden, unexpected or unnatural.
Among the changes brought forward by the 2016 Act is one to extend the categories of death in which it is mandatory to hold a fatal accidents inquiry in Scotland. The categories for which mandatory FAIs will be held have been extended to include deaths of children in secure accommodation and in police custody, irrespective of location. These changes relate to devolved matters and so it is right that the Scottish Parliament has legislated for them. This Section 104 order will enact changes to reserved matters to ensure they are consistent with the new Act of the Scottish Parliament. It also makes some substantive policy changes, including making clear that it will become mandatory for an FAI to be held into deaths of service personnel in the course of active duty in Scotland. Until now, this has been at the discretion of the Lord Advocate.
The order also proposes that a military death in the offshore area of the continental shelf adjacent to Scotland would require a mandatory FAI. This brings legislation in Scotland on investigations into military deaths in line with the rest of the UK to the extent that every military death in Scotland will, in future, be subject to a judicial inquiry. This new category of mandatory FAIs will be treated in similar fashion to others—for example, in relation to the power of the Lord Advocate to decide that an FAI is not required because the circumstances of death have been sufficiently established in other proceedings.
These proposed changes have taken on added significance in recent days following the death of Lance Corporal Joe Spencer of 3rd Battalion The Rifles at RAF Tain. Lance Corporal Spencer tragically died near Inverness, three weeks ago today, on Tuesday 1 November, in what the Ministry of Defence has described as a “live fire accident”. I am sure that I speak for the whole House in offering our condolences to Lance Corporal Spencer’s family, friends and colleagues. In legal terms, the mandatory requirement for a fatal accident inquiry, proposed in this order, is not retrospective. Even if the death is found to have been in the circumstances provided for, it will not apply to the death of Lance Corporal Spencer. Instead, the existing arrangements under the Fatal Accidents Act 1976 will apply, and it will be within the discretion of the Lord Advocate to rule on whether an FAI is held.
This sad incident, none the less, highlights the importance of the order and illustrates why the UK and Scottish Governments, Ministers and officials, have worked closely together to bring it about. I hope that your Lordships will agree that this collaboration represents another example of the UK Government’s commitment to work with the Scottish Government to make the devolution settlement work effectively. I beg to move.
Lord Hope of Craighead (CB)
My Lords, I join the Minister in expressing condolence to Lance Corporal Spencer and his family for that tragic incident.
I welcome what the noble Lord has said about the introduction of a mandatory FAI in the case of servicemen who die in Scotland or outside the mainland in territorial waters. If these deaths occur in England, there is a mandatory inquest. One of the problems has been the imbalance between the mandatory system in England and Wales and the discretionary system in Scotland. It makes good sense that they should be on the same basis.
Another point worth noting is that the FAI system is very well equipped for a thorough investigation as to the reason for the death, which is not always available in inquests because of the way in which they are organised in England and Wales. It has caused problems for the Supreme Court in dealing with cases which arise overseas, such as deaths occurring during the situation in Iraq. The Scottish system is well equipped and there is no question that introducing a mandatory system provides a very sound basis for finding out exactly why these tragic incidents occurred and also making arrangements to avoid, if possible, a repetition of the same event. I welcome very much what the Minister has said.
Lord Wallace of Tankerness (LD)
My Lords, I add my condolences to those of the Minister and the noble and learned Lord, Lord Hope.
I welcome the proposed changes and the opportunity taken in the Section 104 order to extend the categories where a mandatory fatal accident inquiry is carried out. The Minister will be aware that there has been concern for some time because the bodies of service personnel who are killed not in the circumstances he described but in foreign parts are generally repatriated to England, and therefore the jurisdiction has been an English jurisdiction, albeit that the families of the servicemen involved may well be in Scotland. Concern has been expressed about this and I know that efforts have been made to resolve it. I have lost track of whether any progress has been made. Will the Minister take this opportunity to indicate what the position is?
Lord McAvoy (Lab)
My Lords, I add my condolences to those expressed to the family of Lance Corporal Joe Spencer. It befits this House that such condolences are offered.
I thank the Minister for the usual clarity with which he explained the order, which we welcome. The legislation makes much-needed changes to update and improve the system of FAIs. These are tragic cases and are incredibly difficult for the families affected. It is right that we should do everything we can to establish what happened to their loved one, and to make sure that lessons are learned for the future.
The changes made by the 2016 Act go some way to improve the system. The Cullen review made its recommendations seven years ago now, so it is welcome that we have reached this point of action. There has been a wait to see this system updated. This order allows the 2016 Act to be implemented in full, so we are happy to lend it our support. As has been mentioned, particularly welcome are the provisions on the death of military service personnel. This issue has been made painfully resonant in the past few weeks by the tragic death of Lance Corporal Spencer. We again send our thoughts and condolences to his family and friends.
I thank the noble and learned Lord, Lord Hope of Craighead, for the specific, experienced point of view he brought to this brief debate. I echo the words of the Minister that this UK Parliament stands ready, as I think it always has, to make devolution work not only in Scotland but in the other devolved Assemblies in the country.
Lord Dunlop
My Lords, I thank all noble Lords who have taken part in this short debate for their contributions and for their support for this order.
I very much agree with what the noble and learned Lord, Lord Hope, said about the system in Scotland being well equipped to deal with these inquiries.
To pick up the point made by the noble and learned Lord, Lord Wallace, the law on service personnel dying abroad has been re-enacted as Section 7 of the Inquiries into Fatal Accidents and Sudden Deaths etc. (Scotland) Act 2016. I think I am right in saying that, where a death occurs abroad and the body is repatriated, the Lord Advocate has discretion to launch an inquiry into such a death. If I have not covered his point fully, I am happy to write to him but I hope that deals with it.
The order allows for the 2016 Act to be given effect in the rest of the United Kingdom where that is required and, as has already been said, to bring the treatment of military deaths in Scotland in line with the rest of the UK. On that basis, I commend the order to the House.
Article 50 (Constitution Committee Report)
(8 years, 1 month ago)
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Lord Lang of Monkton
That this House takes note of the Report from the Constitution Committee The Invoking of Article 50 (4th Report, HL Paper 44).
Lord Lang of Monkton (Con)
My Lords, as I understand it to be the will of the House that the next two Motions be debated together, I will speak to the Motion in my name, to be followed shortly by the noble Lord, Lord Boswell of Aynho, who will speak to his Motion. I welcome the opportunity that today’s debate brings the House to consider issues that arise from both your Lordships’ Constitution Committee’s report on the invoking of Article 50 and the European Union Committee’s report on parliamentary scrutiny of Brexit. I hope there may be benefit in debating these in tandem, as they are complementary in nature, and I look forward to the debate.
In our committee’s report, we did not feel qualified to offer a firm view on whether, as a matter of law, the Article 50 trigger should be dealt with by the royal prerogative or by involving Parliament, particularly since that very question was then before the High Court. Following the judgment handed down by the Divisional Court, the Government are now pursuing their case in the Supreme Court. The Government are of course fully entitled to appeal against the earlier judgment, and the Supreme Court is there to respond. However, there is all the difference in the world between appealing a court judgment and attacking the judges who delivered it, so I feel in no way inhibited from commenting on the disgraceful behaviour of certain quarters of the press and some Brexit campaigners, with their vicious vilification of three distinguished judges. The judges pronounced in good faith on a pure question of law. The attack on them was shameful. I find it strange, to say the least, that those who during the referendum campaigned most passionately to “take back control” should then choose to breach a core principle of our unwritten British constitution—namely, upholding the independence of the judiciary—and that they should do so by attacking judges who, in a British court, delivered a judgment that placed great emphasis on another core principle: the sovereignty of Parliament.
Our committee recognised, when considering the options for invoking Article 50, that there were persuasive arguments on both sides. But we concluded that, whatever the legal outcome, the constitutional position was clear. I quote from our report:
“It would be constitutionally inappropriate, not to mention setting a disturbing precedent, for the Executive to act on an advisory referendum without explicit parliamentary approval … The Government should not trigger Article 50 without consulting Parliament”.
I just referred to the advisory referendum, and it is true that, technically, it was advisory. But it is also true that the Government gave repeated undertakings to implement the outcome, whatever it might be. That adds force to the need now for all sides to agree that the Brexit question was answered by the referendum result. It is now time for Parliament to honour the decision that it placed in the hands of the electorate and for Parliament to carry it through. To paraphrase Dicey, the will of the people is not known but by the laws of Parliament. I do not see that as dismissing the outcome of a referendum but rather as an injunction to Parliament to implement it. The fact that both the holding of the referendum and the implementing of the result featured in the governing party’s manifesto at the last election adds force, in this House, to the argument. Parliament therefore has a duty to see that the will of the people is carried out. We live, however, in a representative democracy, not a direct one. In the end it is for Parliament to decide, not for the Government alone. Whether referendums are a good thing is a discussion for another day.
Your Lordships will have noted that Scotland and Wales have successfully applied to intervene in the appeal to the Supreme Court, claiming in Scotland’s case that any Bill to trigger Article 50 would require the consent of the Scottish Parliament. We had indicated in our report that we did not think such a Bill would require legislative consent from the devolved legislatures. However, if a Bill is brought forward, further thought may need to be given to its effect in light of any appeal decision. We had also earlier railed against the use of declaratory legislation in the Scotland Act and against citing the Sewel convention as a convention in legislation because of the uncertainty that could generate. I shall not comment further in advance of the Supreme Court judgment except to say that regardless of the outcome, it will be essential for the Government to work closely with the devolved Administrations over Brexit, as they have undertaken to do, and for this Parliament to work with the devolved legislatures in providing appropriate scrutiny.
When the Supreme Court reaches its judgment, it may say that the royal prerogative is appropriate, or it may decide that Parliament must approve the triggering of Article 50. It may or may not decide the form of that approval, whether by legislation or by resolution; at present, we can only speculate. If by legislation, the Government may choose to present a short, tightly drawn Bill, or a longer one touching on aspects of the negotiation process. We do not know. Legislation would create greater certainty, particularly if it were to lead, as seems inevitable, to the subsequent displacement of existing primary legislation. We suggested in our report that it could be used to set some preconditions to the triggering of the article, as part of the UK’s “constitutional requirements”. However, the time for that has probably passed, and time is an important factor in the calculation.
It would certainly seem unwise to include in a Bill any terms that disclosed aspects of the Government’s negotiating position, thus weakening their hand in Brussels. A resolution, whether passed through the elected House alone or through both Houses, could prove a swifter process than a Bill, but its authority would be open to subsequent challenge. Separate Motions for a resolution would be needed in each House. They would be amendable and might therefore lead to different resolutions emerging. I believe it is essential that the invoking of Article 50, which triggers the implementation of the electorate’s decision, needs to be with the approval of both Houses of Parliament. Unlike a resolution, statute law trumps other forms of law, and that is what I support. I also understand that the Government have indicated that, if the earlier judgment is upheld, that is the course they are likely to take.
Whatever the outcome in the Supreme Court, and whatever form is used to invoke it, Article 50 need not affect the process and form of the subsequent negotiations. It starts the clock and that should be done in a clear-cut and concise way. Parliament’s involvement in the subsequent negotiations has already been underlined by my noble friend the Minister, and by others in government. The Constitution Committee, like many others in both Houses, stands ready to play its part in that process.
I now defer to my noble friend Lord Boswell of Aynho, whose Select Committee has already produced an admirable report on how Parliament should be more fully involved, and surely has a further vital role to play. I beg to move.
Lord Boswell of Aynho (Non-Afl)
My Lords, I am grateful to the noble Lord, Lord Lang of Monkton, for his eloquent introduction to the debate, and to his committee for its authoritative analysis of the important questions of domestic, constitutional and political principle that arise in relation to the issue of a notification under Article 50. We also await the judgment of the Supreme Court, and I shall not dwell further on Article 50.
What my committee’s report seeks to do, in contrast, is to give an appreciation and a structured outline of the whole Brexit process, and to identify the points within that process where parliamentary involvement will be required. We have broken the process down into four phases: a preparatory phase, in which we now find ourselves; a phase of formal negotiations in accordance with Article 50 of the EU treaty; the ratification phase, when Parliament will be asked to approve whatever agreement has been reached; and finally the implementation phase, when Parliament gives effect to the agreement in domestic law.
This is a logical sequence, but not necessarily a chronological one. In reality, these phases will have to overlap. Indeed, I welcome the Government’s intention to proceed with implementing key elements of withdrawal, by means of its great repeal Bill, in tandem with the negotiations. It is of course vital that once any agreement is ratified and takes effect, there be as seamless a transition as possible to a new legislative framework.
But these are all points of process; what really matters is the substance. What will Brexit actually mean for the people of this country and of the European Union? Will they, for example, be able to move freely within Europe in search of jobs? Will existing rights, whether of employment, property or residence, be respected? And what will Brexit mean for businesses? Will they be able to trade freely across borders? Will United Kingdom airlines be able to fly between European cities? Will EU fishermen continue to fish in UK waters? Will police forces still be able to extradite criminals to and from the European Union? The list of questions is almost endless and covers the whole bandwidth of government.
The EU Committee and its six specialist sub-committees are currently considering these questions. I warn noble Lords that we will be publishing a series of short reports in coming months, possibly as many as 20, covering what we see as the key issues—the ones that will most affect the prosperity and security of our nation and people in the years ahead.
The Government, of course, are asking these same questions as they prepare their own negotiating position ahead of triggering Article 50. But that is the rub. They are exploring all these vital questions largely in secret, and we all know next to nothing about the process whereby they are finalising their approach to the negotiations, let alone the goals they have set. Our report is a plea for effective, structured parliamentary scrutiny of the substance of Brexit. Too much is at stake for Brexit to be left to government alone, and for Parliament, as the seat of our democracy, to be restricted to providing a rubber stamp.
We have all heard Ministers’ refusal to offer a running commentary and their rejection of parliamentary micromanagement of the negotiations. With respect, these are Aunt Sallies. Nobody imagines that Parliament can itself conduct tough negotiations that will take place behind closed doors. However, if the Government do not expose their strategic thinking to scrutiny early in the process and embrace the opportunity of genuine dialogue with stakeholders within Parliament and beyond, they risk alienating those whose support they will ultimately have to rely on if the final agreement is to be implemented successfully. That is why in Chapter 2 of our report we conclude that “accountability after the fact” is simply inadequate, and it is why, in paragraph 35, we recommend that both Houses of Parliament,
“be given an opportunity to debate and approve the negotiating guidelines, at least in outline”.
That is absolutely fundamental to the legitimacy of the whole process. Incidentally, in my experience it would also be the expectation in most, if not all, other European Parliaments, were they to find themselves in this position.
Ministers have said in response that they cannot go into the negotiations with all their cards face up—they need to keep something back. There is of course an element of truth in that, but it is not always wise to clutch all your cards close to your chest. Occasionally, you need to play one to draw other cards out. In my view, the whole process of negotiation is one of creating a favourable atmosphere by gradually exposing your hand, and if, in doing that, you have the express endorsement of a sovereign Parliament at your back, you will be much stronger in your negotiating position.
So the Government need to strike a balance. They need to offer enough information to secure parliamentary and public buy-in, but not so much as to undermine their ability to negotiate in detail and to make the trade-offs that will certainly ultimately be needed. That is the theme of Chapter 5 of our report, on scrutiny of the negotiations. We feel that the negotiations cannot be a black box out of which an agreement magically emerges after two years. Parliament must be actively engaged in scrutiny throughout the process. That, I suggest, is why it is imperative that the House designate a specific committee to take the lead in scrutinising the negotiations. Only such a committee can provide the consistency and continuity of membership and staff to engage in sustained, thoughtful scrutiny over a period of at least two years, building up, one would hope, a relationship of trust with government, while of course respecting the confidentiality of sensitive information.
Some noble Lords may say, “Yes, but look at the number of debates we have been having on Brexit and at the number of Questions being tabled; surely more than enough is going on without appointing a committee to scrutinise Brexit”. But that misses the point. This House performs three key functions. It scrutinises legislation—and there is more than enough legislation coming down the track to keep this House and its legislative scrutiny committees busy. It is also properly a forum of public debate on major issues, and our debates, as this afternoon in the Chamber, perform a vital function in that regard. However, the House’s third core function is to scrutinise the Executive, and that scrutiny function needs different and distinctive structures.
The European Union Committee, which I chair, has scrutinised successive Governments’ policies towards the European Union, formerly the European Community, for the more than 40 years of our membership. It is not glamorous work. It is done largely by means of correspondence, supplemented by public and private meetings with Ministers and officials, and draws on the skills of highly expert Members and staff. It has teeth, thanks to the scrutiny reserve resolution. It works and it is still needed. It holds Ministers to account and acts as a vital discipline for officials, exposing and interrogating sloppy thinking, and it ensures that there is an audit trail for the many decisions taken by Ministers on our behalf in Brussels. Of course, it always leaves open the possibility that, on issues of major importance, it can make a report to the House and initiate a wider debate. That is what the House should aim for as we go into these negotiations: effective and sustained scrutiny conducted by a properly resourced and expert committee, drawing on the skills of Members and staff of the House, respecting the confidentiality of sensitive information and making reports to the House as appropriate on the key issues of principle that will undoubtedly arise, but with our emphasis throughout on fleetness of foot and flexibility rather than on covert obstructionism.
For such a scrutiny model to work, the Government will need to make a positive commitment to engaging with Parliament and to providing a steady stream of information to committees. The Secretary of State for Exiting the EU has already been helpful in indicating that Parliament will have equality of arms with the European Parliament in access to information relating to the negotiations. The noble Lord, Lord Bridges of Headley, has also been enormously courteous and generous in talking to Members across the House and listening to their concerns, and I would like to take this opportunity to express my personal thanks to him. But I hope he will agree with me that it is time now to focus our efforts on how we can all, working together, make a success of Brexit.
In conclusion, effective, engaged parliamentary scrutiny is not a threat to Brexit or the national decision. It is, or should be, the Government’s candid friend, and the best way to ensure an outcome that commands parliamentary and public support and that works to our benefit. I look forward to the debate and to the Minister’s response.
Lord Hunt of Wirral (Con)
My Lords, I declare my outside interests as set out in the register and in the fourth report of the Select Committee on the Constitution, of which I am a member. I join my noble friend Lord Lang of Monkton in commending this report warmly to the House. I pay particular tribute to our clerk, Antony Willott, and his entire team, all of whom did a first-class job, ensuring that we heard all the necessary evidence and marshalled our arguments effectively. The fourth report of the European Union Committee, which has just been introduced by the noble Lord, Lord Boswell of Aynho, is also an excellent piece of work.
The House does not need me to remind it that we are in extremely choppy waters and largely uncharted waters at that. In the run-up to the referendum it soon became abundantly clear that a substantial majority of parliamentarians in both Houses felt that it would be in the best interests of the United Kingdom to remain within the European Union, but the people of the country were not persuaded. Much has rightly been made of the fact that the referendum was technically consultative and not binding, but that was done deliberately and after much thought, and it was approved by Parliament. That was not an accident. It was done in my view not to empower Parliament to ignore the will of the people but to ensure that Parliament should continue to play a vital historical role in safeguarding the national interest whatever the result of the referendum.
I join my noble friend in quoting from paragraph 24 and the reference to how constitutionally inappropriate it would be for the Executive to act on an advisory referendum without explicit parliamentary approval. The big decision of whether to remain within the political institutions of the European Union was handed to the people of the United Kingdom, but it was never intended to change the fundamental nature of our delicate constitutional balance, which has evolved over centuries. Indeed, one of the most powerful arguments on the leave side was that we need a reassertion of the authority and role of the United Kingdom Parliament in our national life.
On 3 November the High Court issued its judgment on the so-called Brexit case, and I join my noble friend in regretting the rough and tumble that that judgment received in the press the following morning. As various Ministers have subsequently reaffirmed, a free and independent press is an important element of our way of life, but so too is an independent judiciary and it should never be unfairly traduced for doing its job when others have demanded that it should. For many of us, the coverage of that judgment was both unfair and personally unkind. The key part of the judgment is set out in paragraph 5 where the High Court said:
“It is agreed on all sides that this is a justiciable question which it is for the courts to decide. It deserves emphasis at the outset that the court in these proceedings is only dealing with a pure question of law. Nothing we say has any bearing on the question of the merits or demerits of a withdrawal by the United Kingdom from the European Union; nor does it have any bearing on government policy, because government policy is not law”.
That statement is accurate and it puts paid to any suspicion voiced by some that the High Court was actively and inappropriately engaged in seeking to extend its remit.
Even I believe, however, that this state of affairs is a matter of some regret. The Government and Parliament were more than capable of working this out for ourselves, as these two excellent reports demonstrate. There is no criticism of anyone in this, but the involvement of the courts is an unnecessary sideshow as we all seek to protect the best interests of the nation at a time of great uncertainty. In responding to that judgment the Secretary of State, David Davis, stated:
“To leave the European Union was the decision of the British people. It was taken after a 6:1 vote in this House to put that decision in their hands. As the Government told voters: ‘This is your decision. The government will implement what you decide’—no ifs, no buts. So there can be no going back; the point of no return was passed on 23 June”.—[Official Report, Commons, 7/11/16; col. 1255.]
Whatever my views were in the run-up to the referendum, I can only agree with and echo the Secretary of State’s words now. I also agreed with the crucial point made in another place by the Prime Minister on 24 October, when she said:
“The UK is leaving the EU, but we are not leaving Europe, and we are not turning our backs on our friends and allies”.—[Official Report, Commons, 24/10/16; col. 26.]
The question now therefore is how best to proceed and how best to ensure that the national interest is protected as we move forward to a future outside the structure of the European Union. Perhaps I am just cautious by nature but, so far as the interests of British business are concerned, I strongly feel that we in this place need to think long and hard about how to deal with the customs union and the single market—which I remind many of my colleagues on this side was largely the invention of a Conservative Government led by the late Margaret Thatcher.
As my declared interest, I disclose a long-standing connection with the world of financial services, particularly with insurance. I believe that the UK insurance and reinsurance sector is the jewel in our crown, bringing much-needed stability to businesses, individuals and families, and in times of crisis to the economy as a whole. I must tell this House that there is considerable concern in the insurance sector and the crucial broking community about the terms of our departure from the European Union. More than 2,750 UK insurance brokers passport out to the EU and more than 5,700 passport in. The UK is the leading general insurance market in Europe. Members of the Association of British Insurers wrote around £3.6 billion using EU branches last year. For us to maintain this position, many colleagues in the wider insurance sector have told me in no uncertain terms that it is vital that they should be able to continue trading freely in the European single market once we have left the EU.
That is why I hope that Ministers will seek to secure an agreement on transitional arrangements for financial services before that definitive new trading agreement with the EU is negotiated. It is unlikely that a reliable agreement on passporting arrangements could ever be agreed in a short, two-year period. I would go further: surely we now operate on a five-year cycle, so I urge my colleagues to do their best to persuade our partners to agree an extension to five years. That would also enable the British public to have their say in the customary manner on the negotiated outcome at the general election in 2020.
The calm, considered and informed discussions that are the hallmark of this place are inevitably very different from the trademark cacophony of a national referendum campaign. The advocates of different forms of Brexit may all claim a popular mandate for the particular outcome that they seek, but it is not true. For better or worse, we live in an age in which public confidence in politics and politicians is at an embarrassing all-time low. When we said in our report that there must be a role for Parliament in the process of triggering Article 50, we were not attempting to arrogate to ourselves the capacity to overturn the referendum. There is and must be no question of setting ourselves above the people. Sovereignty ultimately belongs to the people; they entrust it to us on a temporary basis only. This is not merely about the amour propre of parliamentarians. On the contrary, we are seeking the opportunity to prove how effective we can be in taking a mature and balanced view as we work to defend and promote the national interest in the challenging times ahead.
Baroness Suttie (LD)
My Lords, as the previous speakers have shown, there is a great deal of consensus in this House on the need for effective parliamentary scrutiny of the Brexit process. Both reports before us this afternoon are excellent, balanced and measured in their approach. In the EU Select Committee report, I highlight the conclusions contained in paragraph 35, which calls for both Houses to be given an opportunity to debate and approve the negotiating guidelines, and in paragraph 62, which calls on the Government to grant equivalent access to information to this Parliament as will be given to the European Parliament during the negotiations. Not to do so would, I believe, be politically unacceptable.
Sadly, we are living in an age when a balanced, rational and measured approach is viewed with deep suspicion by many of those who believe that we must quickly pursue a hard Brexit no matter what the cost to future generations, including a future generation who mostly did not vote to leave the European Union. As the noble Lord, Lord Lang of Monkton, said so powerfully, it is somewhat ironic that many of the same people who were calling for us to take back control during the referendum campaign and return decision-making to the British Parliament and the British courts are now strangely reluctant to allow the British Parliament to scrutinise the Brexit process effectively and have publicly criticised our valuable independent judiciary.
I will briefly tackle three subjects in my remarks this afternoon: the benefits of parliamentary scrutiny, the role of the devolved Administrations in parliamentary scrutiny, and the impact of our current UK debate on the Brussels side of the negotiations.
The Government regularly state that they will listen closely to the views of Parliament but that they will not give “a running commentary” on the state of the negotiations. However, does the Minister acknowledge that in the negotiations on the Maastricht treaty in 1991 under a Conservative Government, a Motion was brought before the House on the negotiating strategy? Moreover, in 1996, on the Amsterdam treaty, the then Conservative Government published a White Paper clearly setting out their negotiating strategy in considerable detail, which was then followed up in a debate in Parliament.
Brexit is an unprecedented challenge to this country and the impact of the decisions that we take in the next few months will be felt for generations to come. As the report from the Constitution Committee states, it is unfortunate that:
“The triggering of Article 50 has become, in many people’s eyes, a symbol of Government and Parliament’s decision to accept the referendum result”.
Parliamentary debate and scrutiny offers the Government a chance to reframe their position in a much more positive direction. Surely, shining a light into what our future will look like strengthens rather than weakens the decision-making process.
I went to Brussels a couple of weeks ago to gauge the mood post-referendum. Having worked for 10 years in the European Parliament in Brussels, I know that it is a transactional place where deals are done based on a complex mixture of relationships, enlightened self-interest and a genuine belief in the importance of maintaining the rules of the club. In the conversations I had with senior former colleagues they acknowledged that they need British trade but they believe that they can find that trade elsewhere, if necessary, if we insist on going outside the rules. It is also clear that the strident messages coming from this side of the channel are really testing their patience. In such a climate, there is very little appetite to accommodate demands for an à la carte solution.
As a Scot now living in Broadstairs on the Isle of Thanet—where Mr Farage stood at the last election—I believe that I have been exposed to the post-referendum emotions following the very different results in the different parts of the UK. Both now feel equally strongly that their point of view should be respected: Scotland voted 62% to remain and Thanet voted 64% to leave. I am sure that I do not need to stress the strength of feeling in Scotland and in the Scottish Parliament on this matter, but as someone who was firmly against Scottish independence I believe the road ahead needs to be treated with the utmost care.
Northern Ireland also voted to remain and the complexities of maintaining the Good Friday agreement once the UK is no longer in the EU are not to be underestimated. The involvement of the devolved Administrations in the Supreme Court decision early next month makes an already complex situation very much more so, as other noble Lords have said. Can the Minister spell out in more detail how the devolved Administrations will be consulted and involved in drawing up the negotiating framework and what he understands to be the constitutional arrangements should any devolved Parliament or Assembly vote against triggering Article 50?
In conclusion, I believe it is in the country’s as well as the Government’s own best interest to allow Parliament to have its say both on triggering Article 50 and on the negotiating mandate which will have such a profound impact on the future of this country.
Lord Kerr of Kinlochard (CB)
It is a pleasure to follow the noble Baroness, Lady Suttie, who knows a great deal about EU matters. It is also a pleasure to speak in the debate on two such admirable reports.
I do not intend to say much about the Article 50 report now, because the issue is with the Supreme Court. I merely mention two developments that have occurred since the Constitution Committee finished its excellent report. First, on 13 October, the President of the European Council, Mr Tusk, confirmed that a notification under Article 50 was not irrevocable, thus confirming the view taken at the time Article 50 was drafted by the leading legal adviser to the European Council. Of course, it is not the case that such a withdrawal could be lightly done or would be lightly received; there could well be a political price to pay. The point is simply that, in EU law, the institutions believe that it is possible to withdraw one’s notification.
Secondly, there is what the No. 10 spokesman said immediately after the High Court ruling:
“Government lawyers … made clear … that, as a matter of firm policy, notification of withdrawal will not be withdrawn”.
I am no lawyer, but as I read “a matter of firm policy”, implicitly the government spokesman was conceding that, legally, it could be withdrawn. However, the Supreme Court is about to speak on this.
I very much agree with the thrust of the report from the Constitution Committee, in particular with paragraph 43 that it would be,
“constitutionally appropriate that the assent of both Houses be sought for the triggering of Article 50”.
That seems the key point. Whichever route is chosen, whether it is an Act of Parliament or a resolution of both Houses, will presumably be settled by the Supreme Court. I am confident that, if the Supreme Court decides that the Government are correct and an Act of Parliament is not required, the Government will nevertheless submit a resolution, which will proceed through both Houses. I am confident of that because I cannot see any downside in it. The Government must be aware that this House and the other place would pass such a resolution by a large majority, for the reasons given by the noble Lords, Lord Hunt and Lord Lang. It is not possible to decide after the referendum that it produced the wrong result—the result is the result is the result—so there is no doubt that, for many of us with a heavy heart, the resolution would be carried.
I therefore rather agree with the noble Lord, Lord Hunt, that the Supreme Court case is a bit of a distraction and side issue. It seems that we are going to be given a vote. I also believe that that is correct because, in the end, the Government are bound to see that it is right to have a full debate on what kind of Brexit they intend to seek. The referendum, as the report of the committee chaired by the noble Lord, Lord Lang, pointed out, does not tell us that. The referendum answered a binary question, but it did not tell us what kind of Brexit we should be going for. That is what we now need to consider.
I agree with paragraph 6 of the Constitution Committee’s report, that the issue is,
“where among the range of potential outcomes the final settlement by which the UK leaves the EU will be made”.
I add only that Article 50 is clear that we cannot dictate the terms of our own departure; the 27 will also have their view. What is important for us now, however, is that the Government should be open and honest with the country about the terms they will propose when they trigger Article 50.
Up to now, that is not happening. Our debates in this Chamber are extremely well informed and have all the public resonance of one hand clapping. Anyone who as a child has played solitary tennis against a brick wall knows that the wall is better than the hedge. If you hit the hedge, nothing comes back. That is the nature of our debates. I have the highest regard for the noble Lord, Lord Bridges of Headley, but I hope that today he will prove to be a brick rather than a privet.
I agree with all of the report from the committee chaired by the noble Lord, Lord Boswell, but what struck me most was the astonishing quotation in paragraph 28, from the Secretary of State for leaving the EU—I refuse to say “Exiting”; it is not a verb. Mr Davis is quoted as saying:
“Before Article 50 is triggered, there will be a frustrating time, because we will not say an awful lot. We will say a bit; we will lay out guidelines but, as the Prime Minister said, we will not give a running commentary on it, because that would undermine our initial negotiating stance from the beginning”.
I find that really hard to construe. Our initial negotiating stance will not be a secret from the foreigners for very long, because when we say it, they will hear it. How could it be undermined by being presented to the people and Parliament in advance? Would it not be strengthened? Would the Government’s negotiating hand not be rather stronger if they could point to the fact that the country, and Parliament, was with them, had heard them and supported, or did not dissent from, what they were trying to do?
If, as I suspect, the real reason is that the Government are in some difficulty in deciding exactly what their initial negotiating stance is to be—perhaps because the Foreign Secretary has failed to convince his colleagues that it is possible to have one’s cake and eat it for all the dossiers—might it not help the Government to decide what they should ask for, if there were an informed public debate about just that?
So, in my view, we need a Green Paper now. In my view, Mr Davis was absolutely right when he first spoke of a White Paper. I am sure that we need a White Paper and am pretty confident that we will get one, although I worry that we may get it rather late in the day. Ominously, he has gone a little quiet about the White Paper. I think that we need a Green Paper first. It would not directly concern the triggering of Article 50, nor what is going to happen, and nor would it directly concern the Article 50 negotiation as such. It should concern the framework for the future relationship between us and the Union that we left.
To quote from paragraph 2 of Article 50, the negotiators are required before they complete the Article 50 negotiation—which is the divorce negotiation—to take,
“account of the framework for … future relationship”.
A Green Paper could be a first draft of our prospectus, or proposals, for what that framework should be, and it would set out facts and options. A White Paper would be harder and would come closer to the time of the negotiation, but a Green Paper could explain to the country—which, frankly, does not know—what membership and non-membership of the customs union, and what membership and non-membership of the single market, actually mean.
What did the Prime Minister mean when she said in relation to a customs union that it was not a binary choice? I am not sure quite what she meant because it is, on the face of it, a binary choice, although some exclusions might be possible. I am not sure that it would be compatible with WTO rules to be members of the customs union only for certain goods—perhaps, for example, motor cars. I suspect that would not be possible.
I am not sure quite what assurances we can have offered to Nissan, therefore, or what assurances we could offer to Northern Ireland and the Republic in relation to the border between them, if we leave the customs union. But I think that the country is as ignorant as I am about this, and I think that the Government should come clean before they make up their mind. The Government should be telling the country what the choices are and what the upsides and downsides are of the various options. I know that the Foreign Secretary and Dr Fox believe that we must leave the customs union. I can understand that—for Dr Fox, it must be an existential issue—but it seems to me that it is not absolutely clear where Mrs May stands. Perhaps before she makes up her mind, she might like to see parliamentary debate on the basis of a Green Paper.
Is it the Government’s view that we could, or perhaps should, leave the EU but retain partial sectoral membership of the single market? Sometimes, that seems to be the Chancellor of the Exchequer’s view. We might remain members of the single market in financial services, for example. For myself, I am not sure whether our partners across the channel would be willing to see such cherry picking, particularly in the light of the Prime Minister’s Birmingham speech rejecting any role in this country for the Court of Justice or for regulation written in Brussels. Could we stay on the field, carrying on playing but bringing our own referee and playing to our own rules? I am not sure. That could be a tricky negotiation.
It follows that I am not really sure what soft Brexit means. I am not sure that there is a feasible soft Brexit; I fear that may be wishful thinking. Mr Tusk said on 13 October that the choice is “hard Brexit” or “no Brexit”. I would like to think that we were looking for smart Brexit, which might mean a phased Brexit. In my view, it is not essential that everything happens at precisely the same time. It could be that timetables had different dates for different events.
Yesterday, we saw Mrs May assuring the CBI that she understood the need to avoid a cliff edge, and the commentators all interpreted that as meaning that some kind of transitional, temporary or interim deal would be required. Yes, I see the argument, but I have difficulty with it. Building a bridge requires clarity about where you want to be on the other side. It is difficult to envisage concessions for an interim arrangement that would not be accepted in a permanent arrangement. One needs to have a degree of clarity, and agreed clarity, about where one is heading—which brings us back to the framework for the future relationship. That is where we should concentrate now.
I would say that there are elements of that framework that it would be possible for the UK to signal its thinking on right now. For example, I believe that the Prime Minister’s Home Office experience will lead her to think that continuing close co-operation with the EU that we left on issues such as terrorism, drugs, crime and people trafficking is a good thing, and that an institutional arrangement for such co-operation would be desirable in the UK interest. I believe that would also be seen as desirable by the 27 in their interest.
Secondly, I believe that the Foreign Secretary will by now have realised that it is not really wise to boycott EU meetings if one thinks they might come up with the wrong answers. If one thinks that, the thing to do is to go and make sure that they do not. That is his job. I suspect that he will come to understand that working closely with EU partners—in future, former EU partners—will remain important to British foreign policy after Brexit. Could not our draft of the foreign policy pillar of the future framework be written on precisely that principle and say just that? We will want arrangements for co-ordination on foreign policy, security policy, exchange of intelligence and action on sanctions in future. I believe that will be our position. It probably is our position now, although we have not said so yet to anyone.
Thirdly, I believe that the Government are probably listening to the research community and the universities. I believe the Government probably think that they will, in the end, propose an arrangement whereby we contribute financially to, and receive support from, the EU research programmes, and the networks survive. I think that will be the Government’s position. I suspect that, privately, it is their position now. I do not see any downside in making clear that that would be where we would want to be in a framework negotiation.
It could be argued that to offer positive proposals at this stage for the future framework would give away our negotiating capital. That is nonsense. Much of the Article 50 negotiation—the money negotiation—will be a rough, zero-sum negotiation, but most of the framework negotiation will not be. In the framework negotiation, one will be talking about common interests, mutual interests, and will be trying to define the right future structures for pursuing these interests.
I believe that highlighting these themes now would bring benefits, not costs. In fact, I think it is becoming very urgent to do so. As the noble Baroness, Lady Suttie, said, the atmosphere in Brussels is not good and is getting worse. The Birmingham speeches, the sense that the Government are talking only to themselves, making policy in an echo chamber, the gratuitous insults from the Foreign Secretary, the random pronouncements of various Ministers, usually immediately followed by a slap down from No. 10, leave our friends—and we still have some friends in Brussels—close to despairing. They fear that there is no plan, and that when one emerges it may be rather unrealistic. They see a growing risk that the Article 50 negotiation will fail, and we will go over the cliff edge into legal chaos.
I think this is probably exaggerated, and some of these concerns could be met and would be met if the Government were to present at least a partial prospectus setting out aspects of the future relationship that they would like to see. I believe that on some aspects—I gave three candidates—they could agree now on what it is they want and there would be no downside to coming clean about it. As the noble Lord, Lord Hunt, said, Mrs May has said that, when we leave the EU, we will not be leaving Europe. Excellent. Could we not define and explain what we mean by “not leaving Europe”? That would counter the stuff in the press here that is so widely read in Brussels.
I think that a smart Brexit is not impossible, but it needs smart preparation, and I am not sure it is getting it now. Smart preparation means beginning a new, real dialogue with Parliament. The determination of precisely what kind of Brexit the country wants must entail a role for Parliament. It means being smart about the signals we send across the channel—smarter than we are being right now.
Lord MacGregor of Pulham Market (Con)
My Lords, it is a great pleasure and a daunting experience to follow the noble Lord, Lord Kerr of Kinlochard, whose knowledge of the practical working details of the Community and of the whole area is more or less unrivalled. It is very helpful to all of us to have his views and experience.
My own direct experience of the EU is dated—to the 1980s and early 1990s—and limited: it was when I was at MAFF and then Secretary of State for Transport. I have to say that sometimes I felt my MAFF experience meant that the former was a full-time Brussels commitment. I have many memories of the difficulties but also of the opportunities that arise. The noble Lord, Lord Kerr, and other noble Lords steeped in EU work have particular knowledge of EU negotiations, and not least the timescale and intensity of what we now face, of which I believe our fellow countrymen are totally unaware. That is a theme that I want to come back to.
Here I follow my noble friends Lord Lang and Lord Hunt: the almost hysterical reaction from some of the media and elsewhere to the recent High Court judgment, with headlines like “The Judges Versus the People” and “Enemies of the People”, to quote but two, was ill-judged, unfair and uncalled-for. The judges were not expressing a political view about withdrawal from the EU but simply stating that such a withdrawal requires parliamentary approval in the form not of a vote but of a statute. I quote:
“Parliament having taken the major step of switching on the direct effect of EU law in the national legal system by passing the European Communities Act 1972 as primary legislation, it is not plausible to suppose that it intended that the Crown should be able by its own unilateral action under its prerogative powers to switch it off again”.
In other words, far from undermining the people and presuming more powers for themselves, the judges were actually performing their proper constitutional role and upholding the supremacy and powers of Parliament itself.
The judges were not the only ones to make this point; as my noble friend Lord Lang pointed out, our own Select Committee, of which I am a member, in its report on the working of Article 50 published in September, before the High Court hearing, concluded that,
“an Act could make clear that Parliament had given its authority to the Government to start a process that might well lead to existing legislation being repealed or substantially amended,”
and that any Act of Parliament would ensure that any constitutional uncertainties were avoided. That is an important point that we made. So I believe the judges were completely justified in the position that they took. I emphasise the vital role of both Houses in all these matters—and that is what we were endeavouring to make clear in our report.
I turn to the EU Committee’s excellent report on The Process of Withdrawing from the European Union. One needs only to dip into it to see how tortuous and complex the negotiations will be. I have two questions for the Minister arising from the report. First, conclusion 15 on page 5 states:
“There is nothing in Article 50 formally to prevent a Member State from reversing its decision to withdraw in the course of the withdrawal negotiations”.
I ask the Minister: is that a possibility and what will the terms be?
Paragraph 30 of the report states:
“One of the most important aspects of the withdrawal negotiations would be determining the acquired rights of the two million or so UK citizens living in other Member States, and equally of EU citizens living in the UK”.
The report describes this as a “complex and daunting task”. The Minister will know that this is already causing great concern to many such citizens. Can he give us any information as to the progress on this matter and some consolation to those concerned?
The comments of Sir David Edward and Professor Derrick Wyatt in paragraphs 31 to 60 make compelling reading. One little practical point resonated with me, when they were referring to the difficulty of some of the negotiations. They took as an example member states that would have interests other than those absolutely being discussed in the Council at the time. Professor Wyatt said:
“If I am a hypothetical east European country, with a very obvious and genuine interest in both the position of my nationals resident in the United Kingdom and the future access of the UK, I might not be interested in fisheries as such but I might want to block a deal on fisheries unless I get what I want on transition and future access for my nationals”.
That is just one simple example of where all the complexities will arise.
In comments in chapter 5 about the length of the negotiations, Sir David said:
“The long-term ghastliness of the legal complications is almost unimaginable”.
There is another clear example of the complexities of the negotiations. I do not envy the negotiators.
In paragraph 54, the committee, referring to its evidence, concludes:
“No firm prediction can be made as to how long the negotiations on withdrawal and a new relationship would take if the UK were to vote to leave the EU. It is clear, though, that they would take several years—trade deals between the EU and non-EU States have taken between four and nine years on average”.
The report continues:
“It would be in the interests of the UK and its citizens, and in the interests of the remaining Member States and their citizens, to achieve a negotiated settlement. This would almost certainly necessitate extending the negotiating period beyond the two years provided for in Article 50”.
I think we all recognise that it is likely to be extended beyond the two-year period, but it is the implications for further trade deals and so on that I do not believe that the British public are yet aware of.
It would be in the Government’s interest to prepare the public for a long haul. I have not even had time to comment on the role of the European Parliament, wider international trade negotiations and so on. They, too, are self-evident but are not being talked about by the public as a whole.
In conclusion, the committee’s report on the process of withdrawing from the European Union deserves the widest possible circulation. I do not think that the complexities and timescale of the forthcoming negotiations have yet begun to sink into the public consciousness.
Lord Teverson (LD)
My Lords, there have been few times in recent decades when there have been more divisive issues within the United Kingdom. The start of the 1980s and the miners’ strike was perhaps equal to it, but the EU referendum that we have all passed through was a time of great division within our country. It was a time when people were unable to judge what was truth and what was not, and I think the voters generally assumed that everything that they were being told was not the truth. There was a divide between younger and older people; certainly, my own two daughters were left far more desolate by the result of the European referendum than I was. There was a division between those who live the metropolitan life and those outside. There was division between the four nations of our country, with a different result in Scotland and Northern Ireland from that in Wales and England. I suspect that in Northern Ireland there was a hardening of community relations as a result of the referendum.
So there is a great division in our country and one that needs to be healed. Those in favour of Brexit, who won that referendum, often remind us that there have never been a larger electorate than those who voted for withdrawal from the European Union. It was a decisive result. On the other hand, I could say that more people never voted against something, in terms of the 16 million who voted for remaining within the European Union. There is a huge challenge in trying to bring this country together following that momentous decision. It seems to me—and I say this in a non-partisan way—that the way in which the Prime Minister and the Government are currently approaching this is to seed further division rather than building bridges to mend those divisions.
One of the ways in which the Government could start to put that right and make the 16 million people who voted the other way feel slightly more valued than they are at the moment is to involve a much wider community in terms of how this nation moves forward. It seems obvious that the most important way to do that is through Parliament and to use debates and propositions to Parliament to communicate far more widely and use it as an amplification to our electors and citizens more broadly. That is a fundamental role of Parliament and such an easy way in which the Government could start to find a way of healing. We could all collectively, not just in Parliament but more broadly, find a consensus—as much as we can find consensus—or a smart way to move forward from where we are at the moment. My sincere feeling is that the Government cannot get through this process all the way that they need without having that consultation and much broader conversation, and taking them seriously rather than just listening and giving no feedback what ever, as the noble Lord, Lord Kerr, said so well. That is fundamental to the parliamentary role. It is about healing the nation rather than just the fact of the constitutional position of a parliamentary democracy.
The other area is around tone; again the noble Lord, Lord Kerr, said something on this. We have had a number of interesting meetings and evidence sessions within the European Union Committee, led and chaired by the noble Lord, Lord Boswell. One of the most interesting was when we undertook our Irish inquiry. We were very privileged as a committee, and indeed, as a Parliament, to have two former Taoiseachs come before us—Bertie Ahern and John Bruton. They are both very well-regarded statesmen within Europe. One of the questions I asked was: “If you were advising the British Government, what advice would you give them in terms of negotiations towards Brexit?”. John Bruton came back very quickly and said very firmly that the most important thing is for the British Government to argue a common cause of not just what is good for the United Kingdom but what is good for Europe as well. Yet I do not sense that tone in the conversations, or the lack of conversations, that the United Kingdom is having at the moment with our allies and—to-be-former—fellow member states in Europe.
That has not been helped, whether by the Foreign Secretary deciding not to turn up at a meeting of European Foreign Ministers to talk about the President-Elect of the United States, who he has already insulted—I agreed with his earlier comments—by the Secretary of State for Brexit describing Guy Verhofstadt, the negotiator for the European Parliament, a key institution in this, as Satan; or by the Prime Minister understandably, but wrongly, sounding aggressive and standing up for the United Kingdom in the typical way at a Conservative Party conference. None of these things helps the national interest at all.
In terms of tone, it is a question of who the Government speak to. I think it was the Foreign Secretary—it was certainly one of the Secretaries of State—who talked to a Czech newspaper and gave far more information about the future negotiations than had been given to ourselves or the British press. Nobody in this House knows the details of the Nissan deal whatever. That all shows that the Government are not trying to be inclusive, show a way forward and bring the nation together. The tone is around individual conversations, excluding everybody else.
The last thing I will say echoes the comments of many other Members of this House. The Government need to get real. I say that with respect, because the task that the Prime Minister has is one of the most difficult that any British Prime Minister has ever faced in modern times: how to extricate ourselves from the European Union. However, they have to come forward to Parliament and therefore to the nation with what their negotiating position will be. The opposition on the other side of the table will know that proposition as soon as we present it. Let us have a White Paper or a Green Paper to make sure that we are fully involved in that. If we do not undertake that exercise, do not include Parliament and with it the rest of the nation and the 16 million who voted for remain, as well as the 17 million who voted for Brexit, this will continue to be a very divisive process and one that will fail. That will not be in the national interest.
Lord Higgins (Con)
My Lords, we should be immensely grateful to the chairmen of the committees, who have presented two reports of considerable importance given the general confusion about what is going on following the referendum result. It is interesting that the House of Lords is taking the lead in providing such reports. I hope they are regarded as obligatory reading in another place and that the Library, which has been producing excellent information, will ensure that it is reflected in the other Library. I also hope that as things progress, the various Select Committees of both Houses—particularly the departmental ones in the other place—make a considerable contribution.
Those of us who sat through debates on the Bill that set up the referendum will be only too aware that it was an advisory referendum. That is an important point to stress but, as my noble friend who opened the debate pointed out, it was against the background of considerable political commitment to implement whatever the referendum produced.
We ought to spend a moment considering the whole issue of referendums, because one thing has emerged clearly from both the Scottish and EU referendums: they can be immensely divisive, and so they proved to be. They show clear divisions of opinion and create a situation in which it is easy for the public to be lied to and misled. I think that happened to a very significant extent in the referendum on our European Union membership.
I personally have always been totally opposed to referendums. They are often said to be democratic. However, they are not democratic in the sense in which that is usually meant in this country. We have a representative parliamentary system of democracy but the reality is—I think this is increasingly apparent—that that can come into conflict with a referendum result. There is a huge difference between those two situations. A referendum takes a very generalised approach and is open to a lot of confusion, whereas in a parliamentary democracy the Houses of Parliament can take into account all the arguments in great depth and detail, subject them to scrutiny and make sure that minorities’ interests are taken into account. It is absolutely clear that the referendum we have just had is effectively the dictatorship of a majority. That is something we ought to be concerned about.
We should be grateful for the very clear statement on this issue in the Constitution Committee’s report, which points out:
“The legislation that enabled the EU referendum did not set out how the result would be implemented … Parliament may wish, in future, to ensure that detailed consideration is given to how the result of any referendum will be implemented in advance of the vote … occurring, and … whether explicit provision should be made in the enabling legislation … to implement the outcome … or … instruct the Government”,
on how they should act. After the in some ways rather sordid events of the last referendum, we must sit back and decide whether we want to go along the referendum route at all. If we never have another referendum, I, for one, would not be upset.
On the more detailed provisions, the Government’s reaction has been to treat—
Lord Robathan (Con)
If there were to be another referendum, which side does my noble friend think would win? Contrary to what is written in some newspapers, a lot of people say to me, “I voted remain but actually, I am delighted with the result and I am working towards a very good end for Brexit”.
Lord Higgins
Since I am not in favour of any more referendums, that question does not arise. However, I certainly do not think we can go on having a continuous series of referendums in which we decide whether the result of the previous one was right or not. That would not be a very satisfactory situation.
I find the Government’s attitude somewhat puzzling. I do not understand why the Prime Minister seems so determined not to allow Parliament to play a role, to the extent that the matter was submitted to the courts. Surely we want an element of co-operation now, which I hope we will have. None the less, the Prime Minister has seemed very reluctant to have any parliamentary involvement if she can possibly avoid it. It is worth mentioning a specific point regarding the courts. In an earlier report the Select Committee took the view that the decision to implement Article 50 could be reviewed in the course of the two-year period. At the end of the two years, what has been negotiated might well be clearly less favourable than the situation pre-Brexit, and we will want to change our minds. The Select Committee’s previous report said that it was clear that we would be able to change our minds. In considering this matter the court took a common ground between the two sides before it, but it is still rather undecided. I hope that when the Supreme Court considers the matter further, it will be made clear whether we can change our mind during the two-year period.
Finally, on the way the negotiations are to be conducted, the summary of the European Union Committee’s report makes it clear that:
“It is inconceivable that these negotiations should be conducted by the Government without active parliamentary scrutiny”.
The report then looks at the various ways that might take place and suggests a middle course whereby Parliament is involved and there is interchange between the Government and Parliament. The paragraphs I have referred to and the summary effectively set out a shopping list of the information Parliament ought to have during the negotiations. There is a good shopping list on page 3 of the report. I hope the Minister can confirm that that is an appropriate way for us to proceed and that the Government will ensure that, while we will not have a running commentary, Parliament will none the less participate to a considerable extent throughout this process until we are able to reach a final decision. At that stage, Parliament will need to decide whether the deal that has been struck is better than the situation we had before Brexit.
The Earl of Kinnoull (CB)
My Lords, it is a pleasure to follow the noble Lord—as ever, logic and common sense ran throughout his remarks. I declare my interests as set out in the register of the House and in particular as a member of the European Union Select Committee. I also add my thanks to our chief clerk, the very excellent Chris Johnson, and his clerking staff for their work. It was a short and intense inquiry and drawing together the many strands into a cogent report was a testing task, and he did it very well. I also pay warm tribute to our chairman, the noble Lord, Lord Boswell, ever the provider of a bon mot in our long meetings.
In what is an incisive report, the Constitution Committee has yet again tackled a complex issue with great clarity and admirable brevity. I certainly found it very helpful. The conclusion of the report, in its final paragraph, notes:
“Parliament and the Government should, at this early stage, take the opportunity to establish their respective roles and how they will work together during the negotiation process”.
The all-consuming national conversation that is Brexit has a common single theme, and that is, in various forms, a demand for clarity. There is of course a wide understanding that one cannot have clarity where such clarity would be damaging to the United Kingdom’s interests, or where it is not reasonable to feel that clarity can yet exist. However, it is hard for this House to hold the Government to account properly on the matter of clarity when we ourselves are unclear as to how we will scrutinise Brexit.
The framework for our scrutiny is a matter for the House, and I know we all agree that we need to move quickly to establish that. The European Union Select Committee report, in chapter 9, “Internal arrangements”, addresses how this clarity might be achieved. As a star-studded cast—the noble Lords, Lord Kerr and Lord Boswell, and the noble Baroness, Lady Suttie—has said, I stress that good scrutiny is a great help to the Government and to the nation, endorsing good outcomes, analysing tough situations, and using the knowledge and experience that is to be found in the Select Committees greatly to help and guide negotiations.
In our report, at paragraph 98, the committee states:
“we reiterate the recommendation in our July 2016 report, that the House of Lords can best contribute to effective parliamentary oversight of the negotiations by also charging a specific Select Committee with explicit responsibility for scrutinising the negotiations”.
I feel that Select Committee should, and must, be the European Union Select Committee. This is not a sort of land grab; it is simply a practical point. I make it with two important provisos, which I will come to in a second.
There are 25 members of professional staff in the European Union Select Committee structure. Members of this House who are part of that structure comprise nearly 10% of the House. I am told that former members comprise another nearly 10%. In short, the committee and its sub-committees are a deep repository of experience and knowledge and have the resources to be effective right away. I have a great fear of an “all new” structure as, in my long experience, “all new” structures take time to bed in, take time to mature and would be unlikely to “hit the deck running”. This option, to my mind, would be most unwise for our House to follow.
I turn now to my provisos. To make sure we do not trip over each other, I feel, first, that the committee should have a regular interaction with the Liaison Committee on a formal basis. Secondly, there should be a regular and formal interaction with the chairmen of all the standing committees of the House. After all, it is important that we use the full resources of the House on Brexit matters. I certainly accept that the other committees must be part of the scrutiny process and continue to undertake inquiries that, through this structure, will be carried out in a co-ordinated fashion. I believe this, or a similar framework, would give satisfactory clarity as to how the Lords will conduct Brexit scrutiny. To go back to what I first said, I think we can then justifiably hold the Government to account for lack of clarity on their side.
Regarding clarity about what access to information the scrutiny function has, this is unclear as well. However, we have been much helped by the words of David Davis, to which the noble Lord, Lord Boswell, referred earlier. I shall quote them in full; they are very brief:
“We will certainly match and, hopefully, improve on what the European Parliament sees”.
Indeed, laid out in box 1 of chapter 5 of our report is what the European Parliament is meant to see. This is therefore what will be available, and I feel it should be available, although I feel that “data room” rules should apply to all Members who access “data room” information. In other words, that would mean a confidentiality agreement, which I suspect would not be dissimilar to the Official Secrets Act regime of the Intelligence and Security Committee of Parliament.
In summary, for scrutiny I would ask for framework clarity as soon as possible and urge the Leader of the House, the Senior Deputy Speaker and appropriate others, including the chairmen of the Select Committees, to agree on a framework very rapidly and bring proposals forward to the House for adoption. Clarity on access to information can follow on afterwards as it will need the consent of government. At the end of my first, rather long, point, I would like to ask the Minister: does he agree that clarity on Lords’ scrutiny on Brexit would be helpful from the UK’s and the Government’s perspective?
So much for scrutiny; I now turn to my second, final and much shorter theme, which is communication. Being in the privileged position that I am on the EU Select Committee, I am more than aware that a lot of commendable government Brexit work is going on. This is augmented, in my case, by various private briefings from City sectors, and I would like to associate myself with the words of the noble Lord, Lord Hunt. I come from an underwriting background, and I think it would be a great pity if the underwriting excellence and “world-leading-ness” of the London market were to be damaged in any way by the Brexit process. I am very grateful for the chat that I have already had with the Minister on that point. Of course, briefings from the private sector come from everyone on the planet. I find that it does not matter whether it is a taxi driver or a very senior person on a board; they all want to talk about it and give their view.
I am struck that the media seem entirely to lack understanding and certainly promote a lack of understanding among the public, and I think that this should be addressed at a very early stage. The Scottish Government reportedly have more than 40 professional staff whose sole aim is to put out their message by and in the media and directly to the people. I do not know how many communications staff there are in the department for Brexit at the moment but, as I listened to the noble Lord, Lord Kerr, talk about smart Brexit, I thought, “Gosh, that needs to be put out to the public, because it is a very appealing thought”. However, I suspect that there are not nearly enough people in the department to do that at the moment. Accordingly, I urge the Government desperately greatly to beef up their Brexit communications function in numbers of people and capability, and I close by asking the Minister to comment on that thought.
Lord Inglewood (Con)
My Lords, at the outset, I join those who have commended the work of the two committees and their chairmen, and say that I share the general thrust of what has been said hitherto in the debate. Secondly, as someone who until just the other day was the chairman of a newspaper company—albeit a local newspaper company—I join in the comments about the treatment by certain newspapers of the High Court judges. It seems to me that they completely failed the test of fairness in that there was no evidence to justify what was said.
Our joining of the EU in the 1970s and, now, our withdrawal are events that amount to a constitutional revolution and are sui generis. We need to recognise that quite separately from the political issues and other merits involved, and I do not intend to discuss them this afternoon.
The referendum vote in June was, on the surface, a binary choice—but, of course, it was not really that, as a number of us pointed out before the referendum. The decision to leave opens up numerous possibilities and poses many more questions than it answers. The Prime Minister has told us that Brexit means Brexit. On one level that is absolutely correct and on another it is completely meaningless, but perhaps most usefully it simply describes the consequences of a majority of voters voting to leave the European Union. That means that we now have to take decisions about a series of options, which range from so-called soft Brexit to so-called hard Brexit—and there seems to be absolutely no consensus about that. To put it another way, our relationship with the European Union might range anywhere from that enjoyed by Norway and Switzerland to that of North Korea. All are within the compass and definition of Brexit.
Against this background, what should the Government do and what should Parliament do? It seems to me that the Government’s response is essentially their own affair within the constraints of the law and of politics. However, the position of Parliament is perhaps less clear, as nothing quite like this has ever been done before. On top of that, we no longer live in a world where there is a complete demarcation between home and abroad—as was the case, for example, 100 years ago, when ambassadors were plenipotentiaries, whereas now they appear to be salesmen.
The reality is that in a politically and economically interdependent world it is not possible to decouple from abroad unilaterally. The process through which this country is now going will have huge repercussions domestically—politically and economically—and diplomatically, and Parliament has to engage directly with these matters. We are not, as the noble Lord, Lord Kerr, said in his evidence to the Constitution Committee, withdrawing from some relatively small international treaty. It is generally accepted that this is a once-in-a-generation, or even a once-in-a-century, change which is likely to have a far greater and more long-lasting impact than, for example, the result of any general election.
As has already been said, in the recent Brexit/Miller case in the High Court, it was ruled that Article 50 cannot be triggered without parliamentary approval. I believe that a process of proper parliamentary scrutiny and accountability should be attached to any grant of approval that might be given. On the other hand, were the Supreme Court on appeal to set that aside, I still think that Parliament should insist on political involvement, not least because leaving the EU and the terms of so doing will, as my noble friend Lord Gardiner said in his remarks just before this debate began, set the framework for the great repeal Bill. The only realistic way for Parliament to play a full role in scrutinising and dealing with any possible great repeal Bill is to get involved in the process of withdrawal. The Government have offered consultation, and of course that is welcome—but it is insufficient in the way it has been put forward.
From my perspective, it seems that there are three parts to this. The first is that before Article 50 is served, Parliament should be given a clear indication of the journey of travel posed and the generality of the type of Brexit sought. It does not seem to me to matter what colour paper that may be, but we need to get the evidence. Apart from anything else, I am sure it is inconceivable that the Government would go into these negotiations aiming to fly blind. This might, by analogy—although the comparison should not be stretched too far—be a bit like the Long Title of a Bill.
Secondly, it is agreed that, once discussions are under way, there should be scrutiny by committees. That of course seems sensible. In addition, I believe that there should be, from time to time, regular but not too frequent full debates on the Floor of the House. I say that because a number of Members of your Lordships’ House are not members of the relevant committees or any committees; some issues—for example, those arising out of the possible future of the European arrest warrant—are not merely technical but have much wider significance in the context of Northern Ireland and the Good Friday agreement; some things that are being debated may have very considerable ramifications for the state of the union between England and Scotland; and there may be events in the outside world that have a profound impact on the wider politics of all this, and they should not be ignored.
Thirdly, the draft final agreement should be approved by both Houses before it is signed, just as Bills are signed off by both Houses before they go for Royal Assent. If Parliament does not like what the Government bring forward for Brexit, it must know that the Government have to go back and ask for something different. Otherwise, you run the risk of complete legal anarchy and muddle.
There is also the possible matter of compromising our negotiators. However, for many years, business has been conducted in the Council of Ministers, much of it in private, where the generality of the UK’s position is known but the detail is confidential. This seems to have worked administratively entirely satisfactorily, so I do not think that it is a real-world problem, if carried out properly.
Finally, on the matter of certainty, Brexit will inevitably be a drawn-out—possibly a very drawn-out—process. Clearly business wants and likes certainty; as someone involved in business, I know that only too well. But it is more important to get it right in the long run. Compared to that, short-term certainty is a second-order issue.
Lord Beith (LD)
My Lords, the Constitution Committee, under the wise leadership of the noble Lord, Lord Lang of Monkton, gave the Government some helpful advice. I do not really understand why the Government did not take the advice—I fail to see why they did not go ahead and seek parliamentary approval to invoke Article 50. The appeal to the Supreme Court is pointless, unless the Government’s wish is in some way to re-establish the primacy of Crown prerogative, even when to do so would enable them to overturn statutes by executive action. That leads me to fear that, in relation to both Article 50 and the Brexit negotiations, the Government’s wish is to minimise parliamentary involvement. Warm words have not allayed my suspicions, which are based on the positions that the Government have taken so far.
The Constitution Committee’s clear view is that invoking Article 50, assuming it to be irreversible, requires parliamentary approval as a matter of constitutional propriety and practical utility. Of course the Government may want to go to the European Court of Justice and demonstrate that it is possible to revoke Article 50, but Sir Humphrey would regard that as a courageous course for a series of reasons that I will not go into.
As the noble Lord, Lord Boswell, pointed out, there are four distinct stages to this process and Parliament needs to be involved in all of them. In practice, it is naive to imagine otherwise. As his committee points out:
“Too much is at stake for the Government to seek to limit parliamentary scrutiny to establishing accountability after the fact”.
I describe the stages slightly differently. The first one is Article 50 and the negotiating stance on which the Government seek to invoke it. The second is the process of negotiation. The third is approving an agreement and deciding whether the British people should be given an opportunity to accept or reject that agreement, while the fourth is implementation, which of course is completely impossible without Parliament. I shall make two points about two of these stages.
First, it is completely unrealistic for Ministers to suppose that the negotiation stage will be conducted in secrecy. The negotiations will involve the Commission, the European Parliament and 27 national Governments in addition to ourselves. They will leak, if not like a sieve at least as much as my old watering can; and in any case, as the European Union Committee has pointed out, the European Parliament will have access to all documents and can require formal responses to its recommendations. As the EU Committee argues, this Parliament must have at least the same level of access. There has been some indication that the Secretary of State has accepted this principle, but he is only one of a triumvirate, and who knows what the other members of it will think. They will probably tell us quite soon.
Sometimes it will be to the advantage of our Government’s negotiators if they are seen to be under pressure from the UK Parliament on a point they are being pressed to concede, but there will be a stream of informed and sometimes biased speculation coming out of the process that will give rise to debate and questioning here in this Parliament. Of course the outcome of the negotiations will have a profound effect on the livelihoods of millions of our citizens, so these things must be debated.
My final point concerns a very serious fear. If the Government are intent on limiting the role of Parliament at all stages of this process, those who thought that they were bringing power back to the British democratic system will find that they have been cheated. If the vast corpus of European legislation comprising tens of thousands of regulations, directives and legal judgments extending into most corners of public policy and private rights is to be migrated into UK law by a single Act followed by a mass of secondary legislation, it will be a disaster. Secondary legislation which has not gone through a proper amendment process in both Houses will necessarily be littered with defects—we know that from experience. It is also wrong in principle that rights should be taken away or amended by such a process. The people who voted to bring back UK parliamentary sovereignty will find that they have created executive supremacy over laws they thought they would gain the ability to change. It could be the biggest transfer of power from Parliament to the Crown since the Civil War. Not for the first time the attractions of a revolution against the established order, even one achieved in a democratic referendum, will fade when the revolution ushers in a regime that is more authoritarian than that which it replaced, and one less able to deliver prosperity and security.
Lord Bilimoria (CB)
My Lords, I congratulate the noble Lord, Lord Boswell, and his committee on their excellent report. We should acknowledge that this House has huge authority but also that, within it, one of its most reputed parts is the European Union Committee and its sub-committees. It is one of the most respected bodies not only in both Houses of Parliament but throughout Europe. The European Union Committee is held up as an authority to be listened to and respected. When it says that it believes that Parliament can play a vital role in offering constructive and timely comment on both the process and the substance of the negotiations and that such scrutiny will contribute to a greater sense of parliamentary ownership of the process, strengthening the Government’s negotiating position and increasing the likelihood that the final agreement will enjoy parliamentary and public support, I think that we should listen.
The committee has said that Parliament has a duty here, which is the crux of this whole matter. Let us go all the way back to Oliver Cromwell and what he did when King Charles went too far. The principle of parliamentary supremacy was then established once and for all. Cromwell was the most famous alumnus of my college at Cambridge, Sidney Sussex, and his statue still stands outside Parliament even though he was responsible for killing a King. The principle of parliamentary supremacy was established when things went too far. Let us fast forward to today. We are talking about a situation where we must ask: is it the will of the people that Brexit means Brexit, or is it for parliamentary democracy? Then it is all about the individual who is to sit on the Woolsack, where for centuries we had the legislature, the judiciary and the Executive all in one person—completely conflicted but not giving rise to a problem for centuries. There was no need to establish the Supreme Court because we had a perfectly good working system right here in the highest court in the land, the House of Lords.
Now, this is all about the balance and the wonderful unwritten constitution of ours, a delicate thread that has been woven through the centuries and has built the strength and foundation of this amazing country. That foundation lies in the rule of law, and respect for the fairness and independence of our judiciary is at its crux.
The noble Lord, Lord Kerr, in his submission to the committee said:
“This is not the Montreux Convention or the Antarctic Treaty. We are talking about something that … will affect almost every area of public life in this country … Vast areas of domestic policy will be affected, and policy choices possibly foreclosed … by this negotiation. Therefore, it follows that this is a treaty where there absolutely needs to be very full parliamentary scrutiny”.
The committee said that:
“It would be constitutionally inappropriate, not to mention setting a disturbing precedent, for the Executive to act on an advisory referendum without explicit parliamentary approval—particularly one with such significant long-term consequences. The Government should not trigger Article 50 without consulting Parliament”.
That is the crux of it. What was the Prime Minister thinking? Why try to ride roughshod over Parliament? Why try to bully us and disturb our wonderful convention and history? Let us be honest: as I said earlier, this referendum result was democratically definitive, but the figures were 52% to 48%, representing 17 million people and 16 million people respectively. We keep talking about the will of the people, but what about the will of the 16 million? Any responsible constituency MP says, “I have been elected by the majority of my constituents but I look after the interests of every individual in my constituency whether they voted for my party or not”.
One of the recommendations is:
“We recommend that the new Committee appointed to scrutinise Brexit should incorporate the existing scrutiny functions of the European Union Committee”.
Does the Minister agree that that should happen? No one has mentioned so far the fact that the report talks about the wonderful concept of parliamentary diplomacy. Parliament should play an active diplomatic role throughout the Brexit process and the European Union Committee is perfectly placed to do that. Again, does the Minister agree with that?
In the speech she made yesterday to the CBI, the Prime Minister said:
“For this is a true national moment. The decision of the British people on 23rd June gives us a once-in-a-generation chance to shape a new future for our nation”.
But what about the generations ahead?
I turn to the legal ruling that has led to all this. Kenneth Armstrong, professor of European law at the University of Cambridge—and here I declare an interest as chairman of the advisory board of the Cambridge Judge Business School—has written an article entitled Victory for Parliamentary Democracy in which he states:
“However, while the outcome of the referendum has given the Government a political mandate to withdraw from the EU, the legal power to notify must be exercised within legal limits. The High Court has concluded that where an exercise of the Royal Prerogative would remove legal rights, derived from EU law but made available in domestic law by Parliament through the European Communities Act, only Parliament can legislate for such rights to be removed”.
It cannot be any clearer than that. Government lawyers argued that the prerogative powers were a legitimate way to give effect to the will of the people, but the summary of the judgment stated that,
“the Government does not have the power under the Crown’s prerogative to give notice pursuant to Article 50”.
Of course, this has scared Nigel Farage, who said that we were heading for a “half-Brexit.” The noble Lord, Lord Kerr, the author of Article 50, seemed to suggest that once we invoke Article 50, we may be able to retract from it during that process. This is a debatable issue.
Just recently, the Government decided not to implement the recommendations of the Strathclyde review, with the Leader of the House stating:
“We recognise the valuable role of the House of Lords … The Government are therefore reliant on the discipline and self-regulation that this House imposes upon itself”.
But then came the threat:
“Should that break down, we would have reflect on this decision”.—[Official Report, 17/11/16; col. 1539.]
How many times have I been told by people in the other place: “Watch it. Don’t go too far, otherwise that’ll be the end of you lot”? I have heard it outside as well: “You unelected Peers pushed this too far. Your days are numbered”. However, the House of Lords has killed only five statutory instruments supported by Governments since 1945. Let us get real: this House, when it boils down to it, does not filibuster; this House does not block for the sake of blocking; this House does not throw out legislation; we debate it in the best interests not of one party or another but of the country. Three senior members of the Conservative Party, including Dominic Grieve, the former Attorney-General, have said that the Government should withdraw their appeal to the Supreme Court and just get on with it.
We talk about a transitional deal. The noble Lord, Lord Inglewood, said that Brexit would be a long-drawn-out process. It will take two to 10 years. The elements of it are not as simple as exiting the European Union. What about the treaties, whether it is staying in the single market or in the customs union or doing trade deals? The Prime Minister saw this in action in India—I was there when she was. She thought that she could go there with Liam Fox and come back with trade deals. Before she went out, it was announced that Indian IT workers’ minimum salaries would be increased by 50%. One of India’s main exports is its excellent IT services, from which our public services and private sector benefit. Suddenly, they are told that salaries will be 50% higher, which makes them less competitive. When the Prime Minister was there, she spoke about returning to India Indians who had overstayed—that has built a lot of friendship as well. Then, when she had 35 university leaders there with Jo Johnson, she did not mention higher education or universities once in her opening speech; she did not even meet the university leaders, whereas Prime Minister Modi, one of the most powerful people in the world, said humbly that the mobility of India’s youth in education was crucial. We send out negative messages about international students; we still treat them as immigrants and include them in our net immigration figures; and we think that we can do trade deals with India. Dream on.
Canada took eight years to do a trade deal with the EU—it was 1,600 pages. The noble Lord, Lord Kerr, spoke about that. What do the Europeans think about all this? We know for a fact that the whole world thinks that we should not leave the European Union—I know that; India is a perfect example. Anyone I speak to in India—civil servants, government or business—says, “You shouldn’t leave the European Union”. The whole world except Donald Trump thinks that we should stay in the European Union. What about what the Europeans think? We talk about great negotiations—“They need us more than we need them”. What nonsense. Forty-five per cent of our exports go to the EU and 55% of our imports come from it. We are net importers from the EU; we are only 8% of its exports, and that is spread out between 27 countries. Get real. Twenty-seven countries, encompassing nearly 500 million people, will be negotiating against us. We are not in the strongest negotiating position here. According to the Dutch Finance Minister, Boris Johnson has said things which are “intellectually impossible”. The Home Affairs Committee heard that the Brexit campaign had created a dangerously toxic EU debate where facts did not matter.
I do not have the time to re-run the referendum, but the crux of it is that there was a definitive democratic vote to leave the European Union—but based on what? I have met people who said: “I voted to leave the European Union because I wanted to save the NHS”, because they believed the claim on the leave battle bus about £350 million a week being put back into the NHS, a claim in front of which Nigel Farage and Boris Johnson spoke on TV time and again. People voted for different reasons, based on lies.
As the EU Committee’s report states:
“The forthcoming negotiations … will be unprecedented in their complexity”.
The basis is highly complicated and the outcome is far from certain. Does the Minister agree, as many noble Lords have suggested, that there should be a Green Paper, let alone a White Paper, on this?
The Prime Minister wants to use the royal prerogative. One of the strongest areas in which such a prerogative can be used is in going to war—a Prime Minister does not need to consult us; they can go to war. Have they done that in recent history? In 2011, with Libya, the Government granted a vote. In 2013 and 2015, with Syria and Iraq, the Government granted a vote. The Government have not exercised the prerogative, yet here is something that will affect the whole of this country, including our security, and the Prime Minister thinks that she can just go ahead without such a vote. A headline to an article written by Vernon Bogdanor, previously of Oxford University and now at King’s College London, states:
“The EU referendum shows how the sovereignty of Britain’s people can now trump its Parliament”.
That is the big issue here. Is Parliament sovereign? Here is the irony of it all: “Vote leave and take back control. Take back control of our Parliament”. And then Parliament is just cut out of it, and that is convenient. That is hypocrisy. It is contradictory and hypocritical.
I said before the vote and straight after it that there would be repercussions. The first vote of no confidence in this country by the world was the devaluation of the pound—it fell by as much as 20% and is still 15% lower than its pre-vote value. That is the first sign of the uncertainty, which could then lead to higher interest rates, which could then lead to inflation, which could then lead to our economy not growing as quickly, which could then lead to problems for every citizen of this country.
I conclude by referring to the way in which our judges were attacked. I remember when I came as a student to this country and heard Lord Denning, then Master of the Rolls, speak. It was a speech that I will never forget. Then the noble and learned Baroness, Lady Hale, was criticised, including by Iain Duncan Smith, who said that there would be a constitutional crisis. And then the judges were called “enemies of the people”. The noble and learned Baroness said in response:
“It is unfortunate that isn’t made clear to the British public, because it is very important they understand what the role of the judiciary is, which is to hear cases in a fair, neutral, and impartial way. You have to be independent and true to your judicial oath and cannot allow yourself to be swayed by extraneous considerations that have nothing to do with the law”.
When at the Lord Mayor’s Banquet last week the Lord Mayor, Andrew Parmley, praised the judges, he got the biggest ovation of the evening. Our judiciary are respected as the finest, the most just and the fairest in the world. They are independent. There is no way that we should ever dare to criticise them.
This House has the greatest depth and breadth of expertise of any parliamentary Chamber in the world. It would be a waste for it not to be consulted. The point being made by the committee is that this House and Parliament need to be consulted on Article 50 right at the beginning, right through the process and right after it. That is what is at stake here. We need to be part of this process throughout, because our role is that of the guardians of the nation. Whether or not it is smart Brexit, as the noble Lord, Lord Kerr, called it, what is at essence is that we will do our best for this country and nothing else.
Baroness Goldie (Con)
My Lords, I remind your Lordships that in a debate of this type, with the exception of those from the Front Benches, contributions are normally about 10 minutes. I think that that would help the conduct of proceedings.
Lord Bowness (Con)
My Lords, it is a pleasure to follow the noble Lord, Lord Bilimoria, who has painted the picture as it is far more graphically than I will be able to do. I thank my noble friend Lord Lang of Monkton and the noble Lord, Lord Boswell of Aynho, for their introduction of, and explanation of, their respective committees’ reports.
I do not believe that, given the magnitude of the matters that are to be decided in this Brexit issue, it could be right that Parliament should have no involvement until the end of the negotiating process or that its role should be reduced to merely debating the situation and asking questions in a vacuum. I say to my noble friend on the Front Bench that, if Ministers maintain their current position that the Government’s negotiating position cannot be disclosed, and no answers are given to questions other than that, “we will seek the best deal for the United Kingdom,” all the debates and questions will become a meaningless exercise and uncertainty will continue. Asking questions is all very fine but, if there are no answers on the most straightforward of points, it becomes fruitless. I ask the Minister to accept that there are certain matters upon which it could not do any harm at all to give a straightforward and positive answer. It need not become a red line in negotiations, but at least we could be assured that the Government would be trying to achieve helpful outcomes in a variety of different areas that are of concern to people.
The European Union Committee’s proposals for the revised remit to meet the current situation must make sense, given the respected role that the committee has played and the authority that it enjoys in other parliaments. In its conclusions and recommendations, the report speaks of a middle ground, where Parliament will respect the Government’s need for room to manoeuvre and at the same time be able to monitor the conduct of negotiations and comment on the negotiating objectives as they develop. Whether one was in favour of remaining or leaving, and whether or not one is a Member of this Parliament, this is a reasonable position to adopt, whatever one’s opinion.
Like other noble Lords, I will not express a view on the implication of Article 50 and how that should be invoked, but I must endorse and adopt the words of my noble friend Lord Lang and other Members regarding the attacks on the High Court judges. I hope that we shall see no more comments of that kind about the judiciary, and that the Government and all Ministers will be robust, and stand in favour of the rule of law whatever is the outcome of their appeal. If the Government were to lose the appeal to the Supreme Court, it had been my personal hope that it would become clear that the matter could be dealt with by way of a resolution rather than by legislation. But I listened to my noble friend Lord Lang of Monkton on the relative benefits of legislation and a resolution, and I am slightly less convinced about my original view than I was.
I hope that the recommendations and conclusions of these two reports will find favour across the House, among those who were originally remainers and those who were originally leavers. There seems to be a view among some leavers that anyone who thinks that any aspect of our leaving should be open to question in Parliament is somehow seeking to subvert the outcome of the referendum.
I thought, and I still think, that the referendum and the campaigns will rank among the greatest political mistakes and disasters of our time. But I accept the result, as do most of the defeated remainers, in a way in which I rather doubt, if the result had gone the other way, the leavers would have done. However, we should not be, and will not be, diverted from trying to seek to influence the kind of Brexit that we have. After all, the leavers did not know—or they did not tell us during the referendum—what they had in mind in any detail, so no particular Brexit deal was endorsed by the vote. None of the questions posed by the noble Lord, Lord Boswell, in his introduction were answered—certainly during that campaign. People voted to leave for a variety of different reasons—as, no doubt, did those who wanted to stay.
I believe the Government when they say that they want the best deal for Britain. I believe that the best deal for Britain is to remain as close to our partners, friends and allies in Europe as possible. It will involve not merely looking after our economic and security interests but having regard to the interests of the European Union, which—and I know that this is not a view shared by all—has been a huge force for good on our continent. Perhaps if successive Governments, particularly the last one, had made this clear over the years, we would not be where we are today.
I have the privilege of leading the UK delegation to the OSCE Parliamentary Assembly, and I know from colleagues in countries within the European Union, and from others in countries that are not members of the EU, how much store they set by membership and how much they regret our pending departure. I refer particularly to those in the western Balkans who have seen us as their champions along the road to membership. They wonder what sort of European Union there will be without us and how far away membership has become. This is an area of past instability; an area in which Putin’s Russia is interested. Nothing in our arrangements for our departure or future relationship with the European Union, and its aspiring members, should be allowed to put their European future at stake. The support that we give to these countries in their journey towards the European Union should continue, even if we have decided to head for a different—if today unknown—destination.
As we launch ourselves on to the world stage, these near neighbours should not be forgotten. Our future relations with the European Union are vital and the negotiations will be difficult. Our rhetoric and, in some cases, our misplaced sense of humour need to be controlled. A column in the Times yesterday stated that,
“Brexiteers’ bar room bravado will backfire”.
I endorse that. The other member states believe in Europe and regret our leaving and the effect it might have on the Union. This must be recognised, especially by members of the Government who go to visit and represent the United Kingdom.
We have said that until we leave we will remain full and participating members of the European Union, so I ask my noble friend—if it is not too difficult a question to answer—how did the Foreign Secretary’s decision to boycott the special meeting following the US election fit with that? Was it worth the potential ill-will that it might have created? In our hurry to accommodate, flatter and—apparently—lay out a red carpet for President-elect Trump, I hope that we will appreciate the need to recognise the sensitivities of our current partners, many of whom feel bruised by our decision to leave. We need their good will and we should not believe all our Brexit propaganda that they need us more than we need them. We need each other.
These two reports are a balanced set of recommendations that respect the referendum result, the role of government and the need for there to be a proper role for Parliament, too. I hope that the Minister will acknowledge this without reservation or equivocation.
The Earl of Sandwich (CB)
My Lords, I follow much of what the noble Lord, Lord Bowness, has just said, especially about what the countries of eastern Europe are saying about Brexit. I declare an interest as a remainer and a referendum unbeliever. However, I am not with those who wish to rerun the referendum, and I joined this debate in the hope that we will move swiftly towards reconciliation with the EU, albeit as a trading partner or associate member. Of course, this will be with the benefit of advice from our European committees, as has been well established today.
The important political issue before us is quite separate from the legal issue, which has been the subject of the case made in the High Court. It is the rights of individuals, the legislative supremacy of Parliament and the limits of executive power, and I will return to that.
The Government’s appeal will be heard in due course by the Supreme Court, which in this case will also act as guardian of our constitution. Quite separate from this point of constitutional law is another question, that of representation: whether by promoting the referendum as a means of settling such a crucial issue we have—as the noble Lord, Lord Higgins, was saying—impaired our present system of sending Members of Parliament to Westminster to represent us. The Minister may not be briefed to answer that.
This debate concerns the role of Parliament. We have already heard a strong case for the involvement of both Houses in the Government’s plans, if and when we see them. The specific recommendations of the EU Committee are divided into four phases. Of these, we should discuss the first two stages because they are imminent. I wish that the committee had spent more time on the preparatory phases, on which I will focus.
The Government complain that they cannot provide a running commentary, and the committee accepts that. What the Government can and should provide is an outline of their intentions, a point my noble friend Lord Kerr made more strongly than any of us can. We need a framework. As the Constitution Committee says, Parliament should play a central role. Parliament is not an elite, as sometimes portrayed in parts of the media, but an institution—my noble friend Lord Bilimoria was strong on this—set up to represent the people. It is the successor to that which stood up to the Crown, notably in 1642, and in 1688, 1832 and successive reforms since. Brexit, while in the vernacular describing a legitimate populist movement, cannot replace the system we already have, one tried for centuries through our largely unwritten and yet powerful constitution. The noble Lord, Lord Hunt, made these points, too.
We are not mandated by the referendum, which was an indicator of public support for a single idea. That idea is still in a vacuum. It will have no shape or form until first the Government and then Parliament give it such through discussion and finally legislation. The Government seem to rest their case on the referendum and an “in” or “out” decision, but they know that leaving the EU cannot be so simple, involving as it does years of disengagement. Look at trade: all the arrangements made over 40 years for 44% of our exports and more than half our imports must now be replaced by new agreements. Where will we find the experts to carry this out? What status for the UK is proposed? Will it be that of the EEA, Norway or some associated status? Will a customs union or single market be willing to take us?
Look at devolution, another aspect mentioned at the beginning of the debate, and its EU counterpart of subsidiarity. The whole point of these treaty changes was to enable regions and EU members themselves to shed some powers outwards. EU law has therefore become enmeshed in sub-national and regional law, and these strands cannot simply be pulled apart. There are also EU laws and institutions already incorporated into UK law. On crime prevention, can we look forward to the same co-operation with the EU as before?
These things may seem obvious but surely the public should be told about them. Not even the keenest Brexiter will argue that we can simply float offshore when there are vital issues of defence, security and immigration at stake. Recently we opted back into measures like the European arrest warrant, Europol and Eurojust. That was a Conservative Government recognising the need to co-operate on these issues. How can those instruments be replaced?
This surely leads to the question of red lines and what Parliament should discuss now instead of awaiting the pleasure of the Executive. Now that the Prime Minister and her Cabinet have had months to think about this, why can they not come up with broad principles in a Green Paper, as mentioned by my noble friend Lord Kerr? I do not foresee any blocking by Parliament—nobody has mentioned it—which is what the Brexit media say the Government fear. I would like to see engagement at stage one. Parliament needs to see what is broadly proposed and can be discussed with MPs and Peers before Article 50 is triggered. This could surely be done between January and March.
Some issues governed by EU law cannot even wait for discussion, as mentioned already. The Government should announce them as soon as possible. They are issues such as the status of EU citizens here and our own citizens in Europe, mentioned by the noble Lord, Lord MacGregor. Pressing issues of funding affect universities—mentioned by my noble friend Lord Bilimoria—and rural areas, for which the Government have provided too little comfort so far. These questions need to be decided now, as has been argued repeatedly.
In this revising Chamber, we offer not a decision but a second opinion based on our expertise and experience. That is universally recognised and in a sense the Government are encouraging us to offer that—but it cannot be in a vacuum. Having reread the recent Brexit Statement, I wonder whether the Government took the point that it is not just time for debates of our own reports that we seek but—the Minister might like to focus on this—the application of the wisdom in those reports to the Government’s own plans and intentions. Surely the least the Minister will say today is that the Government intend to have an outline of these plans in time for us to debate them before next March.
Finally, the issue many of us are concerned about is not Article 50 but executive power. Parliament has continually sought to control the Executive and, once again, the Executive assume that they alone have the right to direct the course this country is to take. Parliament could again be presented with a fait accompli, albeit dressed up in the appearance of a choice. We must face that. We are currently on a fault line, running across America and Europe, between those who fear centralised power, uncontrolled migration and liberal economics, and those who wish to defend shared alliances, universal human rights and free movement of goods and people. This is a dangerous moment in history that cannot be left to a one-off decision of the people. It should be openly discussed in our Parliament before we move towards what I accept is inevitable change.
Lord Balfe (Con)
My Lords, first, I thank my noble friend Lord Lang and the noble Lord, Lord Boswell, for their excellent reports. Secondly, I draw attention to my entries in the register, many of them concerning my various European roles. I was also strongly in favour of remain. We made a foolish decision: 43 years on from joining the EU, we appear to be deciding that we will be the only major industrialised country in the world that is affiliated to no one at all in particular and will somehow try to negotiate our way through a morass of technical agreements in the modern world.
I serve on one of the sub-committees, as the noble Lord, Lord Boswell, knows. Representatives of the Norwegian Government came to see us. They told us of the hundred treaties, the whole department of the Norwegian Government that exists to monitor their relations with the European Union and, in particular, that very valuable section of the Norwegian department responsible for ringing Stockholm as the only way they can get their viewpoint put forward in the EU. Of course, that can be ignored when Stockholm does not like it.
I will deal first with the matter of Article 50. I do not understand why the Government do not come to Parliament for a vote. They would not lose it: in the Commons it would be made a matter of confidence and in the Lords we would not defeat it. Why do they not come? Why do they not want to hear what we have to say, particularly since we do nothing else but talk about Brexit? We have a debate virtually every hour on the hour about some aspect of it or other, so why not come here to talk about Article 50? That is on page 8 of the report by my noble friend Lord Lang—the noble Lord, Lord Bilimoria, quoted from it.
I turn now to the European scrutiny. In the report by the noble Lord, Lord Boswell, the Secretary of State is quoted as assuring the committee that it would be unacceptable for the European Parliament to have greater rights of scrutiny over the negotiations on Brexit than Westminster does. However, the European Parliament will be regularly scrutinising every aspect of those negotiations. It is going to be a running commentary. Paragraph 54 states that:
“What is striking is not only that the European Parliament, as Lord Kerr put it, ‘will have access to all the negotiating documents’, but that it will have such access ‘at every stage’”.
This is in the summary with a list of the documents to be supplied.
I ask noble Lords—and noble political parties, if they are noble—what attempts they are making to talk to their MEPs. I know of very little talking. Surely they should be part of our gathering: we should be talking to them—they are the representatives on the other side of this fence. We need a structure whereby we can talk to our colleagues in Europe. However, we also need a structure in our political parties—I look particularly at the Opposition here—whereby we can talk to our political friends in other countries, because they will have an enormous impact on this dialogue.
Some noble Lords may remember that I have a particular interest in Scandinavia and the Baltics. Those countries are absolutely distraught by this decision. Britain used to be the sensible voice at the negotiating table; its contribution was to help build the blocking minority. If Britain was against something, it was generally for a fairly sound reason, and Sweden, Finland and the Baltics would look at it and say, “Yes, well”. Then, in Berlin, they would say to their friends: “Look, I think we had better listen to these people because they might just get a blocking minority”.
When Britain goes, the pressure will move to Berlin. Berlin will no longer be able to stand in the centre; it will have to take a much stronger role. It is a role that—having recently been there—I can tell you that it is not looking forward to taking. Britain can take a strong role and the worst that people will say is that we are throwing our weight around. Unlike Britain, however, if Germany tries to take a strong role it brings out all the animus of years ago. That is why the Germans do not like it and are very unhappy at our leaving. We have been the sensible people who have helped to deliver a European Union that works: when we look at things we ask whether they will work. If we are to have this dialogue about dissolution, we must look much more closely at the European Parliament, what it wants and what we can actually do, because at the end of the day, as Article 50 so accurately states:
“It shall be concluded on behalf of the Union by the Council, acting by a qualified majority, after obtaining the consent of the European Parliament”.
I finish with a few words about that. If we trigger Article 50 in March 2017 we will be looking for the consent of the European Parliament in the early months of 2019. What happens in 2019? Yes, you have guessed: there is an election. Half the people in the European Parliament will be demob happy because they will not be coming back, and the other half will be appealing to their Twitter accounts and the like and reacting accordingly: they will make the Government of Wallonia look like the most sober, respectable negotiators who ever went into a Canadian trade agreement. You will run into every possible problem.
I predict—it may not happen—that 27 countries of the European Union will decide that they wish to lengthen the negotiations. The noble Lord, Lord Kerr, will immediately spot that this cannot be done without Britain. If, however, 27 countries say to the United Kingdom that they wish to lengthen the negotiations by a year because of the European Parliament elections and all sorts of extraneous things—apart from the fact that the negotiations will not be finished anyway—it will be very difficult for us to say, “Oh no, we’re off—bye!”. It will just not work that way, will it?
What will happen then? We will have some sort of extension, and then we will have an election in the United Kingdom. I would not for the life of me propose it, but I wonder what would happen if one of the political parties were to go into that election saying not that it was going to overturn the decision—no, no, no—but that it intended to pause and review the process. Some noble Lords may know that one of my specialities is mortality rates. Demography means that the majority will be somewhat diminished by mortality, if I am to believe the voting profile by age. It may well be that a younger generation says: “Oh God, we have an opportunity to get out of this: we can pause”. We do not know what might happen after the pause. So I say: be careful, as my daughter is fond of saying, of what you wish for, because you may end up with something that you did not want at all.
Lord Maclennan of Rogart (LD)
My Lords, it is a privilege to follow the noble Lord, Lord Balfe, and I congratulate the noble Lord, Lord Boswell, and my chairman, the noble Lord, Lord Lang, on their excellent reports.
Western Europe has seen 70 years of peace. I fear that Britain’s exit will unravel the knitted union and that western Europe may face further disruptions and wars. The referendum was a mistake, in that it was an advisory referendum but the Conservative Party suggested that the Government would take the advice. That it was a great mistake was emphasised by the departure of David Cameron as Prime Minister. He made a commitment in his manifesto to stand by the public’s decision. That should not have happened.
Parliament is not sufficiently involved in the negotiation process. We won the High Court case on the invoking of Article 50, and the Government are appealing it. The court case will be a matter of law. It seems to me that Parliament is the representative of the public and should be aware of what the Government intend. We have no idea how the Government propose to negotiate, or of their objectives. We have no idea how they would present this negotiation to the public. We must recognise that the negotiations should be made available to Parliament and that we should have a Green Paper setting out the Government’s objectives and the alternatives. We have a representative democracy and it is worthwhile setting up both Houses of Parliament to consider what the Government’s objectives are. We should be involved in the negotiations.
The noble Lord, Lord Boswell, said that what matters is the substance of Brexit and I totally agree. We need short reports covering the issues; he mentioned 20, which may be too few, but we need to know because we have been members of this Union for a very long time. It has made our law, which we will have to unravel if we are to separate from it. We know next to nothing of the Government’s position. Both Houses of Parliament should agree to issue guidelines. Parliament must be involved in the scrutiny of the legislation that will be forthcoming. We should not wait for the conclusion but should appoint a committee to supervise the negotiations. It should of course respect the confidentiality of the negotiations but should also have knowledge of the heads of agreement and the head objectives. The role of Parliament is critical. As a number of people have said in this debate, we are not leaving Europe. However, we need to know what structure of Europe we can belong to, and we have to see what the Government think about this.
I also wish to put forward the objectives of Scotland and Northern Ireland, which have voted against Brexit. How are they to be involved in the negotiations? Will they be involved in preliminary talks? Will the devolved Governments be involved in the process? What structure do the Government have—and intend to have—for these countries, which are so keen to remain members? I wonder whether we could reopen the issue if we find that the negotiations render us into a downturn of the economy.
Donald Tusk has said that withdrawing Article 50 is perfectly possible, as the noble Lord, Lord Kerr of Kinlochard, said. If Article 50 can be withdrawn, I wonder what the Government will say if they find that the negotiations are hopelessly unreal and hopelessly damaging to this country. Will they permit that to be made public?
Lord Hannay of Chiswick (CB)
My Lords, the two reports we are debating deal with matters of the greatest significance for our nation’s future as we prepare to leave the European Union. Others have underlined their importance. I could not put the matter better than it is put in paragraph 2 of the first of those reports—that of the Constitution Committee. It stated:
“Constitutional change of such magnitude must be approached carefully and scrutinised appropriately, with the roles and responsibilities of both Government and Parliament set out clearly in advance”.
It is a pity that the Government have so far declined to do that—but it is not too late to remedy the omission. I hope that the Minister will begin this evening and that the Government will, in the weeks ahead and before the deadline they have set for triggering Article 50 before the end of March, do precisely that—whether or not they are compelled to do so by a ruling of the Supreme Court. If most of my remarks today relate to matters on which I do not entirely agree with the reports, or to querying omissions from them, that does not detract from my view that they are both excellent analyses, for which the House owes both committees a debt of gratitude.
I do not want to dwell at length or in detail on the question currently before the Supreme Court as to whether the Government are entitled under the royal prerogative to trigger Article 50 without Parliament’s say-so; it would be better to await the court’s ruling. But it is surely supremely ironical, as several other speakers have said, that so many of those who campaigned for us to leave the European Union and their raucous supporters in the press, who asserted that only in this way could the sovereignty of Parliament be restored, are now lining up to support bypassing Parliament in this matter. It is, perhaps, too much to hope for logic and consistency in politics—but this pushes the outer limits of inconsistency rather a long way.
On the question of the potential revocability of Article 50, I really do not know on what basis the Government have stated so categorically that reversal is impossible. Since Article 50 is completely silent on the matter and neither says that it is possible nor that it is not, it would seem to be a rather heroic assumption; something that Sir Humphrey might well have told his Prime Minister was, “Very, very courageous, Prime Minister”. I contest, however, the suggestion in the report that the question of revocability is primarily a legal one. I believe that if the circumstances were to arise in which the UK wished to withdraw its triggering of Article 50 it would be and would be seen to be a predominantly political matter, to be handled politically by all concerned, not simply passed on to a court.
As to the manner in which Parliament might authorise the Government to trigger Article 50 through primary legislation, a resolution or Motion—the three options set out in the Constitution Committee’s report—I was rather puzzled to find no reference to a quite recent precedent which, although it may not be identically analogous to present circumstances, was surely close enough to be of some relevance. This precedent was the procedure followed in 2013 and 2014 when the Government wished to trigger the provisions of Protocol 36 of the Lisbon treaty that allowed the UK to withdraw from all the European Union’s pre-Lisbon justice and home affairs legislation and at the same time negotiate to rejoin 35 of the most significant measures.
Those two issues were brought before both Houses in the form of an amendable resolution. Triggering and rejoining were approved by both Houses—although admittedly the Commons took rather longer to approve the rejoining than we did. The Government then negotiated the rejoining package with the Council and the Commission—reporting to Parliament from time to time—and returned to Parliament with the modestly changed outcome which was approved, as were the necessary changes to our domestic legislation to give effect to that outcome. The protagonist of that procedure was none other than the Home Secretary who, strangely enough, was called Theresa May. Might it not be wise for the Government to give some consideration to that precedent just in case they do not win the day in the Supreme Court?
One matter that gets aired rather frequently—this is a quite different matter—is the contention that for the Government to set out their broad approach to the Brexit negotiations as part of the triggering process would undermine or fundamentally damage their capacity to negotiate effectively. That simply does not stack up. It does not match the reality of negotiating in Brussels. Whatever opening statement we make at the outset of the negotiations will immediately be in the public domain. The concept of negotiating confidentiality when you are dealing with 28 Governments and several European institutions is simply not credible. Is Parliament—the two House of Parliament here—to be the last to be told about that opening position? Is it to be the only participant not to have a chance to comment on the Government’s broad approach?
No one is suggesting that the broad approach should be spelled out in minute detail. That will be a matter for the negotiations themselves. Let us hope the Government will come to see the advantages. My noble friend Lord Kerr of Kinlochard set them out very fully, in particular the desirability of giving more prominence to the areas where we want to continue working intimately with our European partners. He named three areas: justice and home affairs, science and co-operation, and a common foreign and security policy. There are real advantages if we spell them out in advance, not disadvantages.
I have one final point. There was a proposal in the European Union Committee report—which the noble Lord, Lord Boswell, so eloquently introduced—that this House should establish its own Brexit committee. What on earth has happened to that? Surely this makes the most obvious and simple sense. Why is it not being taken forward? Why are we allowing the other place to steal a march on us? After all, it set up its Brexit committee about a month ago. I hope the Minister will be able to respond in some measure to the points that have been raised. As I said in another of our rather frequent debates on Brexit, it really is getting just a little bit tedious and frustrating simply to be sending notes up the chimney to Father Christmas.
Lord Desai (Lab)
My Lords, I want to dwell on the distinction made in the Constitution Committee’s report between resolution and legislation. It is very important that the Government introduce a resolution confirming that they accept the result of the referendum, so that, whatever delays are involved in invoking Article 50, the people do not think that their will is being denied. Although the margin overall was 4 percentage points, the margin in England was 7 percentage points and England voted with the same difference, 2 million votes, in favour of Brexit as did the entire country—so the rest of the country cancelled out between remain and leave. England made the difference and the English public will be extremely angry if their will is going to be thwarted. So I think a short resolution confirming that Parliament accepts the referendum result would be good.
Then we may want an Act—legislation, again as recommended by the Constitution Committee—which would lay out what the Government should do before invoking Article 50. We should have a lot of parliamentary input in the process before and after, but during the divorce negotiations we should have a limited presence. I have once before advocated a Joint Committee of both Houses of Parliament which would have the information from the Government on Privy Council terms. We cannot really have, between this House and another place, 1,500 people trying to micromanage the Government’s negotiations. But a Joint Committee of both Houses of Parliament under Privy Council rules could be given all the information by the Government. It would be able to advise the Government on how to proceed and that would both give Parliament a voice in the procedure and not be too public. One difficulty in making it public is that we have a very vicious press. It will attack people for whatever reasons, as it already has done. It is very important that the Government can keep their cards close to their chest while negotiating with Europe.
I agree with the noble Lord, Lord Kerr—one dare not disagree with him, I would say—that we need a smart Brexit. The correction I would make is that we need a quick Brexit and a smart framework of negotiations. We want a quick Brexit because we want to get out of this mess. Let the divorce be quick and let the cohabitation negotiations be fruitful and beneficial, because once we get the Brexit thing out it is not just the 27 we have to get on with; the other n minus 27 with whom we have to negotiate trade treaties are also waiting out there, and the quicker we do Brexit the better off we will be.
Lord Davies of Stamford (Lab)
My Lords, this has been quite an unusual debate; almost every contribution has been very effective and penetrating, and two or three have been quite memorable. I am grateful to be able to speak in the gap. I do not need more than a few minutes. I just want to ask the Government three simple questions that I think are in the mind of every member of the public who takes an interest in this matter.
The first has already been asked by two of the Minister’s noble friends, the noble Lords, Lord Higgins and Lord Balfe, so I hope if I ask it again towards the end of the proceedings there is a chance it might get an answer: why have the Government been so desperately anxious to cut Parliament out of the loop over Article 50? No one has given an explanation of that, but the proceeding is quite extraordinary and the public are entitled to know why. I hope we will not be told that it is in order to save time, because it really would be the most terrible insult to Parliament to be told that to consult it was a waste of time. Anyway, it would be an untrue explanation because, by appealing the decision of the High Court, the Government have lost more time—at least six or seven weeks—precisely in order to be able to prevent Parliament from getting in on the action. In other words, it is quite clear that time is not the consideration in the Government’s mind. So there is a mystery here, and the mystification of the public on this point ought to be brought to an end. We ought to hear from the Minister tonight exactly what the real motives of the Government have been in this extraordinary matter.
Secondly, why have the Government not clearly and unambiguously dissociated themselves from the shameful attacks on the judges that were made after the High Court’s judgment—attacks that included the phrase “Enemies of the people”, a phrase popular with the most murderous and terrible fascist and communist regimes of the 20th century? That was a quite extraordinary piece of hysterical demagogy, and it is amazing that someone should resort to such terms in any civilised democracy. Yet the best that the Government could do was come out with a statement— drafted, presumably, by some spin doctor at No. 10, because identical statements were produced by the Lord Chancellor and the Prime Minister—that started with just one sentence, a perfunctory acknowledgement of the principle of the independence of the judiciary. That was coupled with another single sentence talking about the freedom of the press—quite gratuitously, because the freedom of the press had never been attacked or raised in that whole context. The effect of the combination of those two sentences, drafted and conveyed in that way, was actually to put forward the idea that maybe the Government had some secret sympathy with what the press had been saying about the judges, which of course would be utterly deplorable. The Minister has an opportunity tonight to put that terrible impression to rest and to dissociate himself unambiguously and clearly from those mischievous, appalling and unforgivable words.
My third question is a fundamental one, to which the public have a right to a clear answer from the Government: what is the Government’s concept of parliamentary sovereignty? If I ask the Government whether they believe in parliamentary sovereignty, I know they will say yes, but what do they mean by it? Specifically, do they accept the definition in the High Court’s judgment, which I think is the most lucid and authoritative definition that I have ever seen? It is not original because, of course, the concept is not original—it has been going on for a long time; I remember reading the words of Sir Edward Coke on the subject as a schoolboy and trying to memorise them for examination purposes—but it is very clearly set out in the judgment, which is likely to become a locus classicus on the subject in future. Do the Government accept that? Do they accept what followed from that, as explicitly stated by the judges, that therefore the referendum, since Parliament did not explicitly decide otherwise, was in fact advisory? I ask the question particularly because, on two or three occasions, I have heard government Ministers from the Front Bench refer to an “instruction” given to Parliament by the electorate. The Minister will accept that instruction is quite incompatible with sovereignty. By definition, you cannot be sovereign and subject to instructions from outside. That is a matter of the logical use of language. Can we hear tonight from the Government what their concept of parliamentary sovereignty is and whether they accept the definition in the High Court’s judgment?
Baroness Ludford (LD)
My Lords, in commending both reports and the remarks of the noble Lords, Lord Lang and Lord Boswell, I note that it is important to remember that what we are talking about is the UK’s own domestic arrangements and constitutional requirements in the Article 50 withdrawal process. We determine these ourselves, not by any instruction from Brussels. Even if the Luxembourg court got involved via a reference from our own Supreme Court, or indeed from a national court in another member state, that would be purely to answer a point of EU law—“Is Article 50 legally revocable?”—though I happen to believe that politics may well overtake that question eventually; it would not be to address, let alone to decide, our own domestic arrangements. I hope, though I say this more in hope than expectation, that the press will remember that.
Both reports were written before the High Court judgment and do not depend on it. As the Constitution Committee report notes, it is the political and constitutional significance of decisions relating to the UK’s membership of the EU that makes the involvement of both Houses absolutely justified. The committee also notes, as did the noble Lords, Lord Higgins, Lord Bilimoria and Lord Balfe, among others, that the Government ought to want to work with Parliament in the spirit of co-operation—indeed, perhaps to share the burden of responsibility. The Constitution Committee was in fact very clear and strong in its language:
“It would be constitutionally inappropriate … for the Executive to act on an advisory referendum without … parliamentary approval—particularly one with such significant long-term consequences”.
Those are very strong words.
Between them, the two committees amplify that strong argument. First, enacting the result of the referendum should require at least the same level of parliamentary involvement as a decision to authorise military deployment. If that point has been conceded in the last few years, why are we even talking about it now? Secondly, Parliament would have to legislate to implement any relationship with the EU, so the Executive must ensure that they have proper parliamentary approval for the process leading up to that new relationship. Thirdly, one consequence of Brexit is that many key aspects of domestic policy could potentially be determined not by Parliament but in negotiations conducted behind closed doors, which is invidious. The Brexit Secretary has said that the Government are determined,
“to build national consensus around our approach”.—[Official Report, Commons, 5/9/16; col. 38.]
How better to do that than in Parliament?
We on these Benches entirely agree with the thrust of the two reports that Parliament must be involved in all the stages—I cannot now remember if there are three or four—of the Brexit process. “Taking back control”, as my noble friend Lord Beith said, does not mean handing control to the Executive. Parliament’s demand is to be involved in setting the strategy, not, as Mr Davis has claimed, in micromanaging to deprive the Government of room for manoeuvre or indeed, as the Chancellor said in an interview at the weekend, an involvement in the tactics of the negotiations. It is the overall picture that Parliament needs to be involved in.
Parliament adds value to the process of the Brexit negotiations. We are not to be regarded as some pesky nuisance. Our active scrutiny can assist the Government in a proactive way to achieve a successful outcome. All we need to do is look around on these Benches at the amount of expertise. On options, risks and opportunities, we are expecting 20 or so short reports on the impact of Brexit from the EU Select Committee under the noble Lord, Lord Boswell, and I believe they will provide a wealth of material. Far from undermining the Government’s negotiating stance, parliamentary approval of the negotiating guidelines can strengthen the Government’s hand, as several noble Lords have mentioned, when dealing with their partners in the negotiations. Indeed, we can protect the Government from the wild and irresponsible hard Brexiteers in their own party. One senior commentator has remarked that,
“The expectation that May will be pushed around by the Tory party right wing explains some of this pessimism”,
about the possible breakdown of Article 50 talks and Britain crashing out into a hard WTO-only exit, which of course would be disastrous for the economy, business, jobs and citizens.
So the Government are not respecting the will of the people—that much used and abused mantra. If they were, they would be planning a referendum on the outcome of the negotiations, because you cannot respect the will of the people if you do not allow them a say in the final outcome. They are not seeking a national consensus. All they seem to be doing is obeying the will of the Tory right-wing and UKIP, and that is not the same thing at all.
My noble friend Lady Suttie dealt with the refusal to give information on the Brexit terms on the basis of the “no running commentary” excuse. She cited the precedents of previous treaties. The noble Lord, Lord Hannay, cited the example of the justice and home affairs mass opt-in. There is plenty of precedent for keeping Parliament informed. Indeed, Ministers are doing plenty of whispering to their friends in the press. It is quite insulting to be told that Parliament, uniquely, cannot be kept informed.
I fear that it gives the game away on the real reason for the Government’s doctrine of unripe time that there is in fact no political consensus in government; it is really about time that there was. Many of us are weary of the Prime Minister talking in “Brexit means Brexit”-type riddles, which is becoming as demeaning to the Government as it is disrespectful to Parliament and the people.
The Secretary of State for Exiting the EU gave a pledge that we would not be second-class to MEPs. Indeed, my noble friend Lord Teverson provoked that promise. This means, as the report tells us, access to all the negotiating documents and at every stage of the negotiations, giving feedback and being listened to and responded to through a sort of flexible scrutiny reserve process. It means being told the response to Parliament’s concerns. Of course, it means safeguarding confidential information.
The reality so far is very different. The Government have already taken a number of steps without any reference to Parliament, leaving us to read the tea leaves. In no particular order, we have had the following. The noble Lord, Lord Hill, resigned his Commissioner post, so we lost the financial services portfolio. The Government renounced the presidency slot in 2017—perhaps inevitably, but it was done without any reference to Parliament. The Government said that they are giving priority to curbs on free movement of people, even if it means leaving the single market; but they are leaving UK and other EU nationals who have taken advantage of freedom of movement rights in total limbo, which is shameful. The Government have said that they want us to be outside the jurisdiction of the Court of Justice of the European Union, which will be very problematic for future relations. They have announced the fact but no details of a deal that satisfies the car company Nissan, which begs the question of whether that could fall foul of state aid rules and whether some special inclusion in the customs union for cars is expected.
All this has happened without Parliament being given any chance to influence the Government’s stance. Finally, we have had signalling of a slashing of corporation tax which, along with the rhetoric of some in their party, makes some people fear that the Government are set to make the UK the Singapore of the north Atlantic, which could make recognition and equivalence regimes much more difficult to achieve. The Government have also opted into the new Europol regulation, which is extremely good news, but begs the question about future security co-operation, which is vital.
I conclude by asking for the Prime Minister, instead of giving drip-drip to the press and making inscrutable utterances, to articulate her choices. Parliament, with or without a Supreme Court judgment, must be fully involved in the pursuance of them. Taking back control means no less.
Baroness Hayter of Kentish Town (Lab)
My Lords, I join others in thanking the noble Lords, Lord Lang and Lord Boswell, and their hard-working committees, for these very thorough, clearly written—always appreciated —and forward-thinking reports. I also thank them for the debate today, although I doubt whether we need to debate Article 50. There should be no need for discussion on it, as the Government—albeit not the noble Lords, Lord Kerr and Lord Hannay—accept that, once triggered, there is no going back. There is then the inevitable withdrawal from the EU and the deprivation of certain rights from British citizens. Consequently, it can only be Parliament, not the Crown, which takes the trigger action that leads to that inevitable result. The unanimous, unambiguous High Court ruling was that,
“the Secretary of State does not have power under the Crown’s prerogative to give notice pursuant to Article 50”,
of the treaty.
At one level, that is fairly obvious. Had some Prime Minister suddenly woken up one morning, posted off a letter to Brussels invoking Article 50 without a referendum or even a Cabinet decision, it would still have been an irrevocable move. But if the Government’s argument on Crown prerogative is right, it would have been “in accordance with” our “own constitutional requirements”. It would therefore be unstoppable by Parliament—if the Government are right that Article 50 cannot be stopped—so it would happen. We could sack the Prime Minister who had done the deed, but we could not undo the deed. As the judges said, the referendum was only advisory, so in law—albeit not in politics—this Prime Minister, even after the referendum, would be doing something with no statutory authority from the people or from Parliament. Indeed, as the noble Lord, Lord Lang of Monkton, reminded us, and as was mentioned by the noble Lords, Lord Hunt of Wirral and Lord Bilimoria, the Constitution Committee stated:
“It would be constitutionally inappropriate, not to mention setting a disturbing precedent, for the Executive to act on an advisory referendum without explicit parliamentary approval”.
The question is: why on earth are the Government appealing against that decision? It is what I think the noble Lord, Lord Hunt of Wirral, called an unnecessary sideshow, and the noble Lord, Lord Kerr, called a distraction. Do the Government really want to deny Parliament a say in Article 50, and at what cost to our economy? Increasingly, business is saying, “Please get on and tell us what your negotiating plan is”. Just yesterday, the president of the CBI called on the Government to “minimise the uncertainty”, asking her to set out what the Government will prioritise in their negotiations. As he said, the CBI membership is,
“100 per cent committed to making the best of Brexit”,
which,
“means maintaining tariff-free access to the European market … maintaining … global trade deals … making the best … of talent available globally”.
But, experienced negotiator as it is, the CBI also said:
“We’re not asking for a running commentary—but we are looking for clarity and—above all—a plan”.
It is not surprising that it wants some clarity as, in the Czech Republic, Boris Johnson said,
“probably we will need to leave the customs union”.
That would be a major step with enormous implications for our exporters and consumers. Indeed, falling back on WTO rules would be the most destructive of the settlements available, leading to fewer jobs, less investment and, probably, a poorer population. Can the Minister clarify whether that particular statement of the Foreign Secretary is indeed the settled government view and, if not, what is?
As the CBI recognises, leaving the customs union and reverting to WTO rules could not even be in place within two years. It has asked the Government to commit to transitional arrangements, as it fears a clock striking midnight when the two years are up, and a cliff edge—a sudden, overnight transformation in trading conditions, with firms stranded in a regulatory no-man’s land.
It appeared yesterday that the Prime Minister acknowledges the danger of a cliff edge, although today we hear that she may not after all want an interim deal. Does she acknowledge, as we have learned from our discussions with member states and—yes, I say to the noble Lord, Lord Balfe—Members of the European Parliament, both in the Labour Party and from other PES countries, and indeed from sources close to the Commission, that such transitional arrangements would depend on the final departure package?
Indeed, such transitional arrangements would probably require all 27 sets of ratification through perhaps 36 different bodies. Such transitional arrangements anyway would need to cover the journey from the point of exit to the final position. That means that the EU27 would need to know where that final position is—the end of the bridge, in the words of the noble Lord, Lord Kerr. To agree a bridge, we have to know where exactly on the other side will be our final position. It will also probably mean knowing when we will remove ourselves from the four freedoms which the EU sees as fundamental to the single market.
That is what the Government should now be discussing as they draw up their framework for negotiations, using all the skill and experience, as we have heard, of your Lordships’ House in what are going to be fiendishly difficult talks, with challenging trade-offs to navigate. As the EU Committee stressed, these,
“negotiations ... will be unprecedented in their complexity”,
and it “is inconceivable that” they,
“should be conducted …without active parliamentary scrutiny”.
David Davis said to his party conference last month, when talking about EU partners:
“If we want to be treated with goodwill, we must act with goodwill”.
He might well have been referring to Parliament. If the Government trust us, they will find that we respond positively.
So I revert to the question posed by the noble Lord, Lord Balfe, and my noble friend Lord Davies: why are the Government not bringing Article 50 to Parliament? Why are they taking the appeal to the Supreme Court, wasting valuable energy and time, to say nothing of money or the public’s patience? Is it simply obstinacy on the part of the Prime Minister because it was not the original decision? The focus of her time and effort should be preparing for the very complex—“tortuous” was the word used by the noble Lord, Lord MacGregor —set of negotiations which will follow. The bargaining will be hard. Tough choices will have to be made. How much more expedient it would be for the Prime Minister to be at that negotiating table with the strength of a parliamentary vote—freely requested—behind her, rather than a resisted vote, dragged out of her by the highest court in the land.
As our own Constitution Committee said before the original court case, it was always going to be better to go to Parliament rather than using the prerogative. That is the best and perhaps the only way to build a national consensus and bring the county together once more on this—having an informed, mature conversation with the British people and their representatives. In the words of the noble Lord, Lord Boswell, getting a parliamentary and public buy-in to that final deal is why we favour a parliamentary vote.
Even now, at this late hour, we call on the Government to return to Parliament its rightful role in taking this momentous step. I hope that opposite me is a brick wall, in the sense that we get back some answers rather than these questions just being lodged in the hedge.
The Parliamentary Under-Secretary of State, Department for Exiting the European Union (Lord Bridges of Headley) (Con)
My Lords, I am delighted to be likened to a brick wall. When my wife says that talking to me is like talking to a brick wall I shall remind her that it is a compliment.
I thank the members of the Constitution Committee and the European Select Committee not just for securing this debate but for their extremely interesting and useful reports. I also thank all noble Lords who contributed to this very good debate.
From the outset I want to stress the importance that I personally attach not just to the role of Parliament but to the Select Committees in the process before us. I hope to continue to draw on the invaluable expertise and experience that I have heard, and been able to use, in recent months. I intend to continue to have as many meetings as I can with members of those committees. I am grateful to the Constitution Committee for agreeing to extend the deadline for the Government’s response to its report given the legal sensitivities that currently exist. I assure noble Lords that the Government will respond formally to the EU Select Committee’s report in line with the usual timeframe.
However, clearly this debate gives me an opportunity to set out the Government’s thinking on a number of the issues raised this afternoon, and I shall begin by outlining the guiding principles that underpin our approach. The first principle is one of which noble Lords will be well aware—that we must respect the view of the electorate expressed on 23 June to leave the European Union. The Government, as I have said before at this Dispatch Box, are determined to deliver on what the people of the United Kingdom voted for. There must be no attempts to rejoin the EU through the back door and no second referendum. On that point I welcome the comments made previously by the shadow Leader of the House, the noble Baroness, Lady Smith, that the Opposition will not seek to block Brexit. I hope that that approach will be followed by all sides of the House and, meanwhile, that the scrutiny of the process of the legislation will be constructive, as I am sure it will be, with this House exercising its usual discipline and restraint.
The second principle is that we respect and value the role of Parliament, and the third principle is to negotiate in the national interest. I bracket those two principles together, as clearly a balance needs to be struck if we are to respect both those principles. We do indeed want to be as open and transparent as we can with Parliament. However, it is also crucial, as a number of your Lordships have said this afternoon and previously, that the Government negotiate from the strongest position possible. Revealing too much information before triggering Article 50 will, as a number of your Lordships know, weaken our hand. Indeed, the EU Committee of this House has noted that point. Getting the balance right is clearly a core aspect of the debate today, as my noble friends Lord Boswell and Lord Lang said, and it is something on which we are very focused—a point I will return to.
The final principle governing our approach is to respect the rule of law and abide by due process. That obviously means respecting the ruling of the Supreme Court as regards Article 50, and respecting the independence of the judiciary. In response to the noble Lord, Lord Davies, I thoroughly concur with what my noble and learned friend, Lord Keen, said a couple of weeks ago at this Dispatch Box:
“My Lords, we have a judiciary of the highest calibre”.
Sadly, however—and I say this as a journalist myself—that cannot always be said of the media and the press. As my noble and learned friend also said:
“Sensationalist and ill-informed attacks can undermine public confidence in the judiciary, but our public can have every confidence in our judiciary, a confidence which I believe must be shared by the Executive”.—[Official Report, 8/11/16; col. 1029.]
Lord Davies of Stamford
I am grateful for that, but it does not really answer the question. The question is not whether the Government are in favour of the independence of the judiciary but whether they dissociate themselves from the appalling remarks made in the press about the judgment in the High Court.
Lord Bridges of Headley
I think I did answer that point. I am sorry to say that some comments in the media can at times be sensationalist, but at the same time, we obviously want to respect the freedom of the press. Above all, in this case, I concur with the thrust of the noble Lord’s point: we absolutely must respect the rulings of the Supreme Court in this case and the independence of the judiciary. Respecting the rule of law and abiding by due process also means respecting our obligations and responsibilities as a member of the EU up until the day we leave, and respecting parliamentary precedent and procedure as regards the legislation that we shall need to pass as we leave the European Union.
With those principles in mind, I shall approach the issues we are debating under two broad headings: first, the process we are following, up to and including the triggering of Article 50; and secondly, the process that will follow. Let me first, very briefly, chart the democratic process that has been followed so far to leave the European Union, which my noble friend Lord Hunt referred to, in an attempt to bring out the interaction between representative and parliamentary democracy on the one hand, and direct democracy on the other.
In 2013, as your Lordships will remember, the then Prime Minister announced that if a Conservative majority Government were to be elected, they would deliver an in/out referendum—a policy which was in the Conservative Party manifesto. The people voted for that Government, and MPs then voted—by a majority of six to one—to hold a referendum. In the referendum campaign, the Government made it clear that they would respect and implement what the people decide. The referendum itself delivered a bigger popular vote for Brexit than that won by any UK Government in history. The people have therefore voted twice: once for a Government to give them a referendum and then in the referendum itself. Parliament voted to give them that referendum without any conditions attached as to the result.
I heard what my noble friend Lord Higgins and the noble Earl, Lord Sandwich, said about their being non-believers in referendums in our parliamentary democracy, but that argument was meant for when Parliament and this House were debating the referendum itself. I hear what has been said but think that it is now an argument for another day.
Regarding the role of referendums in our parliamentary democracy, I think that my noble friend Lord Lang quoted that noted jurist and constitutionalist, AV Dicey. I too would like to quote AV Dicey. Back in 1911, he wrote that the referendum is the only institution that could,
“give formal acknowledgement of the doctrine which lies at the basis of English democracy—that a law depends at bottom for its enactment on the consent of the nation as represented by its electors”.
The referendum, he wrote,
“is an emphatic assertion of the principle that nation stands above parties”.
I turn now to the actual process of triggering Article 50. It is the rule of law—the principle that I referred to earlier—that has guided the Government’s approach. I am certainly in agreement with paragraph 9 of the Constitution Committee’s report: Article 50 is the only lawful route through which the United Kingdom can leave the EU under the treaties. As a matter of policy, the Government’s view is that, once given, our notification will not be withdrawn. We are committed to leaving in accordance with any legal and constitutional requirements that may apply. The Government have outlined their case and what we believe is the right and proper process to leave the EU under domestic law following established precedent with regard to international affairs.
As your Lordships will know, we have argued that triggering Article 50 is a prerogative power and one that can be exercised by the Government. It is constitutionally proper to give effect to the referendum in this way. As such, we disagree with the judgment of the High Court in England and Wales and are appealing that decision. The Government therefore await the final decision by the Supreme Court and, as I have said, we will abide by its decision. Let me repeat once again: the Government fully respect the independent role of the judiciary in deciding those cases.
I hope your Lordships will understand if I refrain from entering any further into the specifics of the ongoing legal challenge. There will be a hearing in the Supreme Court beginning on 5 December. It is expected to last four days, and a judgment will be reached in due course after that. But whatever happens in the Supreme Court, there will be further parliamentary scrutiny before Article 50 is triggered. We have been making time available for a series of Brexit-themed debates in the other place and in this place which will allow Parliament to make its views clear on a variety of topics. We welcome this House’s likewise debating this but I also note—how could I not?—the recommendations in the report and the numerous contributions made from all sides of the House today regarding the Government’s approach to the negotiations and the scrutiny of our position before those negotiations —or stage 1, as the noble Earl, Lord Sandwich, called it—and furthermore, as he rightly said, the application of the lessons learned from the debates held in this place and the other place and the extensive consultation that the Government are having with business. There were a number of powerful contributions on that point, especially from the noble Lords, Lord Kerr, Lord Teverson, Lord Maclennan and Lord Hannay, and the noble Baroness, Lady Suttie, to name just a few. Naturally, when we trigger Article 50, we want people to be aware of our overall approach, not least to give as much certainty and clarity as we can, and to build a national consensus.
I am sorry to disappoint the noble Lord, Lord Kerr —one of his balls is disappearing into a hedge. I am sorry that all I can say at this stage is that we have noted the calls for this and we will consider the best approach, taking into account what has been said in today’s debate and in the Select Committee’s report. The issues around Brexit, as I have said at this Dispatch Box before, are indeed highly complex, as the noble Baroness, Lady Hayter, said. They deserve very careful consideration, including as the Government continue to consider the customs union.
One of the issues raised in a number of noble Lords’ speeches is, for example, a transitional arrangement. I and my ministerial colleagues are fully aware of this issue in discussions that we have had with representatives of the financial services sector and of other industries right across the board. We have said that we wish the process of Brexit to be as orderly and as smooth as possible—a point which my right honourable friend the Prime Minister repeated at the CBI yesterday. We very much hope that our European partners will also see such an approach as in their interest too, as trade is obviously two-way. I assure your Lordships that we are looking at this issue among all the others that have been raised.
I would also like to address the point that a number of your Lordships made, including my noble friend Lord MacGregor—the position of EU nationals in the UK and UK nationals there. I would draw his and your Lordships’ attention to what the Prime Minister said at the CBI yesterday—that she wants an early agreement in the status of UK nationals in Europe and EU nationals here.
As regards the process of drawing up our negotiating position—
Lord Hannay of Chiswick
I wonder if the noble Lord could come back yet again to a suggestion that was made in this House several times but that the Prime Minister did not cover, which is to say clearly that we on our side—the United Kingdom—will not call into question the rights of EU citizens in our country unless anyone else does that to our citizens. If we were to say that, it would make it quite clear, beyond peradventure, that we were not going to raise that issue in a negative sense. Why cannot we say that?
Lord Bridges of Headley
I hear the point that the noble Lord makes with his considerable experience. All I would say is that the Government’s position is clear and, as I said, the Prime Minister wishes to have an early agreement on this issue. I cannot go further than that right now.
I would like to go on to refer to a couple of points that the noble Baroness, Lady Suttie, and the noble Lord, Lord Maclennan, made about the involvement of the devolved Administrations in the process of establishing our negotiating position. As has been said before, we will give every opportunity for the devolved Administrations to have their say as we form our strategy and we will look at suggestions that they put forward. As regards mechanism, the joint ministerial committee has been set up to enable discussions with devolved Administrations and government and has started to meet.
I turn to parliamentary scrutiny once Article 50 has been triggered. There are three strands of activity that I am sure Parliament will wish to scrutinise: the process of the negotiations themselves, the outcome of those negotiations and the passage of the great repeal Bill.
I start with the scrutiny of the negotiations. I welcome the fact that your Lordships, especially the Select Committees, are thinking hard about how your Lordships can co-ordinate scrutiny of my department’s work and the negotiations overall. Clearly, the Commons Select Committee for Exiting the EU as well as your Lordships’ EU Committee and its sub-committees will play crucial roles. But as the EU Select Committee report highlights, the issue of what information should be made available, and when, is a matter that we clearly need to agree upon. We have committed as a Government—and I commit again here—that Parliament will have access to at least as much information as members of the European Parliament. That is a point that my noble friend Lord Higgins referred to, as did the noble Earl, Lord Kinnoull, and the noble Lord, Lord Beith.
The EU Select Committee’s report goes into helpful detail in exploring what information the European Parliament will receive. I am very grateful for that. I assure your Lordships that my ministerial colleagues and I are considering the mechanisms for transmitting this information in such a way as to ensure that there can be timely debate and scrutiny on the negotiations, while at the same time ensuring that complete confidentiality can be maintained. For example, we are closely watching the recently opened TTIP reading rooms to see what the advantages and disadvantages of this approach are. Of course, we do not yet know the extent to which the previous and most relevant precedents will be followed by the institutions of the EU, not least because there is no direct precedent for an exit negotiation of the kind that we are about to enter into, so we do not yet know precisely what level of information the European Parliament will receive. However, your Lordships should be in no doubt that we will honour the commitment that my right honourable friend the Secretary of State gave to the committee.
The noble Earl, Lord Kinnoull, referred to the role of Select Committees in this House and the co-operation between them. I am aware that the Senior Deputy Speaker—the noble Lord, Lord McFall—and the Liaison Committee, which he chairs, have been on the front foot in seeking to ensure that the work of your Lordships’ committees benefits from closer than normal communication and co-operation between committees. He has established an informal forum in which the chairmen of the relevant investigative and legislative Select Committees will share notes to try to avoid unnecessary duplication of effort. The Government stand ready to lend their assistance to this forum, as well as to continue to talk directly to the committees themselves, when called upon to do so. I will certainly reflect on the noble Earl’s points about the media and communications.
As regards the end of the negotiations, as I have said before, the Government will observe in full all relevant legal and constitutional obligations that apply. The precise timing, terms and means by which we leave the EU will be determined by the negotiations that follow the triggering of Article 50. The Government, though, are very clear about the obligations of the Constitutional Reform and Governance Act 2010. That Act is clear that both Houses of Parliament have a role in approving treaties as set out in the Act, which is a point my noble friend Lord Inglewood raised.
The noble Lord, Lord Beith, referred to the great repeal Bill. This will be a significant piece of legislation. As with any legislation, parliamentary scrutiny is invaluable, and it will certainly be invaluable on this. We are indeed considering the very best approach to ensure that Parliament, including the various committees, has the appropriate opportunities to scrutinise the Bill. We will set out the content of the Bill in due course and the best approach to involving Parliament in a meaningful way in what will be a very important piece of legislation.
There are a number of other excellent points in these reports which bear close consideration. My noble friend Lord Balfe and others talked about the role of this Parliament and others in creating close links with the European Parliament. I should mention that my right honourable friend the Secretary of State was in Brussels today talking to MEPs. I entirely endorse the points that were made in the committee’s report about the role that Parliament can play in this process.
The electorate’s decision to leave the European Union was indeed a pivotal moment in our nation’s history. As the noble Baroness, Lady Smith, said last week, the role of Parliament is clearly not to block Britain’s departure but to scrutinise the steps that the Government now take in delivering it. The issue at hand is the balance we strike between, on the one hand, transparency and accountability, and, on the other, protecting the national interest and not binding the Government’s hands. Getting this balance right is something that the Government are completely focused on. From this debate, I know that your Lordships are very mindful of that. Each of us knows the responsibilities that we have in this House to kick the tyres of government policy, which may be uncomfortable for those of us standing at this Dispatch Box. But each of us also knows that, as Members of an unelected Chamber, there are limits to what we might do. In the weeks and months ahead, I am sure that your Lordships will reflect carefully on getting this balance right, as the Government most certainly will do.
I remain committed to working with your Lordships and involving this House as much as we can in the months ahead. I once again thank all those who have spoken tonight, and I thank above all those who have contributed to the work of the committees for their contributions to the debate. I am sure that there will be more to come.
Lord Lang of Monkton
My Lords, there is another debate waiting to start and the hour is advancing so I shall have to be brief. Fortunately, and happily, the reply that my noble friend the Minister has just given to the debate was so comprehensive and thorough that my task is made very much easier. I thank him for that on behalf of everyone who has spoken in the debate, and for the energy and commitment that he has shown throughout the time he has occupied this position on behalf of this House’s interest in Brexit matters.
This has been a serious and well-informed debate and I thank all those from all parts of the House who have spoken, particularly the leading spokesman for the Liberal Democrats the noble Baroness, Lady Ludford—and, for the Labour Party, almost on her own until the very last minute, the noble Baroness, Lady Hayter. We heard particular expertise from the Cross Benches, which we almost take for granted but value very much indeed. I am grateful that each committee’s report was well received, not just by those members of the relevant committee who had helped to write it. We tried very hard to get them right. It is encouraging if the House thinks that we did.
As well as the many familiar points that were made during the debate, lots of individual, interesting, specific and new points were made that are novel and worth pursuing. That makes the debate more worth while than it might otherwise have been, and so does the fact that there was not complete unanimity on every single aspect of what was debated. There have been many variations on a theme but I think the central message that came through came from the speech of my noble friend Lord Boswell of Aynho right at the beginning, when he said that the Government must make a positive commitment to engaging with Parliament. That sums up a lot of the sentiment expressed in the course of the last few hours. I earnestly hope that today’s debate and the two reports may contribute to improving the handling of our nation’s approach to Brexit and to what follows.
Brexit (EUC Report)
Lord Boswell of Aynho
That this House takes note of the Report from the European Union Committee Brexit: Parliamentary Scrutiny (4th Report, HL Paper 50).
Lord Boswell of Aynho (Non-Afl)
My Lords, this has been a long and intensive debate and I need add very little. I express my personal thanks to the noble Lord, Lord Lang of Monkton, and his committee and to all those who have participated in the debate, which has opened new chapters in the complexity of this matter as well as rehearsing many of the old ones and the principles under which we should go forward. I thank the members of my own committee for their role in preparing our report. I also thank our staff, who are always exemplary in producing order out of chaos and confusion, as I have not had a previous opportunity to do so. We have a sense tonight of order behind this. Finally, I commend the Minister, to whom I referred in my earlier speech, for exemplifying his continuing commitment to getting these very difficult issues right. That is the right spirit in which to embark on this.
In this month when some of our thoughts are perhaps across the pond with the United States, the Minister may remember the anecdote of the former President Coolidge, who found himself seated on the left of a lady at a dinner, who made it very clear that she was under a wager to get four or more words out of the President, to which he responded, “Madam, you lose”. All I would say to the Minister is if, by peradventure, Her Majesty’s Government should find themselves continuing with such a situation, through either terseness or coyness, we would all be the losers because we need an element of engagement, which I hope this debate has brought tonight. In that spirit, I beg to move the Motion standing in my name on the Order Paper.
Agricultural Sector (EUC Report)
(8 years, 1 month ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Scott of Needham Market
That this House takes note of the Report from the European Union Committee Responding to Price Volatility: Creating a More Resilient Agricultural Sector (15th Report, Session 2015–16, HL Paper 146).
Baroness Scott of Needham Market (LD)
My Lords, I am grateful to have the opportunity this evening to debate our report on such an important issue for our farming sector. In one way I rather regret that it has taken so long to find an opportunity to debate this, but the fact that our report predates the referendum adds a different dimension to our work. I had the privilege to chair the EU Energy and Environment Sub-Committee for three years, and I can honestly say that it was the most rewarding work I had done in my 16 years in the House. I therefore thank each of the members with whom I served, including those who, like myself, have been rotated off. However, I will mention two noble Lords in particular.
First, I thank the noble Lord, Lord Boswell of Aynho, chairman of the European Union Committee. His leadership and encouragement on the main Select Committee was invaluable, and I am certain that he will continue to be as supportive to the current EU sub-committee chairs as he was to me. His wisdom and experience will be much needed by the House as we approach this immensely complicated challenge of withdrawal from the EU. Secondly, my noble friend Lord Teverson is now chairman of the sub-committee. I have no doubt that as chairman he will lead it through these challenging times and ensure that it plays its proper role in informing the debate on Brexit. I also place on record my admiration of and thanks to the committee clerks, policy analysts and committee assistants with whom I worked. Without their skill and total commitment to the role of this House, we would not be able to function. Finally, special advisers are often the unsung heroes. In this case I thank Dr Dylan Bradley and Professor Berkeley Hill.
As your Lordships may know, the remit of the sub-committee I chaired includes not only agriculture but fisheries, environment, energy and climate change. While the topic of this report was agriculture, it went much further. Like many of the inquiries we undertake, it was cross-cutting, and the evidence led us to think as much about the environment and rural development as it did about farming.
The report was published on 16 May and its title, Responding to Price Volatility: Creating a More Resilient Agricultural Sector, summarised the motive for conducting the inquiry and our main findings. Our headline recommendation was that the European Commission should consider restructuring the common agricultural policy and focus it mainly around the provision of public goods, aiming for an eventual merger of the two pillars that currently govern direct payments on the one hand, and rural development on the other. We were of the firm view that wherever possible, agricultural policy should facilitate the provision of public goods, such as a well-managed environment. Those conclusions hold as well for life outside the EU as they do for life in it.
We found that price volatility is an inherent feature of agricultural commodities markets, and that adverse effects at farm level are caused much more by unanticipated periods of sustained low prices than by increased levels of volatility. This was a significant conclusion because it leads to different recommendations. We examined the issue of direct payments and found that although they continue to provide a degree of financial stability, helping farmers to withstand protracted periods of low prices, they can also reduce incentives for innovation and efficiency gains.
We drew another significant conclusion on insurance. We heard from some that the US insurance model could be adopted in the EU as an alternative to Pillar 1 arrangements under the CAP. I was perfectly open to this possibility, as I think other members of the committee were. However, having heard all the evidence, we strongly concluded that while insurance undoubtedly has a role to play in unexpected and catastrophic events, the case for a wider application—as a replacement for Pillar 1 or as a future outside the EU—was simply not convincing.
We highlighted that much more work needs to be done by the UK Government and the European Investment Bank in developing and adopting appropriate financial instruments, which may help farmers access much-needed finance. Significantly, we also drew attention to the desperate need to equip farmers with improved business skills and the expertise to calculate and manage their production costs and overheads. We also recommended that the UK Government work to identify the main barriers which prevent farmers exiting the sector.
The official response from the European Commission was received in July, and the Commissioner described our work as,
“a valuable input to the upcoming discussion on the Common Agricultural Policy post 2020”.
The fact that he wrote that after the referendum suggests that it really was positive, whatever the future for British agriculture. The Government’s response noted that, following our vote to leave the EU, the Government would work with the industry to,
“look at a future package of measures and support for farmers and the environment”.
Their response continued:
“It is premature to say what that might look like, but the Government will be mindful of the Committee’s recommendations as we develop a new policy and funding framework for UK farming”.
This is encouraging for the committee. I would be grateful if the Minister shed further light on how this new thinking has developed some five months later.
We were also encouraged that the response included an agreement that an agricultural policy must deliver public goods, and the assurance that the management of natural resources will be considered when the Government begin to,
“look at the future of farm support in the UK”.
It was also acknowledged that the Government recognise the concerns about barriers to exiting, as well as to new entrants to the sector. I am also told that the Minister of State, George Eustice, has since written to the committee explaining that the Government will use some of the so-called exceptional adjustment aid made available under the CAP in response to the persistent challenges faced by dairy farmers, and that they will be trained in new risk management tools and benchmarking skills, as the committee’s report suggested.
I note with interest that the Government’s response gives an assurance that they will consider the recommendations emerging from the Commission on access to financial markets and risk management tools when developing domestic alternatives to the CAP. That task force has now reported, so I would be grateful if the Minister clarified the Government’s response to that work.
There is no doubt that there are immense challenges ahead for the agricultural sector. There is uncertainty about the new UK agricultural policy and about what a trading regime for agricultural and foodstuff products with the EU and the rest of the world will look like. Together, these two concerns underline an immediate need for UK farmers to develop better resilience to future price shocks and market developments.
Reviewing and replacing the CAP could be an opportunity for the UK to develop an agricultural policy which promotes competitive and environmentally sustainable farming. It could be an opportunity to move away from direct payments towards a system that gives farmers subsidies to deliver certain public goods, such as environmental stewardship and high animal welfare standards, as suggested in the committee’s report. It could also be an opportunity to think afresh about how to create a more resilient, innovative and effective agricultural sector. There are real concerns for farmers: some 55% of total UK farm income comes from CAP support. Farmers and rural communities across the UK receive substantial and essential funding for agri-environment projects, farming and infrastructure projects from both Pillar 1 and Pillar 2. These will all need to be replaced by similar UK schemes, or they will fall away once the UK withdraws. I welcome the Chancellor’s statement on 13 August, in which he guaranteed that current levels of support would remain until 2020. That gives some short to medium-term comfort, but of course, it does not address the longer-term problems in an industry already beset by volatility.
Another challenge is that of trade in agricultural goods once the UK has left. Nearly two-thirds of UK agricultural exports measured by value go to the EU, while 70% of agricultural imports measured by value come from the EU. Food supply chains are immensely complicated nowadays. Some components of processed food products start their life cycle in the UK, are processed in another member state and then return to us for consumption. Any change arising from those trade patterns is bound to impact on UK farmers as well as the wider food processing industry.
In leaving the single market, we will leave the rules that govern our current trade arrangements with the EU and with the world. The EU’s external tariff barriers on agriculture and food are high, and in the absence of a preferential trade agreement with the EU, the UK agriculture and food sector could find itself subject to high import tariffs and reducing exports. In fact, tariffs affect the whole supply chain because they cover both imported products and inputs such as machinery, feed and fertilisers. I do not underestimate the potential for negotiating future trade agreements with the wider world but as recent examples have shown us, free trade agreements take a very long time to negotiate and are immensely complicated, particularly in the area of agricultural goods. Therefore, there will be added uncertainty for UK farmers about the future of their imports and exports post-Brexit.
The agricultural and farming sector is vital to all of us. As a society, we are dependent on a secure, affordable and high-quality food supply, as well as on the public goods which farmers deliver. Rural communities across the UK are still sustained by the agricultural sector, the funding it receives and the jobs it creates. So now, more than ever, the agricultural sector needs certainty and political clarity to strengthen its resilience. I encourage the UK Government to deliver on these points as a matter of urgency.
Baroness Byford (Con)
My Lords, it is a great pleasure to follow the introduction by the noble Baroness, Lady Scott of Needham Market. I was lucky enough to be one of the people who served under her chairmanship on several different reports. Some of the comments that come through this last report reminded me of one of our early ones, on innovation in agriculture. One of the key challenges of that was about how we get knowledge and good practice transferred from science to normal working on-farm. I was quite interested looking through the report to find that again reflected.
The noble Baroness and her committee really are to be congratulated on their report, which looked at price volatility and creating a more resilient agricultural sector. The recommendations were concluded before the June referendum result, as has been referred to, and hence the findings are even more key than they were at the time of publication, because clearly now we have an additional challenge.
Yesterday’s torrential rain can leave nobody in any doubt that climatic fluctuations are becoming a more regular feature. They are one of the causes of price volatility. When considering this, the committee felt that subsidised insurance schemes should not replace the current provision of direct income support through CAP. Following the decision to leave the EU, the Government will need to work with the industry to consider other methods for future insurance schemes, as the noble Baroness has referred to. In their response to recommendation 2, the Government confirmed that Defra has already set up the facility to give grants of up to £20,000 per farmer, available through the farming recovery fund. Could my noble friend the Minister clarify whether these payments are available immediately after a natural disaster, or whether there is a delay? My understanding is that there is sometimes a delay, which puts huge pressure on those farmers who are directly affected at the time.
Price volatility in agricultural commodity markets undermines the ability of farmers to make investment plans with confidence. Longer periods of low prices have resulted in the reduction of livestock herds, most noticeably in the dairy industry where farmers continue to exit the business, or in the switching of crops grown for food or fuel. These are some of the considerations facing farmers when taking decisions about future investments. As has been said, farmers take a long-term view. New buildings, machinery and diversification schemes all come at a price; uncertainty and lack of confidence in future profit make those decisions even harder.
I apologise; I should have acknowledged at the beginning that we have family farming interests and we receive the basic farm payment.
Neither the Commission nor the UK Government is solely responsible for providing information support. Those in the farming community, both here and in member states, have opportunities to help each other, through co-operatives, marketing products, and closer chain links between the food grown on-field and that eventually ending up on the plate. The AHDB, RASE—the Royal Agricultural Society—and its Innovation for Agriculture charity all have a part to play. If one is looking for added value, one could turn to organisations such as LEAF, of which I have had the great privilege of being president for the last year. Value is added to the goods produced and is recognised easily by the purchaser. These organisations promote high-quality, healthy food, something which all of us could aspire to.
The key to creating future resilience will come from science and technology, as referred to in the report. If anybody happened to be here last week listening to the Chief Scientific Adviser, Sir Mark Walport, as I was, they will realise what an important key to volatility and to the long-term future the whole question of science and technology can be. Within that is the question of how you manage risk.
In relation to recommendation 11, the Government’s response to funding of the agriculture sector reminds us that this Government have invested some £300 million from the public sector, alongside some £500 million being invested from the private sector. One of the things that comes out clearly from the report, which I was really pleased to see, is that it is looking to a future where both sectors work closely together. It is not a question of one source of funding being provided by the Government while farmers do the rest. There is a definite blending of the two, for the benefit of the whole.
Additionally, we have help from the UK agricultural tech strategy; £160 million is allocated to this, of which £77 million has already gone to 100 projects. It is key that the data from these projects and from other research are shared, available and passed down to farmers to enable best practice. One of the big challenges perhaps not picked up in the report, which I would like to have seen, is the question of how we get that information to the very hard-to-reach farms. So often the smaller farms—which are on their own and do not have big business plans—are the very ones needing that sort of help. Unless I missed it in the report, that was one aspect about which I thought, “I wish, I wish”.
We are obviously waiting for the Government’s 25-year plan for food and farming and their plan for the environment. I hope that the Minister may be able to say a little more about that in his winding up.
As we all accept, volatility is here to stay. The most important thing is that we build in risk provision to try to alleviate it in planning our forward businesses. The committee also quite rightly recognised the difficulty of forward planning for tenant farmers. It recommended that longer-term tenancies would aid those tenant farmers in seeking diversity and strengthening their stability. As the noble Baroness said, it also reflected on retirement schemes and equally, at the other end, on the encouragement of new entrants. To digress a little bit, I would particularly like to congratulate my noble friend Lord Plumb, who is not in his seat tonight, who has instigated a very good mentoring scheme and the welcoming and admitting of new young people into the industry. If I were looking at the other end, I would also mention the Addington fund, which helps people when they are retiring to find somewhere to retire to. At the same time, it often provides for little units in which they can continue to do some form of work. There are things going on in this country and I am sure in Europe too, which the committee could not cover. I hope the noble Baroness will not mind my having added them in my contribution tonight, because it is extremely important that we are aware of what goes on outside as well.
I mentioned science and technology. It offers us a chance of better animal breeding programmes, of tackling the big challenge of disease control with animals and with plants, of the better use of soil and water, and— if I might say it again—the ending of the appalling waste of food that we have seen. Again, I congratulate Sub-Committee D on its excellent report. A third of the food that we produce is wasted. If we are trying to restrain the amount of volatility that there is around, one good way would surely be to use the food we produce in a better way and reduce waste.
I congratulate the Select Committee. The questions that it has posed, both on the Commission and on government here, are very apt and very timely. I suspect that the response will be slightly different from what it would have been had we had this debate before the June referendum result was known. However, the use of public money and the input from our own financial institutions, the political decisions that affect volatility—I think of the Russian trade ban, which has had implications over recent years—and the way in which we can work together to produce food in the long term are all hugely important.
The noble Baroness talked about the importance of insurance and how we might deal with that, as well as the importance of future financial development. I was very pleased to get some facts and figures on the loans that our banks have been making. Some £24 billion is available to farmers, of which about £17 billion has already been called upon this year. The work of banks, including the European Investment Bank, is crucial when looking at how to build sustainable and productive farming in the future. Ultimately, the goods that we produce are not just about the environment; they are about the basic necessity to produce food for all of us to eat. The way in which we do this is hugely important if it is also to be of benefit to the environment.
The committee has done an excellent job in bringing things together for us to reflect on tonight. I am sorry that I have been able to touch on only a few of the aspects, but there is much in the report and, through the noble Baroness, I congratulate and thank the whole committee. I look forward to the Minister’s response.
Lord Teverson (LD)
My Lords, I should like to record what a privilege it is for me to take on the chairmanship of this committee and what a privilege it is to have followed my noble friend Lady Scott of Needham Market, whose reputation, work and leadership on the committee were absolutely excellent.
This report is, in a way, the last of a series of “own initiative” reports, because at the moment we have a programme of Brexit reports which are taking up all our time. I hope that we are about to complete our report on fisheries, and that will be followed by reports on the environment, agriculture and energy security. I think that that will keep us busy for the next few months.
Without wanting it to sound as though too many congratulations are being expressed around the House, I was delighted to hear that the noble Baroness, Lady Byford, had become president of LEAF, an organisation for which I have huge regard, having seen some of its work in the past in Cornwall. I wish her well in that role.
Price volatility and natural disasters and events are part of agricultural life. As the noble Baroness mentioned, in the south-west, where I have my home, we are again experiencing a series of floods, which affect the agricultural community even more than many other sectors of society.
Intervention used to be one way in which the European Communities dealt with price volatility. My business career was in supply chain management and the freight industry. I remember operating a cold store in the 1980s. We had some space in it which our contracted customers were not using, so we thought that we would put in a pitch for a bit of European intervention storage. The great thing was that we got a fantastic revenue boost from that, but that was not all, because a full cold store is far cheaper to operate than a half-empty one, so we saved costs as well. I express a public thank-you to the 1980s European taxpayer for the great amount of money that we made out of that. That is why that system had to end as a regular feature. We all remember the wine lakes, the butter mountains and the intervention milk powder that occurred at that time.
However, as my noble friend Lady Scott said, at the moment there is some emergency intervention, which has been approved by the Government. The Minister, George Eustice, came back to the committee and referred to this report, and some of the intervention money will be used in some of the more creative intervention ways. Therefore, I think that the committee has already had a success in that area, and I welcome the Government’s response in that regard. I shall not talk at great length on this issue because, although it is important, it is not my report.
I particularly liked the move towards innovation in the report. I had not even thought about the financial instruments that could be used. They may be limited, but it is important that managers in the agricultural sector think in that way, as having those tools is very important.
Management in this area, as in any business, is absolutely crucial. One particularly important thing that I have certainly seen in Devon and Cornwall is not just management and management plans, which can be very dry, but the ability to understand and deliver marketing and to understand added value, as well as the ability to find niches in markets. It is important not to be an accepter of prices for commodities within agriculture but to produce products that are special and are of added value to consumers. That is one of the key areas where there is still much to be learned.
As my noble friend said, Brexit has come through since the report was published, and there will be huge challenges. I cannot believe that we will have regular area payments much beyond 2020. I cannot see British taxpayers putting up with that system as it is at the moment. It will just have to change—the pressures will be too great—and this report is even more important in that context. Regrettably, we may not be able to take advantage of the European Investment Bank. I hope that we will, although I cannot see that we will be a shareholder and have board membership of the EIB. However, I hope that there will still be ways in which we can exercise those funds.
We really do have a challenge as we move agriculture beyond the European Union, but I think it is one area where there are huge opportunities for improvement in the Brexit settlement. That will be the subject of a report of this committee, on which I look forward to the contribution from my fellow members in due course.
The Earl of Kinnoull (CB)
My Lords, it is a pleasure to follow the noble Lord, Lord Teverson, who, as ever, was energetic and interesting. I declare my interests as set out in the register of the House, and in particular as a recipient of EU farm subsidy, both personally and as a trustee of the Blair Charitable Trust.
I also congratulate the noble Baroness, Lady Scott, her committee and their clerking staff on a very thought-provoking and excellent report. I note that all the issues teased out in the report are still very much live following the June vote. It is a wide-ranging report, but I shall make just three points tonight.
The first is in respect of recommendation 4, which would see a scheme that enables farmers,
“to save in times of plenty and withdraw in times of need”.
It was heartening to read in the Government’s response what I certainly interpreted as general enthusiasm, and certainly what seemed to be praise, for the Australian farm management deposits scheme, which goes a good deal further in providing support to protect farming than our own current tax averaging measures.
Of course, there is another volatile business operating in the UK, which has done so for hundreds of years, that is important to Britain and which has an excellent method of allowing participants to save in times of plenty: my own alma mater, Lloyd’s of London. The personal reserve funds system has been successfully in place for decades. I cannot help but think that something closer to this, rather than the tax averaging scheme, would be immensely beneficial to the farming community. It is well understood by the Revenue, and I dare say it is understood by one or two farmers as well. Can the Minister confirm that this analogous and successful situation will be considered when—and I quote from the Government’s response to the report—
“Going forward, the Government will work with industry to develop new arrangements for agricultural support”?
My second point relates to recommendations 7 to 9, which are all about new financial tools. I have spent a lifetime in the City surrounded by financial tools, and therefore I have a pretty clear idea about who often makes the money out of these tools. I am of course very worried about that. I therefore plead that any tools that are dreamed up are very simple. I must say that the vast majority of farm offices will be like ours—ours is in the kitchen and takes place usually on Sunday mornings; it is not well set up for analysis or a complicated financial tool. I certainly would be worried that these tools could be vehicles for egregious profit by the private sector. In other words, we do not want the lions of Goldman Sachs to eat the shepherds of Perthshire.
I observe that there are already two types of volatility to be addressed. The first is market volatility. I feel that the personal reserve scheme, similar to the Australian one and indeed our own Lloyd’s arrangements, would be a very good start for dealing with that. The other volatility relates to natural perils, which is a fancy way of saying storms and floods—another area I have spent a lifetime fiddling around in.
About 10 days ago, the Minister and I had a brief exchange about Flood Re, a new government-backed scheme that provides effective and cheap insurance to private home owners in flood-prone areas. The scheme only started in April this year, and the Minister has reported to the house that 53,000 policies have already been ceded to Flood Re. It is a collaborative system between the insurance industry and government. It is very interesting and, at this early stage, appears to have borne fruit. The noble Baroness, Lady Scott, touched on my second point, but would the Minister agree with me concerning Flood Re, and would he feel that this might be the basis of an approach for the farming community going forward to manage the natural perils risk?
My third and final point concerns recommendation 11. Here, the noble Baroness, Lady Byford, was ahead of me a bit. The recommendation concerns agricultural research. I note again the very warm statements in the Government’s response, and I commend them for that. I am a great believer in research.
This evening, there has been no mention of the forestry industry in the UK, with its more than 40,000 jobs, and adding, as it does, more than £1.7 billion to the UK economy every year. I should say that, only a few months ago, I would have had to declare an interest as a member of the council of the Royal Scottish Forestry Society, but I came off that just over a year ago. This industry, which I love, is greatly threatened by tree disease, pests and the grey squirrel. I have to declare another interest as the chairman of the United Kingdom Squirrel Accord, which consists of 34 UK bodies including the Governments, the main governmental bodies, and voluntary sector and private bodies, and is trying to deal with the squirrel problem. Trees between the ages of 10 and 40 are being killed off by grey squirrels ring-barking trees, and this affects up to 70% of plantations. This has effectively stopped forestry plantations of broad-leaf trees on a commercial basis in the south-east of England. The disease, pest and grey-squirrel issues are examples of issues that we can respond to through scientific research—something that I know the Minister is very well aware of and I have had many discussions with him about it.
So I close by asking the Minister whether he agrees with me about the importance of recommendation 11, and whether he would give some hope to the forestry industry that their case for research money to deal with their threats is under consideration.
Lord Trees (CB)
My Lords, it is a pleasure to contribute to this debate led by the noble Baroness, Lady Scott. I would like to acknowledge her leadership of the committee, on which I have been privileged to serve, and her leadership of this inquiry. As a new boy coming to this House, it was my first committee and she has certainly taught me how to chair a committee.
Farming is and always has been a challenging business, but the industry has been under particular pressure in recent times. This debate is not about Brexit—noble Lords may be grateful for that—and it is probably true to say that, while Brexit may focus and accelerate changes in farming, a major evolution of the industry is inevitable and would have to happen anyway.
In the EU Committee report, in which I participated, the challenges of agricultural economics divide into two issues: what I think of as macro issues, which are beyond the control of individual farmers, and micro issues, over which farmers have some control. With respect to the former, our report highlighted a number of major issues. These include, among others, politically motivated policies such as the recent sanctions against Russia, which impact international markets and adversely affect market opportunities; adverse weather events; and changes in international demand, for example the reduced demand in China for milk and milk powder. In these instances there are good reasons for Governments to intervene and introduce mitigation measures. Immediate aid may be occasionally justified—for instance, the recent EU package of €1 billion in two tranches in 2015-16, particularly for the dairy sector, which was very welcome. But, as our report recommends, they are justified only in certain situations.
There are, however, more structural measures that can be introduced to aid farmers to cope with price volatility. Tax averaging, which was announced in the 2015 Budget, is a welcome means of smoothing the adverse year-on-year fluctuations in the profitability of farming enterprises. Another measure, not yet available but which was alluded to by my noble friend Lord Kinnoull and which was highlighted in the committee’s report, is the creation of public investment deposit schemes. This is a financial measure to allow farmers to bank profits in good years, earn interest and then withdraw funds in bad years to top up income. This seems a very fair and reasonable mechanism and has, for example, been introduced in New Zealand as the income equalisation scheme and in Australia as farm management deposits. Have Her Majesty’s Government seriously considered the possibility of introducing this type of scheme here?
Certainly the biggest cushion against price volatility are the direct farm payments paid under CAP. In England, the Farm Business Survey indicated that in 2014-15, 56% of farm income was derived from direct payments under CAP. Let me make it clear that I have huge respect and admiration for the hard work and commitment of our farmers, but, as has already been said, this degree of subsidy and the reasons for which it is given are increasingly difficult to justify. It is likely that the scale and nature of this support will change post-2020 and that other solutions for coping with price volatility will be essential.
Turning to the micro issues over which farmers have some control, it was clear from our inquiries that the economic efficiency of farms in the UK is highly variable. We also heard evidence that price volatility is no bigger a problem now than it was historically; rather, the major problem recently has been sustained low prices, as the noble Baroness said. The costs of production vary substantially between enterprises, which means that the more competitive can withstand lower prices while others struggle. It was even suggested to us that the levels of subsidy have not been helpful in incentivising innovation and increases in efficiency. One notes, for example, that total factor productivity in agriculture in the United Kingdom has risen markedly more slowly over the past 20 years than in other comparable countries, including some within and others outwith the EU.
Key measures to enable greater efficiency have already been mentioned by other noble Lords. They include increased advice and information with respect to both the technical and business aspects of farming, greater communication of exemplars of best practice and the benchmarking of key parameters such as costs of production. Some of these can be achieved by farmers operating co-operatively, although we heard that on occasion there was some reluctance to share commercial data—which may be understandable but is self-defeating. Some of this knowledge transfer is achieved through national systems and consultancy services, but, where farmers have to pay for services, their uptake may be less than optimum. The example of Menter a Busnes in Wales is impressive and I note that generally the organisation does not charge farmers for its advice; it is funded by winning competitive tenders from the Welsh Government or the EU.
Notwithstanding measures to increase competitiveness, it is a sad reality that some enterprises will cease to be viable, as indeed has already happened. The chill wind of economic pressure will surely blow even harder in the coming years, but it is incumbent on us to mitigate the social consequences of that while moving to a more sustainable industry. In that respect, what are the Government doing to enable those farmers who wish to leave farming to do so with dignity and with appropriate support which recognises their profound historical contribution to our country?
Farming support from the taxpayer will increasingly move to support the important provision of other public goods, as has been referred to by several noble Lords. This will justifiably recognise and reward the crucial role of farming in the stewardship of our countryside as well as buttressing the rural economy. But we also should not lose sight of the critical role of farming in producing food of quality to high environmental and animal welfare standards. Research and the application of research into such things as GMO, improved animal health and precision farming, among other things, offer great opportunities to maintain or increase food production while freeing up land for other public good purposes.
Our food is incredibly cheap and we need to recognise that and value it more. We waste obscene amounts of food in the home—as an earlier speaker mentioned—with a report by WRAP estimating that by weight some 70% of UK post-farm gate food waste is produced by households. In the pursuit of even cheaper food it is tempting to rely increasingly on imports, but in doing that there is a risk of simply exporting poor environmental care, bad animal welfare and exploitative wages, as well as increasing political vulnerability. While we will never be self-sufficient in food, I maintain that it is strategically and economically important that we produce as much of the food we need as possible in a sustainable way, balancing the competing needs for land. That is not only good for food security but enables us to control all aspects of how our food is produced. To this end we need a dynamic, innovative and above all competitive farming industry. I am sure that we have the farmers who can deliver that and meet the challenges ahead.
Lord Selkirk of Douglas (Con)
My Lords, it is a great pleasure to follow the noble Lord, Lord Trees, who has enormous knowledge of this area, perhaps stemming from his experience as a professor of veterinary medicine. Perhaps I may say that it is also a great pleasure to follow the noble Baroness, Lady Scott of Needham Market, who has put so much of her valuable expertise into this report. I declare an interest as the chairman and director of a small family company which owns a number of fields and currently has an interest in possibly one wind turbine. In this capacity I receive a small annual salary.
I start by mentioning that at present there are somewhere in the region of 476,000 employees in the agricultural sector and other closely related areas of work, which is a substantial figure. As well as helping to provide us with a supply of safe and nutritious food, farmers also play an extremely important role in the way our land, the wider environment and the rural economy are managed. Last year, CAP payments to the United Kingdom totalled around £3 billion. After the referendum result, as has been mentioned, the Chancellor promised in August that the Government would replace any financial shortfall suffered by farmers as a result of leaving the EU until the end of the decade. However, farmers will need continuing reassurance that the Government are working on a plan that will give them reliable support into the next decade and beyond. There is also the issue of access to the single market and to the migrant labour on which many farmers depend.
In their response to our report, the Government said that it was premature to comment on what a future package of measures would look like. However, can the Minister give us an assurance that the Government will honour the commitment given by the Prime Minister that British farming, which they described in their response as,
“the bedrock of the food and drink industry”,
will remain profitable, competitive and resilient?
Perhaps I may press the Minister on two aspects of future policy planning which came to the fore as the Energy and Environment Sub-Committee took evidence on how to create a more resilient agricultural sector and formed the series of recommendations contained in the report. I want to concentrate on a subject mentioned also by the noble Baroness, Lady Byford, and the noble Lord, Lord Trees: the call for more efficient ways to spread knowledge gained from research throughout our farming communities. This involves the important issues of benchmarking against external criteria and improved delivery of IT services such as broadband throughout the country. The report recommends:
“The UK Government should identify examples of best practice of knowledge exchange and dissemination wherever it is to be found and actively support them”.
The inquiry found that facilities for the exchange of knowledge and training differed throughout the UK. On page 51 of the report, the committee states that it was impressed by the knowledge exchange services offered by Scotland’s Rural College, which encompasses many campuses within Scotland. The college combines research, education and consultation for rural clients.
Can the Minister report on what progress is being made in this area so as to ensure that when research produces results that could benefit the wider farming community it can be swiftly and effectively broadcast and used to help establish best practice? Is enough encouragement being given to the farming community to promote benchmarking? The report states:
“There is a long term business case for equipping farmers in all parts of the UK with the knowledge and expertise to calculate and manage their costs of production and overheads. Farmers should share their data with their peers to facilitate this benchmarking”.
During the committee’s inquiry we were told that Defra was working on a 25-year plan dealing with food and farming and on another, separate 25-year plan covering the environment. Other evidence received by the committee stressed that agricultural and environmental matters are strongly interlinked. The Minister at Defra, George Eustice MP, agreed that the agriculture plan would touch on environmental matters but said that the environmental plan was,
“the right place to deal with all the environmental issues, including looking at things such as soil, climate change, water resources and everything else”.
However, the committee came to the conclusion that, given the significant connections and interaction between agriculture and the environment, these two policy areas should not be treated as separate entities. It was concerned that there appeared to be insufficient understanding of the way in which the two areas were interconnected and of the value of natural capital, meaning the world’s stock of natural assets such as soil, air, water and all living things.
As a result of the referendum, we realise that there will have to be a pause in work on the 25-year plans. The Government have said that they will now take stock and consider any new arrangements. I note that in their response to the report they say that agriculture and environment policies are interconnected. Notwithstanding the change in circumstances, can the Minister assure us, in so far as he is able to today, that it will still be possible for the Government and Defra to continue to proceed on the basis of developing a highly desirable unified approach to the extremely important areas of agriculture and the environment?
Baroness Parminter (LD)
My Lords, like others, I commend the noble Baroness, Lady Scott of Needham Market, and her committee on this report. Like the noble Baroness, Lady Byford, I was rotated off the committee, but I have benefited from her chairmanship in the past. I thank her for that as I do for the report. There is always a bit of a delay in debating our committee reports. In the case of this one, some rather significant events have taken place in between and a whole new set of challenges has been put on the plate of agriculture that it will have to contend with.
As the committee says, price volatility is an inherent feature of farming and will remain a normal risk to be managed by farmers as part of their business strategy. What is clearly not a normal risk is whether we remain a member of the single market, given that if we leave the EU customs union trade will be subject to tariffs and that, after decades of tariff-free access, prices will inevitably rise.
If we leave the single market, UK farming will be particularly badly hit, given that farmers generally face tariffs that are far higher for agricultural produce than for any other types of goods. Most farms are small businesses operating on tight margins and some, especially in the livestock sector, are dependent on exports. Tariffs can be hefty: 47% on milk, 40% on cheese, 59% on beef and 40% on lamb. Arable producers face levies of 40% on unmilled wheat, and around 10% on fruit and vegetables. It is a huge issue for UK farm businesses, with 82% of our meat exports going at the moment to the EU, as do 75% of our dairy exports and 74% of our cereals.
This is to say nothing of the loss of the protection against cheap foreign imports from which UK agriculture has benefited through high EU tariffs and strict rules, such as those around the use of growth hormones. In particular, the UK beef industry benefits from the protection against imports from countries such as Argentina and Brazil. If we were to sign free trade agreements with other beef-exporting countries, those tariffs and rules would inevitably be in the mix.
Of course, the other major factor—in addition to whether we remain in the single market—that will affect the resilience of our industry in the future is, as other noble Lords have mentioned, the replacement for the CAP. The Government have promised to guarantee spending at current levels until 2020—but, given ministerial views, it seems unlikely that subsidies will be maintained at the same level indefinitely. For those of us who recognise the environmental issues around the common agricultural policy, of course it is time for a change. But for an industry with notoriously low margins—with Defra reporting that 70% of mixed and grazing livestock farms generated incomes below £25,000 in 2014-15—any rapid reduction in agricultural support would have an adverse impact on many farmers’ ability to survive. Moreover, any removal of subsidies would have to take into account the fact that European farmers would still receive generous state support, thereby giving them a competitive advantage.
The report makes some incredibly useful recommendations in the context of where the CAP moves next. This is still very pertinent as we look to what we in the UK determine for our own agricultural policy post-CAP. It highlights the failings of the current subsidies and points the way forward with, as my noble friend Lady Scott of Needham Market said, the payment for provision of public goods. It is an incredibly important recommendation that was prescient when it was made.
The report coherently argues that agriculture has a critical role in the provision of public goods, such as high food safety, animal welfare standards, environmental stewardship, woodland management and footpath management. It contends that this role should be recognised in policy and the funding framework and that the replacement of the common agricultural policy should be based mainly around the provision of public goods.
I say to the noble Baroness, Lady Byford, that I do not necessarily see such a tension between the provision of food security and public goods. If we are providing food for our nation that is healthy, from animals that are not routinely overdosed with antibiotics, and from land that is not subject to the overuse of nitrates, pesticides and other inputs, that is a provision of a public good: public good being healthy food as well as the other public goods around access to land, land management and woodland creation. So I would not say that there is necessarily a tension there, although I recognise that there are competing demands—to which the noble Lord, Lord Trees, rightly referred.
Baroness Byford
The reason I mentioned that was because, when the CAP was introduced, it was actually to encourage farmers to produce more food. Then we ended up with food mountains, and that is why the CAP’s direction changed. It really goes back to square one, because there are people who believe that we could produce food without having any subsidy and that all the subsidy, or whatever it might be, should just go for environmental development. That is why I said that, in some ways, there is a slight contretemps between the two. I do not see it as a long-term problem, but it is a real issue.
Baroness Parminter
I am very grateful for that response. I absolutely echo the noble Baroness’s understanding of the historical position and where the CAP came from. Equally, I agree that there are some elements in the current debate about the future of the common agricultural policy in the post-Brexit context who think that the money should go just to the environment. My position is that we have to have the provision of healthy food and we have to have environmental protection. It is about producing both healthy food and a healthy environment.
For me, one of the ways that this has to be explained to the public—and, as my noble friend Lord Teverson rightly said, there is not going to be any political will to deliver subsidies because a lot of people see farmers just as an industry in the same way as aerospace or the car industry are industries—is to say that farmers are receiving support for providing a new national health service, which is healthy food, healthy environments and access to the countryside. If we can get to a language that talks about farming support for a national health service, that is a way in which the public might be persuaded and political will might therefore be delivered, in order to guarantee the funding that farmers need to survive. As I mentioned, I absolutely agree that the idea that farming can survive without subsidies, particularly in areas such as the uplands, is cloud-cuckoo-land. As other Members asked, how and when will the Government consult on designing their post-2020 agriculture policy? I know we ask this question at every debate but it is important to keep reiterating it.
Another thing the report is equally clear on—it was just mentioned so eloquently by the noble Lord, Lord Selkirk of Douglas—is the need to integrate the policy with the proposed 25-year environment plan. The report well makes the case that they should dovetail so that the agricultural policy can support the delivery of the 25-year plan and display a much more explicit link between outcomes and the use of public funds. To that end, will the framework for the plan be published this side of Christmas, as has been suggested? Will it contain clear targets that will go on to be enshrined in legislation for improving the quality of our air, water, biodiversity and woodlands so that the public can support the farmers in their role as providers of the healthy food and healthy environment on which we all depend?
Lord Grantchester (Lab)
My Lords, this is an excellent report and it has been an excellent debate, and I thank all contributors. I start by declaring my interest as a dairy farmer in receipt of EU funds, a past chairman of a farmers’ co-operative and a previous owner of a farm shop.
My experience in dairy farming could be characterised as periods of sporadic profitability interspersed with frequent challenges. There is disease, where I could name foot and mouth and the current spread of TB among others. There are political challenges, due to changes in deregulation and CAP support as well as the present Brexit uncertainty. There is severe weather, such as storms and climate change experiences over the past few winters. “Quite normal then”, I expect your Lordships are thinking.
The agricultural market could be characterised as one where the farmer generally has little influence in the supply chain, the market does not really work for anybody, cost and price in commodities are largely decoupled, world trade is distorted by differing support for agriculture by all Governments, and environmental and international developments drive wider and deeper challenges. Some of this analysis was mentioned by the noble Lord, Lord Trees, and I am grateful to him for drawing attention to the various smoothings in the volatility of returns over the years.
While no one is proposing a return to product price support, the result has been that the prices of agricultural produce have been driven down below costs of production, whereby direct income support through the BPS has become a larger and larger percentage of overall returns. This has not been conducive to investment. Where there have been periods of profit, this has often resulted in oversupply, initiating another downturn, sharp price reductions, another loss of good people and skills, poor levels of behaviour in the supply chain and further unfair shifting of business risk. This makes improving the ability of farm businesses to cope with unpredictable price and cost movements a key priority.
I thank the committee for this excellent and timely report, and thank the chairman, the noble Baroness, Lady Scott of Needham Market, for her comprehensive introduction to our debate. One significant conclusion is that adverse effects at farm level are caused more by unanticipated periods of sustained low prices than increases in levels of price volatility.
The UK’s decision to leave the EU will bring additional uncertainty to an already volatile marketplace. Following the vote, the weakening of the pound has supported farm output prices but risks the increase in costs of key inputs such as fertiliser which are themselves globally traded commodities. Inflation generally is likely to increase by 3% next year. Interestingly, the Agriculture and Horticulture Development Board has produced an analysis that examines five possible trading relationships between the EU and the UK.
The noble Baroness, Lady Parminter, spoke of the huge impact of tariffs following Brexit. I am grateful that the Government have announced that current levels of support will continue until 2020, as was also welcomed in the remarks by the noble Lord, Lord Selkirk of Douglas, while ongoing challenges in the level of support were highlighted by the noble Baroness, Lady Parminter. This support will provide a steady state, to a certain degree, allowing serious consideration of the issues raised in this report following the Brexit vote.
The report contributes by providing answers to the main challenge of designing a new architecture needed to replace the CAP and to provide shape to the Government’s 25-year strategy for agriculture. This challenge represents a unique opportunity to rethink the UK’s food system to make it fully responsive to the exacerbating predicaments of inadequate nutrition and unfairness in the supply chain, as well as to the environment and the impacts of food production on climate. This is highlighted in recommendation 14 of the report.
I congratulate the noble Baroness, Lady Byford, on becoming president of LEAF. I very much value the words of the noble Earl, Lord Kinnoull, and those of the noble Lord, Lord Selkirk, on the interlink between the environment and agriculture.
The UK certainly needs a comprehensive and coherent food and farming policy. The backdrop of a more sustainable agriculture will be provided by continuing to move from direct income support towards a better recognition of public goods being adequately valued and rewarded, as proposed by recommendation 15 and debated tonight between the noble Baronesses, Lady Byford and Lady Parminter.
Concurrently with this, improving the competitiveness of agriculture within the marketplace, and capturing these returns, certainly needs to be addressed. This cannot be overstressed. I urge the Minister and the Government to consider this most carefully, and I draw attention to the recent report of the Agricultural Markets Task Force, set up by the Agriculture Commissioner, Phil Hogan, entitled Improving Market Outcomes: Enhancing the Position of Farmers in the Supply Chain. There is a strong need to assess relationships along the whole supply chain. Farmers should not be the main shock absorbers in the supply chain. Unfair trading practices have to be identified and targeted by an effective regulatory framework.
An example of this recently came in a letter, from the food processor Müller Wiseman, introducing a new supply contract with such an element. The European Commission report of 29 January 2016 on unfair business-to-business trading practice in the food supply chain states that,
“one party should not unduly or unfairly shift its own costs or entrepreneurial risks to the other party”.
Although it is not within the Minister’s department’s responsibilities, the extension of the groceries adjudicator role to being able to examine relationships along the whole supply chain could be vital and build on the very successful monitoring of the practices of the retail supermarkets. I look forward to the Government’s response, following the closure of the call for evidence on 10 January.
The supply chain also needs to look at value chain integration, with effective value-sharing mechanisms between each element along the supply chain, to establish a fairer link between producer prices and the added value accruing along the chain. The supply chain needs more diversity, innovation and incentives for improvement. I am glad that the noble Lord, Lord Teverson, in his remarks, drew attention to marketing and adding value.
Co-operation and competition law is another key area for the Government to consider. While the dairy farmers’ processors combined, following the severe crash in farm prices after foot and mouth, to raise the wholesale price to more sustainable levels, the competition authorities found suppliers guilty of combining against the interests of the consumer, who could have had lower prices. The Minister’s department needs to consider carefully the taskforce’s recommendation that,
“the Commission should unambiguously exempt joint selling … from competition law if carried out by a recognised producer organisation or association of producer organisations”.
A large element of all recent reports and recommendations—included here under recommendations 6, 7, 8 and 9—is the promotion of finance instruments to manage the risk and volatility of farmer pricing. The Government’s response is, quite rightly, to proceed most carefully following the anticipated report from EKOS Limited. Availability and expense could prove difficult, coupled to the added risk that is once again pushed on to the farmer. I share here the concerns expressed by the noble Earl, Lord Kinnoull.
Key elements of the report are contained in recommendations 11, 12 and 13, which concern research, training and benchmarking, which were highlighted in the remarks of the noble Baroness, Lady Byford, and the noble Earl, Lord Kinnoull, and data sharing and transfer, referred to by the noble Lords, Lord Trees and Lord Selkirk. The Government’s response is to be welcomed, especially in their commitment to fulfil a broadband universal service obligation by 2020, even though this falls somewhat short of ambition.
A key recommendation of the report is recommendation 3: that the Government,
“should consider how Rural Development funding can be used to accelerate structural change and create opportunities for new entrants into farming”.
The industry and some rural organisations have been slow to recognise this and rise to the challenge of providing advice and schemes to encourage and progress this development, although the noble Baroness, Lady Byford, mentioned some excellent schemes which are just beginning. The noble Lord, Lord Trees, also drew attention to an orderly exit process.
The greater challenges are to create pride and trust in the agricultural industry, to improve its perception and image for the public and to provide attractive career paths and increase the quality of the delivery model. I look forward to the ongoing dialogue over the challenges ahead and welcome the remarks of the noble Baroness, Lady Parminter, that this timetable may be adhered to by the Government. My one question to the Minister is: what are his key elements that are going to deliver change?
Baroness Byford
Before the noble Lord sits down, perhaps I could just correct him. Two noble Lords have mentioned as a fact that I am president of LEAF. I must have expressed myself badly: I have been president of LEAF for the last 10 years and very proud to have been so. I have just handed over to Her Royal Highness the Countess of Wessex, as I am moving on to become patron. I did not want this not to be corrected at some stage but did not like to interrupt either of the noble Lords.
Lord Grantchester
I thank the noble Baroness, Lady Byford, for correcting us. I always had the impression that she was closely involved with LEAF and I apologise for not realising that sooner.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Gardiner of Kimble) (Con)
My Lords, I too congratulate the noble Baroness, Lady Scott, on securing this debate and I acknowledge warmly all that she has achieved during what I might call her term of office. Her committee has produced an excellent report on price volatility and the steps that could be taken to help farmers adapt. The report draws on the experiences of farmers, banks and academia and, as we know, it was published before the result of the referendum. I am conscious that any discussion of the CAP and long-term opportunities for British farming now take place against a very different backdrop. I should at this juncture declare my own farming interests as set out in the register and say that our farming partnership is the recipient of CAP funds.
Farmers in the UK grow the ingredients that underpin our biggest manufacturing sector. Collectively, food and farming contribute £109 billion to the economy, including more than £10 billion from farming directly. British farmers are renowned for the quality of their products, the highest standards of animal welfare, and the traceability and transparency that gives confidence to consumers. They also play a vital role in managing our countryside.
I acknowledge the considerable price volatility that farmers endure. In the last two years the dairy sector has been particularly hard hit, experiencing the challenges of global overproduction, falling demand and the effects of the Russian embargo. These have pushed down milk prices and reduced farm incomes. Some farmers have taken the painful decision to stop producing milk. Others have cut back their production or their plans for new investment. In recent weeks, as part of these volatile market conditions, some processors have substantially raised their farm-gate milk price. Some farmers are receiving more than 30p a litre if they sell direct to supermarkets and specialist cheesemakers. Others are struggling with prices below 20p. The market is complex, with considerable uncertainty for many farmers.
The Government take volatility and low prices extremely seriously. Volatility remains a feature of agricultural markets and I have no doubt there will be further challenges. My noble friend Lady Byford asked about the farm recovery fund. In the last two years the Government have made substantial funding available to help farmers get back on their feet following the severe flooding. Indeed, last year the Government appointed a special envoy at ministerial level to work on the ground with affected farmers in Cumbria and Yorkshire to ensure that support was rapidly delivered and any practical problems could be resolved. I well understand what my noble friend is saying. It is very important that we are as rapid as we can be in helping farmers get back on their feet. The Government will continue to support hard-hit farmers in difficult circumstances, as my noble friend mentioned.
The Government have already taken steps to help producers in one way. We have introduced a new system of extended tax averaging which applies from April 2016. Indeed, in reading the report I note that the committee felt that this was a “positive development”. I am grateful to the noble Lord, Lord Trees, for also highlighting this. This system enables farmers to spread their profits for income tax purposes over five years. These reforms provide extra security to enable farmers to plan and invest for the future. All farmers are eligible and the scheme has been designed to be as simple as possible to operate.
I am grateful to the noble Lord, Lord Grantchester, for his support. My noble friend Lord Selkirk referred to the Chancellor’s confirmation on 13 August this year that to provide more certainty for the agricultural sector all structural and investment fund projects, including agri-environment schemes, signed before the Autumn Statement will be fully funded, even when these projects continue beyond the UK’s departure from the EU. In addition, he guaranteed that the current level of agricultural funding under CAP Pillar 1 will be upheld until 2020, as part of the transition to new domestic arrangements.
The noble Lord, Lord Teverson, asked about a number of points. A further package of EU funding was agreed by Ministers in July. The share of funds allocated to the UK was €30 million. Reflecting the committee’s advice, we are looking to direct some of these funds to support risk management training for livestock farmers to help improve their resilience. We will keep the committee in touch with our plans, including the outcome of the risk management training and the level of engagement by farmers. I think that is a very positive message.
The noble Baroness, Lady Scott, asked about the Government sharing their plans to develop domestic alternatives to the CAP. Early guarantees on funding have been made. Supporting our farmers and protecting the environment will be an essential part of our exit from the EU and I look forward, as do all my ministerial colleagues, to working with industry, rural communities and the wider public to shape our plans for food, farming and the environment outside the EU. We will be launching a major consultation on what that future is to look like. I am not yet in a position to oblige the noble Baroness, Lady Parminter, with the exact timing, but we are well seized of the importance of this work—more about that in a moment.
British producers are dedicated to their farms, their industry and their way of life. I know many of your Lordships from the countryside know how much dedication there is. There is also huge dedication to their livestock. One of the things that we at Defra are remarking to ourselves is the huge importance of animal welfare standards. We think this is an essential part of brand Britain. At home we have 65 million consumers on the farmers’ doorsteps who I believe increasingly value the high-quality food that is here. Indeed, there is a growing global appetite for UK food and drink as populations in major developing countries become more affluent.
As we negotiate the terms of our exit, we need to grasp the opportunities it presents to secure a vibrant future for British farming. I believe a desire for a strong farming sector and a well-managed environment are compatible, and we will work towards that end. Indeed, I reassure my noble friend Lord Selkirk and the noble Baroness, Lady Scott, that the need for a joined-up bold vision is what has inspired the 25-year plans that we will publish for food and farming and the environment. Defra and its organisations such as the Environment Agency, APHA, the RPA and Natural England will in future be more integrated, operating towards clear long-term goals.
As the noble Baroness’s report has shown, science and technology have huge long-term potential to boost efficiency and profitability on farms. Indeed, my noble friend Lady Byford stressed this with impressive figures for both public and private investment. We in this country are fortunate that we have some of the most visionary scientists in the world at research centres such as Rothamsted Research and the John Innes Centre. I say to the noble Earl, Lord Kinnoull, that I was delighted to see the research at John Innes that had been commissioned by Defra on disease-resistant ash trees. I believe this will be part of the research that is going to be so beneficial to us. As Minister with biosecurity responsibilities, I am very conscious of tree diseases and pests, whether insects or mammals. We want a glorious treescape in this country, and the work we are doing on tree resilience and tree health is an indication of the importance we place on this. We also have world-famous colleges and universities like Cirencester and Harper Adams training a new generation of farmers.
As has been mentioned by my noble friend Lady Byford, the Government are putting £160 million into the agritech strategy to make the UK a world leader. Innovation centres for livestock, crop health, precision engineering and data will help to transfer the latest knowledge and techniques from laboratory to farm. We are developing a food innovation network to ensure that ambitious entrepreneurs are linked up to the latest scientific knowledge. We want our farmers to have access to the best technology available so that they can remain competitive and contribute to the growth of the rural economy. In addition, we are improving our resilience to animal disease by investing in state-of-the-art laboratories and the upgrade of our biocontainment facilities at Weybridge—I am going to visit Weybridge on Friday—which will strengthen our ability to fight diseases like swine fever and avian flu.
In a world of volatility but also great opportunities, the people who will reap the fullest advantage will be those with skills, innovation, investment and indeed ambition. The best managers in farming are investing in developing expertise, adopting the best available techniques and harnessing the right technology to boost productivity and profits. We would like to see this practice spread right across the industry, which I hope will give reassurance to my noble friend Lord Selkirk.
The Government are seeking to raise skills levels across the workforce by trebling the number of apprentices in food and farming. We need to examine new models of farming such as share farming or franchises, which will allow new people and ideas to come into the industry. I am so pleased that my noble friend Lady Byford mentioned my noble friend Lord Plumb. My goodness me, what a friend he has been to agriculture and the countryside throughout his long life. The report raised some valuable questions about tenancies. We want a viable future for all farm businesses—including owner occupiers and tenants—as part of a strong, dynamic and flexible British farming industry.
The report makes an excellent case for exploring new financial instruments—something that the noble Lord, Lord Teverson, also highlighted in his speech, and I welcome him to his new post. These could help farmers access new forms of funding to modernise and invest. We need more capital going into the right investments to improve productivity and resilience in farming and throughout the food chain. As has been mentioned, the Government have appointed EKOS Ltd to identify the potential for loans, guarantees and equities in UK farming. We expect to receive its report within the next few weeks.
The noble Earl, Lord Kinnoull, and the noble Lord, Lord Trees, referred to wider international models such as the Australian farm management deposit scheme, which was highlighted in the committee’s report. I also note the Canadian scheme. The noble Earl also highlighted Flood Re as a template. It was undoubtedly a successful outcome of government working with industry, and we are keen to look at whether insurance schemes could be used to benefit the farming industry.
As the committee recommends, the Government have worked closely with the AHDB and the financial sector to explore the potential for futures markets in UK farming and other tools for managing risk. As was mentioned by the noble Baroness, Lady Scott, and the noble Lord, Lord Grantchester, on 14 November the EU markets task force published a report aimed at helping farmers absorb the shock of price volatility or prolonged periods of low prices. In order to stimulate futures markets, it recommends more awareness-raising and training in the farming community and farmers’ organisations and more reliable market data in which the markets will have confidence and faith. We will study the report with interest, assessing with the industry which elements would be most helpful for British farmers. Again, spreading knowledge of this will be immensely important.
My noble friend Lord Selkirk and the noble Lord, Lord Grantchester, referred to broadband. As I am a member of the technical skills task force, I am very conscious of the importance of this to rural areas. Public investment in improving broadband is nearly £1.7 billion. My department is working closely with DCMS and its delivery body to press for improvements in coverage, and I am personally well aware of enhancing in rural areas both mobile connectivity and broadband. We also need to be improving planning and regulatory conditions for rural businesses. This would help to create a highly skilled rural workforce, creating strong conditions for rural business growth and making it easier to live and work in rural areas, particularly by overcoming housing constraints and improving access to affordable childcare for working parents.
Farmers should receive a fair price for their produce, and the Groceries Code Adjudicator has an important role to play in changing behaviours in the supply chain—the noble Lord, Lord Grantchester, referred to this. The Government have launched a call for evidence to explore the case for extending the adjudicator’s remit. This recognises the concerns raised by other suppliers in the grocery sector—particularly primary producers and farmers—who are not covered by the code. The Government want to do all we can to help these businesses, and we look forward to hearing their views and others from right across the agrifood supply chain.
The noble Baroness, Lady Parminter, and the noble Lord, Lord Teverson, in speaking about the post-Brexit era, raised the importance—the supreme importance—of international trade to our country. Indeed, it is at the heart of our approach. Growth in world trade and prosperity will bring substantial opportunities to sell our high-value, high-quality food and drink as long as we are at our most resilient and competitive. That is why, in the coming weeks and months, Ministers will be crossing the globe banging the drum for great British food and drink. Indeed, my honourable friend the Secretary of State returned from China only last weekend, where she emphasised the importance of our trading relationship and promoting the quality and safety of British food. She also met Chinese food businesses to promote our food industry and support inward investment.
Last month, in Paris, the Secretary of State launched an ambitious new action plan to increase exports and bring a £2.9 billion boost to the UK economy. The new international action plan for food and drink identifies nine markets across 18 countries with the best potential for growth, including India, the USA and Canada, China and the Gulf. Across these countries, work is under way to secure new access—notably, market access for beef and poultry to Japan, lamb and beef to the USA, and pork to China. Together, over the next five years the Government and industry will help exporters sell more overseas and provide business support, mentoring and training to give new companies the confidence and skills to start exporting.
I am conscious of what we owe the noble Baroness and her committee members for their invaluable report. It was very encouraging to hear that my ministerial colleagues have already been picking up and running with it—George Eustice has responsibility for food and farming in particular. I think this shows the importance of the work of this House and your Lordships in this regard. The issues that have been raised are central to securing a resilient and competitive UK farming industry for the longer term. Farming is the backbone—that was my word, although I do not mind bedrock—of rural Britain, producing food and the stewardship of the countryside, and importantly the environment. This Government are absolutely clear about the importance of vibrant and sustainable rural communities that are sustained on a strong economy, making them great places to live, work and visit. Our task is to put our shoulder to the wheel to ensure that we leave the European Union in the best way we can for our country. We must ensure that Britain’s agricultural and horticultural sectors have a positive and vibrant future.
Baroness Scott of Needham Market
My Lords, I thank everyone who has participated in this debate. I had not thought about it until my noble friend Lord Teverson mentioned it, but this might be the last proactive report of the sub-committee. It has been a tribute to the huge amount of farming experience that exists both in this House and in the committee. Nowhere could that be better seen than in the noble Lord—who I will describe as my noble friend, because I think he is—Lord Curry of Kirkharle, without whom I think our committee report would have been much poorer. Unfortunately, he was unavoidably detained on his way to the debate this evening and was unable to take part. I think we are the poorer for that.
I was very heartened to hear about the Government’s commitment to the agritech strategy because this general theme of the importance of research, data-sharing, knowledge transfer and innovation was recurring through every speech. When members of the sub-committee went on a site visit to see a young farmer brimming full of ideas and innovation, we asked him where he was getting them and learning and he said “YouTube”. His ideas are coming from around the world. It is a very good example of the importance of good rural broadband and what you can do with it, as opposed to broadband which takes eight hours to download a two-minute video. Good, superfast broadband is essential.
With regard to financial measures, I hear and have a lot of sympathy with the point made by the noble Earl, Lord Kinnoull—that most farmers are small businesses and complex financial instruments are simply not going to be of help to them. On the other hand, there may be others that do, so it is about the appropriate level of tools. It is certainly almost an extension of the tax-averaging into something like a New Zealand, Australian or Canadian deposit system, which seemed to have support from around the House on the Joseph’s lean-and-fat-years principle.
The Minister has heard the very strong feelings from across the House about the need to integrate the 25-year environment and farming plans. It does seem odd that the same department cannot integrate the two plans, because to us they are inextricably linked. That is particularly important as we move into the post-Brexit environment. If farmers are to receive considerable financial support from the public, the Government will have to make the case and explain why the money is going to them rather than the health service, education or anything else. That can only be done by framing the debate within this whole question of public goods. The Minister will have heard the very strong views about that. I again thank the Minister and everyone else for participating in this debate.